Recession reduces US college endowments for second year

The global financial crisis coupled with the recession did not spare US college and university endowment funds last year as many of the wealthiest universities lost billions of dollars as the value of their endowment investments fell, forcing them to cut spending and education subsidies.

In the worst-ever year recorded for the colleges and universities' endowment funds, endowments lost an average of 23 per cent of their value in the fiscal year that ended June 30, said two independent surveys yesterday.

The survey, conducted by the National Association of College and University Business Officers and Commonfund, Inc., said that the four largest and richest universities, Harvard, Yale, Stanford, and Princeton, whose endowment are collectively worth $93 billion as of June 2008, fell by more than 25 per cent.

Since the survey began in 1971, the funds had not lost more than 11 per cent in any fiscal year, making this the biggest loss barring the loss during the great depression of the 1930s.

At the end of 2009 fiscal year, Harvard University's endowment of $37 billion, fell by 29.8 per cent, though it continued being the richest university with $25.7 billion. Yale's endowment was second at $16.3 billion after losing 28.8 per cent from $23 billion from fiscal 2008.

University of Virginia lost 23 per cent in its endowment value to stand at $2.6 billion, Johns Hopkins University's endowment fell by 22 per cent to $2 billion and Georgetown University's endowment lost 17 per cent to $883 million.