The University endowment has lost 18 percent of its value since June 30, which is less than the average losses incurred by other schools but still significant.
At the end of fiscal year 2007-08, the University’s endowment was worth $438 million, according to the UO Foundation’s annual report. Because of market losses during the fall of 2008, the amount dropped to $359.2 million.
The $78 million loss counteracted the $19 million the foundation had raised for the endowment during that year.
The University’s endowment is an amount of money invested in the market that helps fund scholarships and faculty support, among other campus projects and necessities, foundation Chief Investment Officer Jay Namyet said. Namyet said the foundation distributes about 4 percent of the endowment yearly, while the rest is kept in the investments.
The University is not alone or unusual in its losses. According to a study done for the National Association of College and University Business Officers, endowment values fell 23 percent between July and November 2008. The study included data from 796 colleges and universities from around the U.S. and Canada.
Although the University has lost 5 percent less than the average, it had less to lose. Namyet said the University’s endowment was the second-smallest in the Pacific-10 Conference as of June 30.
Endowment losses are worrying universities. Dartmouth University, which also lost 18 percent of its endowment, told the New York Times on Jan. 26 that layoffs would be inevitable.
Jim Bean, senior vice president and provost at the University, has yet to announce any layoffs.
Bean said programs funded by endowment earnings would likely show a reduction during fiscal year 2010, which begins July 1.
In regard to faculty reductions and layoffs, Bean said in a press release, “President Frohnmayer has made saving campus jobs a high priority. Truth is, we can’t really spare anyone.”
The University’s response to budget cuts, in the endowment and otherwise, has been varied. Bean announced Thursday that the faculty office renovation program, scheduled for summer 2009, has been postponed to save about $100,000.
In addition, Bean said the University is trying to cancel expensive graduation and convocation speakers it had already made arrangements with, in order to save more money. Departments are lowering costs wherever possible.
The losses to the endowment are not expected to be permanent, Namyet said. He said that while the foundation has invested endowment funds in markets that could lose money, the investors think that in the long run, the investments should profit the University.
The endowment money is invested in U.S. and international stocks, as well as real estate, natural resources, energy and capital, Namyet said.
Because the endowment is invested in the market, how the market does determines how the University’s money does. The University does not know how the endowment will continue to fare in the current economy, Namyet said.
“Time and experience will dictate this outcome,” he said.
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