University endowment down 30 percent, further difficulties expected
Despite some indicators that the global economy is gaining strength, Washington University’s financial situation has not improved since April, according to an e-mail sent by Chancellor Mark Wrighton Wednesday afternoon.
Although the University took several cost saving measures over the summer, it continues to face an annual shortfall of about $30 million per year through the 2011 fiscal year and beyond.
The most significant source of trouble for the University’s finances is the continued decline of the endowment. As of June 30, 2009 the market value of the endowment, about $4.2 billion, is down by 30% from its peak value of two years ago.
“This downturn is very significant and has resulted in a decrease in endowment payout of $9 million,” Wrighton wrote. “We anticipate additional years of lowered payout, and are planning for another $9 million decrease in FY11.”
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If you check the annual growth rates of the top 25 endowments, WashU is almost the lowest. Check http://en.wikipedia.org/wiki/List_of_colleges_and_universities_in_the_United_States_by_endowment
OK, you should notice that two years ago, HYPSM had smaller endowment values than one year ago.
actually if you read carefully, it says wash u is down 30% from its peak of **2 years ago**. harvard, stanford, etc. are losing 25-30% each year. wash u lost 30% over 2 years. So, actually … not as bad.
There may be a bit of an incentive to make it sound a bit worse to justify the belt-tightening, drum up fundraising.
The school is definitely feeling the pinch, but on the whole it’s probably a sign of healthy caution that they are playing up the negative.
Fire the fund manager if he couldn’t beat the market.
Maybe we need to reduce some of these high powered positions like executive vice chancellor, vice chancellor, associate vice chancellors, why do we need these many administrators, seems like we are top heavy
How does Wash U manage to lose as much as Harvard and Yale, percentage-wise, but not make comparable percentages in better times?
It’s like our endowment is more risky, with less payoff, than other schools.
What’s the deal?