Financials

The Tower Foundation directly manages all financial aspects of funds donated to San Jose State University. The Tower Foundation is exempt from taxation under Section 501(c)(3) of the Internal Revenue Code. It is certified as an auxiliary in good standing with the California State University System. An international accounting firm audits the foundation’s financial records annually.

Financial Statements

For the fiscal year ending June 30, 2013, the Tower Foundation was audited by McGladrey LLP, Certified Public Accountants. The audit was conducted in accordance with generally accepted auditing standards and, in their opinion, the financial statements presented fairly, in all material respects, the financial position of Tower Foundation as of June 30, 2013 in conformity with accounting principles generally accepted in the United States of America. Their independent auditor's report expressed an unqualified opinion.

We are pleased to make available to you our audited financial statements, IRS Forms 990, and other regulatory filings of interest.

 

Financial Statements

Statement of Information

Tax Returns (IRS FORMS 990)

Tax Returns (FTB Form 199)

CA Annual Registration Renewal Fee Report (RRF-1)

Donor Honor Roll and Tower Foundation Annual Report

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Investment Returns

A large endowment strengthens a university's academic reputation. An endowment grows when alumni and friends want to create a lasting legacy for future generations. The value of a university endowment makes a statement about the value of every degree granted.

The SJSU endowment portfolio is comprised of over 500 individual funds benefiting all areas of the campus -- from the colleges to the Dr. Martin Luther King, Jr. Library, to intercollegiate athletics and other university-wide programs. Most endowments are restricted to specific uses such as establishment of a scholarship, support for a center, or creation of an endowed chair.

At more than $116 million, the SJSU endowment continues to grow. In 2013-14, more than $19 million in new principal was added to the endowment.

SJSU's endowment is ranked 427 out of approximately 849 universities reporting endowments. This is up from our ranking of 462 in 2012 and 483 in 2011. The 2013 annual endowment standings published by the National Association of College and Business Officers show that 83 universities have endowments that top $1 billion.

The Tower Foundation works with investment firm Beacon Pointe Advisors to allocate the endowment assets to a diversified portfolio of domestic and international equities, fixed income, real estate, cash equivalents and other investments as required by our Investment Policy, all of which reflect varying rates of return. The long-term financial objective of the portfolio is to produce a relatively predictable and stable spending stream each year and to grow both the spending stream and the corpus over time, at least keeping pace with the general rate of inflation.

San Jose State's endowment portfolio’s performance has improved in the past several years, helping to gain back some of the losses that resulted from the global financial downturn of 2008-09. Our one-year composite return as of December 31, 2013 was up 13.6 percent with the three-year composite return at 7.7 percent and the five-year composite at 12.1 percent.

As California's public universities face continued budget challenges, SJSU's endowment becomes even more important to our success. The 2014 endowment distribution of $3,914,952 is helping to fund programs that are vital to San Jose State. Income from the endowment provides student scholarships, such as the Simpkins Family Donor Advised Endowment Fund; vibrant programs, such as the ISEF 2010 Center for STEM Education, the Natalie and James Thompson Gallery and the Library Leadership Endowments; and sustainable fellowship programs, such as the Steinbeck Fellows endowment.

The 2014 annual distribution was 4.2 percent of the average market value of the endowment for the previous three years ending December 31. According to a survey conducted by the Council for Advancement and Support of Education, university distributions typically range from 3 to 5 percent of the market value of the endowment. SJSU's 4.2 percent distribution was approved by the Tower Foundation Board of Directors and was consistent with CSU distribution recommendations. A three-year average is used to minimize the impact of market fluctuations on the endowment funds and is consistent with practices adopted at other leading universities. A 2 percent management fee is charged to the endowment, which covers administrative costs and provides a sizeable investment SJSU's fundraising efforts.

 

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