Kansas University is close, but it has not yet joined the group of 56 higher education institutions with billion-dollar endowments.

“We are very proud of where we are,” said Rosita Elizalde-McCoy, KU Endowment Association’s senior vice president for communications and marketing.

The Endowment Association had about $954 million in funds for fiscal 2005. Its total assets, including real estate, are $1.27 billion.

KU Endowment ranked 57th among 746 institutions for the size of its endowment in a new survey by the National Association of College and University Business Officers (NACUBO).

“Our mission is to build a greater university than the state alone can build,” Elizalde-McCoy said. “We’re never done with our goal.”

KU ranked 20th among public institutions for the size of its endowment.

The endowment supports a wide variety of KU programs, including research, faculty, scholarships and construction projects.

Strained state budgets make university endowments even more important than they once were.

There’s a correlation between academic quality and spending, said Louis Morrell, vice president for investments and treasurer at Wake Forest University, who will be speaking on the topic for NACUBO.

Universities are competing for students, who look not only at academics, but also at quality of life factors such as nice dorms, athletic facilities and recreational facilities, Morrell said.

“The whole cost of higher education is on the way up,” he said. “The quality is going up and the cost is going up.”

The average one-year return on investment for the more than 700 schools surveyed was 9.3 percent. KU beat the average with 13.7 percent, Elizalde-McCoy said. But the highest returns for universities were more than 20 percent.

“Traditionally the bigger endowments have been more aggressive and more creative in investing their funds and have traditionally done better,” said Bill Spitz, vice chancellor for investments and treasurer at Vanderbilt University, who also will speak about endowments at a NACUBO forum.

More money means the endowment fund managers can look to a variety of investments, including venture enterprises, real estate, timber, energy and hedge funds, Spitz said; the highly endowed schools invest less in traditional stocks and bonds.

Morrell said the $1 billion mark was an important one.

“When you break the billion-dollar barrier, you move to a different class and you start to look at different schools,” he said.

According to the survey, schools with endowments bigger than KU’s included the University of Nebraska, the University of Illinois and the University of Wisconsin.

Harvard, Yale, and Stanford universities topped the list. Harvard’s endowed funds in 2005 totaled more than $25 billion.