The Carnegie Institution for Science completed fiscal year 2020 in sound financial condition after generating a net return of 2.1% on the diversified investments within its endowment; maintaining a disciplined spending policy that balances today’s needs with the long-term requirements of the institution and the interests of future scientists; and the continued support of organizations and individuals who recognize the value of basic science.

The primary source of support for the institution’s activities continues to be its endowment. This reliance on institutional funding provides an important degree of independence in the research activities of the institution’s scientists.

As of June 30, 2020, the endowment was valued at $927 million. Over the period 1998-2020, average annual distributions from the endowment to the budget were 5.0%. Carnegie closely controls expenses to ensure the continuation of a healthy scientific enterprise.

For several years, under the direction of the Investment Committee of the Board, Carnegie’s endowment has been allocated among a broad spectrum of asset classes including: global equities, absolute return investments, real estate partnerships, private equity, venture capital, natural resources partnerships, and government bonds. The goal of this diversified approach is to generate attractive overall performance and reduce the volatility that would exist in a less diversified portfolio. In 2016 Carnegie hired its first Chief Investment Officer to more proactively steward the endowment’s assets.

The Chief Investment Officer and Investment Committee regularly examine the asset allocation of the endowment and readjust the allocation, as appropriate. The institution relies upon external managers and partnerships to conduct the investment activities, and it employs a commercial bank to maintain custody. The following chart shows the allocation of the institution’s endowment among asset classes as of June 30, 2020.

Asset Class Target Actual
Common Stock 41.0% 39.1%
Alternative Assets 47.0% 53.1%
Fixed Income and Cash 12.0% 7.8%

Carnegie’s investment goals are to provide high levels of current support to the institution and to maintain the long-term spending power of its endowment. The success of Carnegie’s investment strategy is illustrated in the following figure that compares, for a hypothetical investment of $100 million, Carnegie’s investment returns with the average returns for all educational institutions for the last fifteen years.


Carnegie has pursued a long-term policy of controlling its spending rate by using a hybrid spending rate, which in the long term contributes 5% of the endowment for annual use. Carnegie employs what is known as a 70/30 hybrid spending rule. That is, the amount available from the endowment in any year is made up of 70% of the previous year’s budget, adjusted for inflation, and 30% of the most recently completed year-end endowment value, multiplied by the spending rate of 5% and adjusted for inflation and debt. This method reduces volatility from year-to-year. The following figure depicts actual spending as a percentage of ending market value for the last 20 years.


In fiscal year 2020, Carnegie benefitted from continuing federal support. Carnegie received $16.5 million in new/additional federal grants in 2020. This is a testament to the high quality of Carnegie scientists and their ability to compete successfully for federal funds.

Within Carnegie’s endowment, there are several “funds” that provide support either in a general way or targeted to a specific purpose. The largest of these is the Andrew Carnegie Fund, begun with the original gift of $10 million. Mr. Carnegie later made additional gifts totaling another $12 million during his lifetime. This tradition of generous support for Carnegie’s scientific mission has continued throughout our history and a list of donors in fiscal year 2020 appears in an earlier section of this Year Book. In addition, Carnegie receives important private grants for specific research purposes.

Carnegie Institution of Washington
Statement of Financial Position
July 30, 2020 and 2019
(in thousands)

Assets 2020 2019
Cash and Cash Equivalents 30,125 33,050
Contributions Receivable 3,728 3,750
Accounts Receivable and other assets (net) 9,265 7,743
Bond Proceeds 120,582 21,661
Investments 917,741 953,113
Property and equipment (net) 118,276 126,641
Long term deferred asset 61,596 60,460
Total assets 1,261,313 1,206,418
Accounts payable and accrued expenses 11,403 12,069
Deferred revenue 28,587 26,828
Bonds payable 214,348 115,032
Accrued Postretirement benefits 32,741 27,721
Total liabilities 287,079 181,650
Net Assets    
Without donor restriction 295,115 311,622
With donor restriction 679,119 713,146
Total net assets   1,024,768
Total liabilities and net assets 1,261,313 1,206,418

Carnegie Institution of Washington
Statement of Activities
July 30, 2020 and 2019
(in thousands)

Revenue and Support 2020 2019
Grants and contracts 17,668 20,526
Contributions, gifts 4,493 7,987
Other Income 2,358 7,559
Net external Revenue 24,519 36,072
Investment income and unrealized gains 17,816 31,221
Total Revenue 42,335 67,293
Program and Supporting Services:    
Terrestrial Magnetism 10,274 10,039
Observatories 24,078 23,055
Geophysical Laboratory 11,809 13,294
Embryology 13,471 14,697
Plant Biology 9,173 9,360
Global Ecology 4,792 7,123
Other Programs 278 1,013
Administration and general expenses 14,416 14,968
Total Expenses 88,291 93,549
Change in net assets before pension related changes (45,956) (25,378)
Pension related changes (3,649) (2,611)
Other components of postretirement benefit expense (929) (878)
Grant modifications   (5,188)
Net Assets at the beginning of the period 1,024,768 1,058,823 
Net assets at the end of the period 974,234 1,024,768


READER’S NOTE:  In this section, we present summary financial information. Each year the Carnegie Institution, through the Audit Committee of its Board of Trustees, engages an independent auditor to express an opinion about the financial statements and the financial position of the institution. The complete audited financial statements are made available on the institution’s website.