B is for billions.
On Wednesday, the Sustainable Endowments Institute released a College Sustainability Report Card that gave Columbia a B in endowment transparency.
The University’s finance division is expected to post its annual audited financial statement on its Web site by the month’s end, to show the breakdown of revenues and cash flow across Columbia’s disparate parts. In the meantime, avid University finance-watchers may have been spoiled this year by more frequent updates on the condition of Columbia’s endowment.
One such announcement came about a month ago, when the University released a statement saying that losses were minimized to 16 percent by the end of June. According to senior executive vice president Robert Kasdin, this left Columbia with an unaudited preliminary total of $5.7 billion—after standard spending of about 4 to 5 percent annually.
Other updates, often in the form of e-mails from University President Lee Bollinger, were released in late January and again in May after a broader November memo on potential economic fallout. Columbia strayed from its annual endowment disclosure policy, Kasdin said, to satisfy curiosity and assuage concerns about the raging economic crisis. The fund had been valued at $7.1 billion as of June 30, 2008.
The University also seems to have been encouraged by the frequency at which peer universities have been disclosing their financial status during the recession—Harvard kicked of the stream of unexpected reports last year. This year, Columbia released the September statement shortly after Harvard and Yale informed the world of their doomsday finances, with Harvard down 27.3 percent (down to $26 billion by June 30 from $37 billion one year before) and Yale plummeting by 30 percent—leaving it with approximately $16 billion.
And these peers have become part and parcel of the Columbia endowment song and dance.
The September statement remarked that, “Although comparative data with the full set of our peers for FY09 is not yet available, over the previous five years Columbia’s investment performance ranked within the top quartile of large university endowments and private foundations.”
In his May message on what was then a 22 percent endowment loss as of the end of March, Bollinger added, “While the University has not been as negatively affected as many of our peers, it is never an easy matter to address a world that has taken a sharp turn for the worse for a great many people.”
In the same e-mail, he wrote, “While hardly good news, my sense is that this constitutes strong relative performance both compared to benchmark averages in the financial markets and university endowments nationally.”
While Columbia has performed relatively well, these comparisons fail to mention that, even after severe losses, Yale’s endowment is still almost triple that of Columbia.
Still, as Vice President for Arts and Sciences Nicholas Dirks explained in an interview, this refrain is refreshing. “For a long time, we used to say we’re doing a heck of a lot worse,” he said.
After years of seeing riskier endowment management rake in millions, the role reversal is pleasant.
“We’re not really as endowment dependent,” he added, noting that the University’s overall 13 percent reliance on endowment funds has tempered the severity of cost-cutting measures.
Looking ahead, Bollinger told Spectator that fundraising is key. “We have to keep the momentum going beyond the Capital Campaign,” he said, noting that Columbia’s plan to raise $4 billion is ahead of schedule. The University raised $495 million three years ago and a current sum of $413 million this year. Though substantial, this amount is less than those raised by Stanford and Harvard, which reach $600 and $700 million respectively.
Bollinger remains optimistic as Columbia prepares its new set of financial numbers. When asked how things are going in general, he said, “I think this is the best moment since I’ve been here.”
COMMENTS
Comments will be moderated in accordance with our comment policy