<p>Even after the huge hit to its endowment, Harvard has more money than it could ever spend under any scenario.</p>
<p>^^Not really. The moral of this story is that having huge endowment on paper doesn’t help you pay this year’s bills if the wealth is tied up in an investment form that cannot be readily spent or sold.</p>
<p>coureur - that is exactly right. Harvard is a very expensive place to run.</p>
<p>LOL @ the 4 year community college comment. Of course you are right. In fact, Tulane is stronger than ever, the last 3 classes (counting the one coming in this year which is shaping up extremely well) being the strongest academically in school history. The cuts were indeed painful, but it has left what remains, which obviously was the vast majority of offerings, stronger and more focused.</p>
<p>Not sure if this was already mentioned, But Tulane cut a number of their majors following Katrina and needing to consolidate due to decreased enrollments. I honestly don’t think using Tulane’s program trimming is germane to the conversation about schools cutting professors and programs following the economic downturn.</p>
<p>It is germane in that schools can survive cuts in programs and still be healthy, which was the point being discussed in that post.</p>
<p>Also, again in the interest of accuracy, Tulane had one year of decreased enrollment post-Katrina as I understand it. The last 3 years has seen skyrocketing applications (and no that is not due to the free app, they have had that since 2002) and concerns about not oversubscribing the incoming class. The school is in fantastic shape, actually.</p>
<p>I haven’t studied the details of Dartmouth’s layoffs, but among the cuts was my son’s work study job and probably therefore other similarly insignificant jobs, whose elimination won’t impact educational quality in the least.</p>
<p>I may be naive, but I’d like to believe that financial crises can be quite good for educational institutions in the long run, because sometimes the fat that is cut is fat that never should have been allowed to accumulate in the first place. That is most definitely the case with our local school district cuts. The students never needed 150 clubs!</p>
<p>Running leaner and meaner isn’t the worst thing that has happened to colleges such as Harvard, or Tulane.</p>
<p>The lessons learned while experiencing these significant investment income losses may allow them to weather future economic storms. (Granted, these “storms” may never be as “big” as what happened to our economy in the last 18-24 months.) ;)</p>
<p>Danas, I think you are right and at the end of the day you are going to see many of these wealthy institutions going out to their donors with a request for (fill in the blank)billion dollars to recoup what they lost in order to maintain the standing of the University. Reaction will be interesting.</p>
<p>Donors’ priorities don’t always align with academic ones. For example, in the last fund-raising campaign, Harvard donors endowed each and every coach position first. Meanwhile, the library was not able to reach its goal, and funding for graduate students similarly attracted little interest on the part of donors. But one donor gave $5 million to restore the pyre on Memorial Hall that had been damaged during a fire in the 1950s. This was not a university priority. But today, the pyre is atop Memorial Hall, and the library suffered huge cuts in the latest downturn. There is still no dedicated endowment for graduate fellowships (the more loyal and affluent alums are those of the College or professional schools. The Graduate School of Arts and Science turns out Ph.D.s)</p>
<p>[Yale</a> Daily News - Baseball gift going to court](<a href=“http://www.yaledailynews.com/news/university-news/2010/04/07/baseball-gift-going-court/]Yale”>http://www.yaledailynews.com/news/university-news/2010/04/07/baseball-gift-going-court/)</p>
<p>Marite-funny you mention coaching endowments!</p>
<p>Sm74:</p>
<p>What a story! Thanks for linking it. The Harvard fund-raising campaign happened in the 1990s. Maybe before the managers got involved in risky investments?</p>
<p>Well hopefully Harvard’s coaching positions were covered by more reputable donors. Only in America can a company generate no revenue between 2004 and 2007, the CEO donates $1.7Million from that non-revenue generating company, and he gets a baseball diamond named after him at Yale. I guess that’s the financial engineering they are learning at these places.</p>
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<p>That’s really sad.</p>
<p>Indeed, GSAS continues to have no endowment of its own.</p>
<p>I think what most big time donors want is their name in big letters on a building. Giving to make up for a screw up at the endowment management office would probably be a pretty tough sell.
As far as sports seems that Dartmouth has hit upon the new trend in sports-make alumni endow sports programs if they want to see them continue to exist.</p>
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<p>I bet jerseys carrying a sponsor’s logo for a season would raise some bucks - it’s worked for years among professional soccer teams, at least outside the US - my favorite soccer teams in Latin America wore “Bud”, “Pepsi”, and “Wal-Mart”</p>
<p>[FT.com</a> / Markets / Insight - Singapore?s lesson from Harvard model](<a href=“Singapore’s lesson from Harvard model”>Singapore’s lesson from Harvard model)</p>
<p>Alot of pensions/endowments/sovereign wealth funds asking the same question-why pay such lavish fees to PE/Hedge Funds. Why not do that stuff yourself. Some U’s could pool their allocations to PE and do it themselves and save alot of cash, and have much better control, confidence, and transparency over their investments.</p>
<p>Canadian Pension system has already made the move.</p>
<p>[Cornell</a> Faces Moody?s Rating Cut as Swaps Backfire (Update1) - BusinessWeek](<a href=“Bloomberg - Are you a robot?”>Bloomberg - Are you a robot?)</p>
<p>Not looking good at Cornell. New borrowing brings debt to over 50% of the endowment</p>
<p>Maybe these schools will think twice before entering anymore swaps. On the positive side…I wonder if the schools saved any money by using variable rates over fixed rates?</p>
<p>[Business</a> finance news - currency market news - online UK currency markets - financial news - Interactive Investor](<a href=“interactive investor – the UK’s number one flat-fee investment platform”>interactive investor – the UK’s number one flat-fee investment platform)</p>
<p>Yale’s Swenson states what was pretty obvious-that the only reason they are becoming so heavily invested in alternative,illiquid investments is because they had no choice due to the high level of capital committments to alternatives. </p>
<p>Ofcourse they could sell on the secondary market but I think they pretty well understand that they would still not get very good prices for their investments.</p>