State's College Endowment Funds Hit Hard

Hollins University's endowment loss was the least among Virginia colleges.^

By DAN SMITH

A study from the National Association of College and University Business Officers and Commonfund Institute is not something most of us would go looking for in normal times, but these days, with Harvard losing nearly 30 percent of its enormous endowment—amounting to the gross national product of a small country—there is considerable interest.

Harvard’s loss of $11 billion between 2008 and the end of 2009 is the most dramatic loss, but on the entire list of 842 colleges and universities in the U.S. and Canada, almost all have some loss and the institutions in the black are almost all tiny by comparison.

The institutions have $306 billion among them. The best performer in Virginia is Hollins University with an impressive -7.2 performance (and in this economy, losing just a little is, indeed impressive). VMI was initially reported to have a plus-40, but VMI Foundation PR Director Scott Belliveau, when questioned, said the numbers for 2009 and 2008 were inadvertently reversed and “we’re a little red-faced about it.” The actual value dropped 28.9 percent, Virginia’s worst, not its best.

The entire list for the U.S. and Canada is here.

Virginia Tech, with a loss of 14.4 percent of its endowment, was ranked second in 24/7 Wall Street’s assessment of the Best Managed Endowments (behind Washington State). Harvard was named Worst Managed.

The average loss for the institutions on the entire list is 23 percent of the endowment, which represents an enormous amount of money.

Liberty University in Lynchburg is not on the list. Explains Chancellor Jerry Falwell Jr., “Liberty has not formed a separate foundation to hold its new endowment. Liberty is a young school (founded in 1971) and most its alumni have not yet reached the point in their careers where they are able to make substantial contributions to the university’s endowment.” Liberty has a restricted fund that serves the same function as a foundation, says Falwell.

For the complete story and the list of Virginia schools, see the March issue of Valley Business FRONT.