Even in the midst of harsh economic times, the University of Wisconsin Foundation’s endowment grew 20.7 percent during the year, a certain percentage of which will be given to departments across campus.

An annual survey conducted by the National Association of College and University Business Officers found the foundation’s endowment grew between the fiscal year 2010 and 2011. The jump slightly surpassed the national average of 19.2 percent growth and increased UW’s endowment pool from $1.55 billion to $1.87 billion.

UW Foundation President Mike Knetter said the growth is “better than average” in terms of annual market returns and cited various ways this increase can positively impact the UW campus. Each year, the university is allowed 4.5 percent of the market value to allocate as it sees fit, he said.

The figures place UW’s endowment at No. 34 in the nation, with Harvard ranking first with $31.73 billion and Yale University in second at $19.37 billion.

Knetter said the reported amount is comprised of several smaller endowments that have been initiated for specific departments or in honor of faculty members, which are further supported by donor gifts each year.

In this way, money is not spent haphazardly on whatever initiative university officials deem most important, but rather is designated to the discretion of departments to decide where the funds would be most beneficial, he said.

Knetter added departmental discretion includes areas such as recruiting graduate students and research assistants, increasing a highly valued professor’s salary or ordering new shipments of classroom and laboratory resources.

Sara Goldrick-Rab, professor of educational policy studies and sociology, said despite its sizable growth, UW’s endowment is rather small in comparison to that of peer universities, including the University of Michigan and Northwestern University.

According to the survey, Michigan’s and Northwestern’s endowments weigh in at $7.83 billion and $7.18 billion, respectively. UW also falls behind the University of Minnesota, which has an endowment of $2.5 billion, and Ohio State University, which came in at $2.12 billion for the fiscal year.

Knetter said he is not concerned by UW’s comparatively smaller endowment but that his focus is to make sure the university has the resources to do all it aspires to do.

Goldrick-Rab said the possibility of an increase in financial aid for students in the midst of state budget cuts would largely depend upon how much of the endowment is designated to the Office of Student Financial Aid, since many departments will likely spend their share on retaining staff and merely staying afloat.

“Frankly, what the endowment is going to do is fill the massive, unexpected hole left in our budget by the state’s withdrawal of its support,” Goldrick-Rab said.

She cited hefty state budget cuts as a primary determining factor in how departments will ration their share of usable funds this year.

Students should be aware, she said, that during a normal time, this boost would be a wonderful thing and that UW could do something quite valuable with the increase. Instead, because the state has pulled out so much funding, priorities must be rearranged.

“What Chancellor Ward calls the ‘margin of excellence’ – what this endowment is supposed to be for – we are not going to be able to use it for that margin; we’re just going to use it for survival,” Goldrick-Rab said.