Wheaton magazine

Volume 23, Issue 1
Wheaton magazine // Winter 2020
Photo by Greg Halvorsen Schreck

Understanding and Appreciating Wheaton College's Endowment

It really is no surprise that Ken Larson '84 is a Minnesotan, though "Minnesota nice" doesn't quite capture the depth of his personality. Yes, he is courteous and mild-mannered and polite, and carries a warm, inviting expression. But he is also keen and analytical. As Wheaton College’s longtime investment manager—steadily overseeing the College’s investments for decades with wisdom, humility, and attention to detail—Ken is just the right person to clear the fog on a topic that remains a mystery to many: the endowment.

“The endowment funds nearly 14 percent of the College’s annual budget," he says, "so it plays a very important role in keeping Wheaton affordable and maintaining academic excellence." 

The $503 million endowment exists to generate a dependable stream of income to fund the costs of specific Wheaton College programs and the overall College budget. The College can count on this income every year into perpetuity. This stream of income comes from a permanent investment of donor gifts and College equity in stocks, bonds, hedge funds, and private equity. It supports College programs including scholarships, faculty positions, facilities, and more on an annual basis. The endowment also helps to fund general operations of the College. Notably, returns from the endowment decrease the amount that students need to pay in tuition–by about 15 percent during this past fiscal year.



"Ken manages one of the largest Christian college endowment funds in the country but never lets it go to his head. He listens with wisdom and humility to the many strong advisors and fund managers surrounding him,” says Larson’s Wheaton College roommate, Kevin Engel ’84, director of development, who fondly remembers sharing long car rides along I-90/94 home to Minnesota for breaks.

Larson has played a central role in stewardship of the endowment for 34 years. As a business/economics major at Wheaton, he had entry-level exposure to finance and investments that made him a leading candidate for a position in Wheaton’s Investment Department in 1985. In those early years, he earned an M.B.A. in finance from the University of Chicago. “At the time,” Larson says, “I did not imagine that I’d work at Wheaton as long as I have, but God has created opportunities for me along the way that have presented new challenges and ways for me to grow professionally at a place that I love.” Larson’s commitment to the College and its mission runs deep. He met his wife, Laurel Praschan Larson ’86, at Wheaton, and three of their four children are either Wheaton graduates or current students.

“Wheaton has had a transformational impact on me personally and on my family, so it is a privilege to serve here,” Larson says.

According to Larson, though, oversight of the endowment is exercised primarily by the Investment Committee of the Board of Trustees, which includes Phil Hubbard ’72, Kurt Keilhacker ’85, Shundrawn Thomas, and Dale Wong ’85. These four trustees—who have extensive investment knowledge and experience—work closely with Larson and Vice President for Finance and Operations Chad Rynbrandt ’94 on all matters relating to the endowment. Rynbrandt serves as the senior College administrator with responsibility over investments. Larson reports to Rynbrandt and has a six-member team (including alumni Tom McCully '77 and Kent Olsen '89) that works with him to manage and account for the endowment and planned gifts.

"Our endowment team is a rare jewel," Rynbrandt asked. "There are a few attributes that I think contribute to its rarity and value. First, we have world-class investment management expertise. You simply need to look up the career history of those involved to see how privileged we are. Second, our team has continuity. Ken’s steady leadership has been supported by trustees who have worked with the endowment for many years running. That provides a long-term perspective that helps us make good investment choices and weather challenging periods in the financial markets. Third, we have a unique capability in helping people think about optimal ways to give with the teamwork between our Advancement and Gift Planning teams.”

One compelling example of the Investment Committee’s leadership, courage, and agility occurred in 2009, during the Great Recession.

“Our committee of four can be nimble,” says Hubbard, who serves as chair of the Investment Committee. “We meet four times per year, but we can meet quickly if something happens in the markets. March 2009 is a perfect example. I’ll never forget the conference call when the markets tanked. I said, ‘Now’s the time. Let’s put more money into equities.’ Some people said, ‘Are you crazy?’ But when you feel the worst, that is when you want to invest. Not when you feel the best. We were able to put the higher end of our allocation into equities, and as a result, we rebounded well.”

Over the last 10 years, Wheaton’s endowment has taken off. It is now worth over $503 million, which is more than double the $250 million it was worth back in 2009.

But Hubbard doesn’t intend to stop there. He hopes to double that number—to $1 billion by 2028.

“It might be a little bit of a pipe dream, but why not dream big?”

Larson echoes this sentiment.

“The goal is not to have $1 billion just to have $1 billion, but to have a growing endowment so that we can continue to fund the expanding impact of Wheaton,” Larson says. “The cost of education is expensive, and the more we can fund scholarships with the endowment, the more opportunity we will have to help students afford Wheaton.”



Based on the most recent survey of over 800 endowments by the National Association for College and University Business Officers (NACUBO) for periods ending June 30, 2018, Wheaton’s endowment performance ranked in the top five percent for three years.

Reflecting on the endowment’s evolution, Larson notes that the “extraordinary generosity” of Wheaton’s donors is a major source of the endowment’s stability and success: Over $161 million has come in from donors during the past 25 years, or 42 percent of the endowment’s growth during this time. Additionally, investment returns of $516 million funded $329 million of spending to fund scholarships and College programs. Investment returns, net of spending, account for $187 million, or 49 percent of the endowment’s growth, with transfers from other College funds providing the balance of $35 million, or 9 percent, of the endowment’s growth. Total growth of the endowment, net of spending, over the past 25 years, is $384 million.

In addition to generous donor gifts, Wheaton’s endowment has grown through earnings from a diversified portfolio of investments. The College employs 14 investment management firms that are thoroughly vetted by both Larson and the Investment Committee to manage segments of the endowment portfolio, which comprises U.S. and international stocks, bonds, hedge funds, and private equities.

“We know who the best traders are and the best money managers are in those particular fields and those are the ones we recommend to Wheaton,” Hubbard says. “We look at two things: the head and the heart. What makes this money manager the best in the world at what they do? We don’t settle. We also look at what I call the 3P’s: pedigree, performance, and professionalism.”

Larson is clear that the College integrates its faith and ethical beliefs into investment management.

“Security selections are limited to those firms whose principal or subsidiary business is not in conflict with both the general philosophy and specific policies of the College,” Larson says.

The College’s investment policy includes the following guidelines: “Examples of holdings which are not appropriate are securities issued by companies that engage in gaming; that have a significant involvement in the production or distribution of alcoholic beverages, tobacco products, agents that cause abortions, or questionable entertainment products; or that knowingly engage in or condone practices—such as racially discriminatory employment policies—inimical to the College’s moral and ethical standards.”



Four and a half percent of the endowment is paid out annually to support College scholarships and programs.

“Scholarships are the top outflow of spending,” Larson notes. “Our donors’ generosity in giving toward scholarships is remarkable. It’s important to know that Wheaton donors have been very generous in funding our endowment in many areas, but in particular, in scholarships and faculty chairs.”

“Endowed chair funding pays for the salary and scholarly activities for a faculty member who has been recognized as an expert or major contributor in their field,” Provost Margaret DuPlissis Diddams ’83 says. “As we look into the future, having endowed chairs allows us to attract top-notch faculty in a way that’s not burdensome to tuition. These gifts allow us to offer both a competitive salary and healthy stipends for faculty members to teach and do research that will benefit the church and society worldwide.”

Looking to the future, Larson's vision is clear.

“Specifically, I hope our endowed scholarships grow to enable us to provide more financial assistance to undergraduate and graduate students to keep Wheaton affordable and accessible,” Larson says. “I also hope endowed faculty chairs increase to further elevate the already high quality of our faculty and provide resources to benefit the teaching and scholarship of all faculty members.”