University endowments continue to struggle

Donor gifts are down, and endowments are still recovering from the economic downturn.

By Kim Peterson Jan 29, 2010 12:39PM
College and university endowments are still in the red, suffering an average loss of nearly 19% for the year that ended June 30, BusinessWeek reports.

And if that wasn't bad enough, schools are seeing a decline in gifts and having to spend more endowment money just to get through hard times. They are spending more than they're earning.

Schools with the largest endowments (of more than $1 billion) withdrew 4.6% of their assets in the year. That's higher than average.

Harvard continues to be one of the biggest endowment train wrecks, with its endowment falling by 30% in the year to $25.7 billion, BusinessWeek reported. No other endowment had that kind of staggering loss, although Yale was in second place with a 28.6% drop to $16.3 billion.

Both of those schools relied on, oh, shall we say, "creative" investment instruments such as derivatives, managed futures and distressed debt. They made some nice coin in the good years, but lost big when the economy went sour.

But some endowments actually posted gains for the year, and experts say those are the ones who made conservative fixed-income investments.

Experts tell BusinessWeek that most endowments should recover in this fiscal year, which ends in June, particularly given the market rally in recent months.

3Comments
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

116
116 rated 1
265
265 rated 2
429
429 rated 3
612
612 rated 4
499
499 rated 5
525
525 rated 6
701
701 rated 7
533
533 rated 8
337
337 rated 9
131
131 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
UPLULTRA PETROLEUM Corp10
COPCONOCOPHILLIPS9
TAT&T Inc9
DVNDEVON ENERGY CORPORATION9
EOGEOG RESOURCES Inc9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.