College Endowments Take Financial Blow
For many families, last year was not a year to be very thankful. In one month alone, 533,000 people lost their jobs, sending the unemployment rate to 6.7%. But jobs aren’t the only cuts that have been made in the past few months. College endowments have taken quite a blow as alumni cut their financial ties and save for economic times that are only going to get worse.
New buildings, faculty payroll, and merit and financial aid come from college endowments. Basically, the longevity of a college and its ability to fund itself in order to be competitive in the college market depends on alumni giving to the college. So what happens to the endowments when alumni can’t give?
- Northwestern University has lost more than 14% of its nearly $7 billion endowment.
- University of Maryland’s endowment has decreased by $63 million since the beginning of the year.
- Michigan State’s endowment has declined by 10%…and that’s just the rate from the third quarter.
- Seattle University has lost about 10% of its endowment as well.
Obviously, no university, regardless of size and stature, is safe from the dwindling numbers. Universities like Yale and Harvard aren’t even immune to low alumni giving as a result of the economy. Granted, these universities still have billions in their endowments, but they are “suffering” in monies just like every other college.
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