Endowment returns hit historic lows, but institutional spending is up
- A new survey from the National Association of College and University Business Officers reveals that college endowments have dropped an average of nearly 19% over the last 21 months, but have marginally increased spending over the same period.
- The Washington Post reports on the more than 800 colleges included in the survey which average about $640 million in endowment assets but which increased median spending of returns by just over 8%.
- The report shows that smaller schools with endowments below $25 million fared better with portfolios largely comprised of safer investments, such as bonds.
The struggling stock market has wreaked havoc on schools like Harvard University, which has transformed its endowment operations with new leadership and outsourcing over the last two years to regain footing. But smaller institutions have a smaller margin of error for investing and should consider additional ways to create new revenue streams.
Many schools are increasing their real estate and commercial holdings and marketing the services exclusively to alumni and proximate residents. Others are creating innovation hubs to hold a stake in start-up companies, which creates returns for initial investment. There are a number of creative ways for institutions to find money while remaining within the mission of the academic enterprise.
- Washington Post College endowment returns sink to their lowest level since the financial crisis
- Education Dive UConn launches innovation investment fund