FINANCIAL HIGHLIGHTS

2016 – 2017

2016–2017 FINANCIAL HIGHLIGHTS

Total Voluntary Support*FOR THE FISCAL YEARS ENDED JUNE 30 (IN MILLIONS OF DOLLARS)

2016-2017 FINANCIAL HIGHLIGHTS

2013** 2014** 2015** 2016 2017

Private Giving Through IUF $ 153.5 $ 158.1 $ 143.0 $ 168.1 $ 230.5

Private Grants to IU $ 133.9 $ 157.1 $ 190.2 $ 192.8 $ 167.8

TOTAL $ 287.4 $ 315.2 $ 333.2 $ 360.9 $ 398.3

NUMBER OF DONORS 120,703 119,892 107,979 113,234 113,648

*Total Voluntary Support (TVS) includes gifts made through IUF and private sector grants to

IU. The amount reported adheres to Council for Advancement and Support for Education

(CASE) TVS of Education guidelines, which can be explained as the sum of outright cash

and property received as private, charitable support during the fiscal year.

**Fiscal years 2013-2015 have been revised to remove funds raised by Riley Children’s

Foundation.

Total Voluntary SupportFOR THE FISCAL YEARS ENDED JUNE 30 (IN MILLIONS OF DOLLARS)

2016–2017 FINANCIAL HIGHLIGHTS

$287.4

$315.2 $333.2

$360.9

$398.3

$0.0

$80.0

$160.0

$240.0

$320.0

$400.0

2013 2014 2015 2016 2017

Giving by Alumni, Friends, Corporations, Foundations, and Other Organizations

FOR THE FISCAL YEAR ENDED JUNE 30, 2017 (IN MILLIONS OF DOLLARS)

2016-2017 FINANCIAL HIGHLIGHTS

Donors Amount

% of Total

Giving

INDIVIDUAL GIVING*

Alumni 57,668 $ 89.7 38.9%

Friends 51,560 $ 31.0 13.4%

ORGANIZATIONAL GIVING*

Corporations 1,714 $ 28.8 12.5%

Foundations 339 $ 39.6 17.2%

Other Organizations 2,367 $ 41.4 18.0%

TOTAL GIVING 113,648 $ 230.5 100.0%

*Excludes private grants

Giving by Alumni, Friends, Corporations, Foundations, and Other Organizations

FOR THE FISCAL YEAR ENDED JUNE 30, 2017 (IN MILLIONS OF DOLLARS)

2016-2017 FINANCIAL HIGHLIGHTS

Alumni $89.7 M38.9%

Friends $31.0 M13.4%

Corporations $28.8 M12.5%

Foundations $39.6 M17.2%

Other Organizations $41.4 M 18.0%

Total

$230.5 Million

Private Giving Through Indiana University Foundation

Future and Planned CommitmentsFOR THE FISCAL YEAR ENDED JUNE 30, 2017 (IN MILLIONS OF DOLLARS)

2016-2017 FINANCIAL HIGHLIGHTS

Deferred Gifts (Bequests, Charitable Trusts, & Life

Insurance)$503.7 M

Cash & Securities

$80.2 M

Pledges$165.6 M

Retained Life Estates$2.3 M

Total Future and PlannedCommitments$751.8 Million

Annual Private Giving ImpactFOR THE FISCAL YEAR ENDED JUNE 30, 2017

2016-2017 FINANCIAL HIGHLIGHTS

Scholarships & Financial Aid

28.5%

Academic & Student Program Support

25.0%

Faculty Support & Research

25.0%

Facilities21.5%

Investment ManagementFOR THE FISCAL YEAR ENDED JUNE 30, 2017

2016-2017 FINANCIAL HIGHLIGHTS

Working with top-tier investment managers across a variety of asset classes allows Indiana

University Foundation to appropriately diversify our investment portfolio to achieve target

returns with less volatility than is typical of traditional investments. Reducing volatility is

critical to providing dependable support for those who rely on annual endowment income,

such as students receiving renewable scholarships or faculty receiving annual salary

support.

To judge the success of our investment decisions, IUF compares pooled fund returns to a

target weighted index. This customized index contains weightings from various indices that

mirror the weighting of the assets in the IUF portfolio.

Investment performance has historically exceeded our target, net of fees to managers. In FY

2017, IUF’s pooled fund investments outperformed our target weighted index by .3% (30

basis points). For the five-year and ten-year periods ending FY 2017, the portfolio did so by

an average of .3% (30 basis points) and .2% (20 basis points) per year, respectively.

Investment Performance FOR THE FISCAL YEAR ENDED JUNE 30, 2017

2016-2017 FINANCIAL HIGHLIGHTS

The above returns reflect the compiled performance of IUF’s pooled funds. The actual

performance of individual accounts will vary due to IUF fees and, in a limited number of

instances, the impact of certain individual assets held in a particular account. Past

performance is not a guarantee of future performance.

Annual Returns

1 Year 3 Years 5 Years 10 Years

IUF Pooled Funds 13.7% 3.7% 8.2% 4.0%

Total Target Weighted Index 13.4% 4.5% 7.9% 3.8%

Market Value of InvestmentsFOR THE FISCAL YEARS ENDED JUNE 30 (IN MILLIONS OF DOLLARS)

2016-2017 FINANCIAL HIGHLIGHTS

$1,962.4

$2,250.3 $2,277.9 $2,165.2

$2,446.3

$0.0

$500.0

$1,000.0

$1,500.0

$2,000.0

$2,500.0

2013 2014 2015 2016 2017

Investment AllocationFOR THE FISCAL YEAR ENDED JUNE 30, 2017

2016-2017 FINANCIAL HIGHLIGHTS

Cash & Cash Equivalents

0.5%

Domestic Equity23.0%

International Equity22.9%

Fixed Income6.9%

Alternative Investments

33.1%

Real Assets12.2%

Other1.5%

See notes on next slide.

Investment Asset AllocationFOR THE FISCAL YEAR ENDED JUNE 30, 2017

2016-2017 FINANCIAL HIGHLIGHTS

The main objective of IUF’s investment approach is to grow the portfolio over the long-

term, while maintaining the purchasing power of donated dollars. As stewards of assets

that benefit Indiana University, this goal is instrumental in driving IUF’s asset allocation

decisions. Maintaining significant equity bias in the portfolio allows IUF to benefit from

global growth. Diversification continues to be a valuable risk-reduction/return-enhancing

tool and leads to investments across various asset types, styles, managers, and

geographies.

The equity, fixed-income, and alternative investment categories are owned within the

endowment portfolio, whereas cash is typically held separately.

Investment and Income Distribution TrendsFOR THE FISCAL YEARS ENDED JUNE 30 (IN MILLIONS OF DOLLARS)

2016-2017 FINANCIAL HIGHLIGHTS

See notes on next slide.

$23.3

$57.1 $60.2 $73.0

$91.6

$0.0

$50.0

$100.0

1997 2002 2007 2012 2017

Distributions

$605.9

$955.9

$1,556.9 $1,576.6

$2,229.4

$76.5

$44.7

$171.4 $186.5

$216.9

$682.4

$1,000.6

$1,728.3 $1,763.1

$2,446.3

$0.0

$500.0

$1,000.0

$1,500.0

$2,000.0

$2,500.0

1997 2002 2007 2012 2017

Endowed Non-Endowed Total Investments

Investments

The IUF Pooled Fund Spending Policy controls the rate at which income is paid to

endowment accounts.The policy seeks to balance Indiana University’s needs today

with those of tomorrow. Specifically, the policy aims to:

Maintain the purchasing power of invested assets

The spending policy is intended to ensure an investment grows at an adequate

rate to allow the same goods and services paid for with investment income

today to be purchased with income from the same investment in the future.

Provide income to support today’s IU in a way that is sustainable, reasonable,

and predictable

The spending policy is intended to provide some level of buffering from short-

term market volatility, while ensuring income distributions move in correlation

with longer-term market performance.

The spending policy rate effective for fiscal 2016-2017 was 4.54%.

2016-2017 FINANCIAL HIGHLIGHTS

Income DistributionsFOR THE FISCAL YEAR ENDED JUNE 30, 2017