A resurgent economy led to a 2.1 percent increase in GW’s endowment fund last year, University officials said Friday.

GW’s endowment was valued at $634 million in fiscal year 2003, up from $621 million in 2002, according to a report released last week by the National Association of College and University Business Officers.

Endowment is money gifted to a university from individual donors, businesses, countries and grant organizations.

The money, which is not allocated toward a university’s operating budget, is invested in various markets, which can do well or poorly depending on the economic climate. Yearly increases and decreases in endowment are usually determined by the performance of the markets in which it is invested.

The increase is a partial rebound for GW’s endowment, which plunged by 22 percent starting in 2000 after job loss and a sluggish stock market brought it down from $738 million to $538 million.

In fiscal year 2003, which ended in July, GW’s endowment increase was precipitated by double-digit surges in its investments in U.S. and international equity markets, said University Chief Investment Officer Donald Lindsey.

About 75 percent of the University’s endowment is invested in equity markets, Lindsey said. The remainder is invested in D.C. real estate, which also saw “significant” growth, he added.

While GW’s endowment has not financed the acquisition or construction of academic and residential facilities, it has been used to purchase hotels, office buildings and retail space in the District, Lindsey said.

The increase will not have an impact on the amount of endowment money GW uses in its yearly operating budget, said Lindsey, who was unsure how much money GW would divert toward next year’s budget. GW traditionally spends about 5 percent of its endowment.

The University also saw a 7.5 percent return rate, or about $46 million, on its endowment investments, more than double the national average of 3 percent. The return rate does not include the withdrawals that ultimately determine whether a college’s endowment will increase over a year.

Executive Vice President and Treasurer Louis Katz could not be reached for comment. University President Stephen Joel Trachtenberg declined through his assistant to comment.

The endowment increase came several months after GW announced an end to its Centuries Campaign, which raised about $550 million over the course of several years.

While most of the money went to GW’s budget, the campaign spurred several donors to give money to the University’s endowment fund, said Vice President for Advancement Beverly Bond.

“It helped us to make people more aware of the good things we’re doing and the needs we have,” she said.

Bond said donations to GW’s endowment are “unusually large” sums of money that are typically not given to the University until the benefactor dies.

Last year, GW alumna Catherine McCormick donated $9 million to the University’s endowment fund, Bond said. An anonymous donor gave $4 million.

Harvard University, which has an endowment that is almost double its nearest competitor’s, boasted an $18.8 billion fund in 2003, according to last week’s report.

Boston University, which is comparable to GW in size and wealth, registered a 7.2 percent endowment surge that increased its fund to $620 million.

Colin Riley, BU’s director of media relations, attributed the increase to an upturn in the economy, which he said is a “positive sign” indicating a possible return to the late 1990s, when many universities saw huge increases in their endowment funds.

National Association of College and University Business Officers spokesman Damon Manetta said last year’s economic recovery has led to a partial recovery in colleges’ endowments, a trend he said officials are hoping will be sustained.

Universities that want to see a high rate of return on their endowment investments should diversify their portfolios, Manetta said.

Lindsey said GW is looking to de-emphasize the significance of its real estate holdings and would invest more in equity markets in the future.

In the first two quarters of fiscal year 2004, the University saw a 9.7 percent return rate on its investments in U.S. and international markets, which Lindsey called “very strong.”