Endowment Falls Over Fiscal Year

The value of Columbia’s endowment fell slightly from $7.24 billion to $7.08 billion over the last fiscal year, making the University one of three in the Ivy League to report losses over that period.

The 2 percent drop, reported online Wednesday in Columbia’s annual financial statement, represents the change in the value of the endowment between July 1, 2007, and June 30, 2008. The drop seems to suggest that Columbia’s investments were already feeling the crunch of the current financial slump before the markets fell in earnest over the last two months.

The report comes a week after University President Lee Bollinger sent an e-mail addressing the current economic situation to the Columbia community. In the message, Bollinger explained that despite successful fund-raising efforts, Columbia was “not immune to the problems of the national economy,” adding that the recent shift in the market would place “pressure on endowment support for operations since our endowment—like those of our peers—has suffered from the downturn in the markets.”

All Ivy League schools reported endowment performance significantly less than the double-digit gains that they have been accustomed to in recent years, though only two other schools, University of Pennsylvania and Dartmouth, reported a loss. According to the Daily Pennsylvanian, Penn’s student newspaper, the school’s endowment fell by nearly 4 percent over the last fiscal year to $6.3 billion, while Dartmouth’s endowment fell by $100 million due to institution spending, student newspaper The Dartmouth reported. Harvard, Yale, and Princeton each reported modest single-digit growth, although their returns were far below those of recent years. None of the numbers reported so far includes any information about what toll the recent slump in the financial markets has taken on university endowments.

In an interview last month, Bollinger said that while Columbia is bracing for the impact of the economic crisis, he believes that because of strong endowment returns in recent years the University is in good shape to weather it. Columbia draws 5 percent of the endowment for the operating budget annually, an amount that is usually less than the total increase in the value of the endowment.

“You’re always taking 5 percent no matter what you make, because you figure some years you make 20 percent and some years you lose 10,” Bollinger said. “It all evens out over time.”

jacob.schneider@columbiaspectator.com