<p>Here's a link to a letter from President Levin to faculty and staff outlining the endowment's performance and various budget cutting measures. Given the state of the economy, I think it's a pretty decent showing:</p>
<p>Related Yale Daily News article: Yale</a> Daily News - ENDOWMENT FALLS 25 PERCENT; NEW SOM CAMPUS DELAYED, NEW COLLEGES COULD BE NEXT</p>
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But certainly the most dramatic announcement in Levin’s letter was his fifth point — that major construction projects would be stalled because of the economic woes. Levin said the renovations of Morse and Ezra Stiles Colleges would not be delayed, and he said no already-approved projects would be canceled. </p>
<p>Even still, Levin said that construction on the already-delayed Yale Biology Building project will be postponed for another year, and that the new campus for the School of Management and the second phase of the renovation of the Yale University Art Gallery will be tabled indefinitely “until funding is secured or market conditions improve,” as Levin put it. </p>
<p>Design work and fundraising for the two new residential colleges will continue, Levin said, but that project may also be delayed. Planning and development at the West Campus will also continue, albeit at a slower pace, the president said.
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<p>Related link: </p>
<p>To put things relative to other universities, Levin noted "from July 1 through October 31 was a negative 13.4%" while Harvard lost 22% during that same period. </p>
<p>The 25 percent figure is taking into account all losses (Harvard's taking into account all losses is estimated at over 30 percent). </p>
<p>That said, the depression is real. The WORLD is suffering. Luckily, Yale does not have to put in measure things like a hiring freeze. Because Yale is still recruiting and H, S, P, are not, maybe we can get some additional great profs.</p>
<p>This just makes me want to go to Yale even more.. The president says specifically financial aid will remain a top priority.</p>
<p>I was also pleased to read that Yale would not reduce financial aid, freeze faculty hiring, or postpone planned renovations of two Residential Colleges. Decisions like this confirm Yale’s commitment to its undergraduate program.</p>
<p>I love how it jumps straight to "well we r better than Harvard coz we lost only 5% less!!111ONE!1", and I dont think any of HPS have said they will cut aid either, so.....</p>
<p>wow, that makes me even more grateful for my aid package; its awesome. it makes me like yale even more, that despite the financial mess its in, it still is willing to invest in me.. and i am an international student.. very cool!</p>
<p>Simple math:</p>
<p>In Levin's letter, he writes, "Still, the 25% decline we have experienced has a very significant impact on our operations because income from the endowment supports 44% of the University’s annual expense base of $2.7 billion." Which means that even if there is NO incoming money and the university needed to rely SOLELY on the endowment, Yale will still have enough money to make it through the next four years. If Yale sticks the endowment in a 12-month CD and gets 3% on it, it'll be more than 500 million each year. Of course I'm not counting a variety of factors, but the college is not going bankrupt anytime soon. Not while they're soliciting me for money every 2 weeks.</p>
<p>While that is true, nervous, it's still a tough financial situation, because the more you spend of the endowment, the harder it is to recover. If Yale were to start dipping farther into the endowment for yearly operating expenses, you very quickly get to a place where the endowment is in a slow death spiral. Even if it were to only do this for 2 years, you'd have the endowment down to $11 billion, with the expectation from everyone (students, staff, prof) that you can still have a $2.7 billion budget the next year. So you need to have about a 25% return on your investment/endowment to be able to afford this, or the whole thing starts to fall apart, since with each year the endowment will get lower, requiring an even more miraculous investment scheme to keep it from tanking. Swenson has got us over that 20% mark, but there are some miracles even he can't pull off, especially given the market conditions in the near future.</p>
<p>My heart bleeds for Yale, really...and I'm glad my ghetto Ivy depended on endowment for 7% of expenditures, not 44%..</p>
<p>Sorry -- I was not implying that that's what Yale should do, nor is it what it needs to do. I was simply pointing out that while losing 25% is an obstacle, it is not an insurmountable one; a lot of good colleges have gotten by with a lot less than $17 billion, and if anything Yale's brand equity is probably worth around the money that was lost. </p>
<p>Yale's financial situation right now should not deter anyone from applying to the college, nor should it influence anyone's decision as to whether they should go there. As the college has said over and over again, they are firmly committed to financial aid and unlike Harvard, the Yale undergraduate college IS the centerpiece of Yale University. The Yale financial aid policy right now is about five times more generous than it was two years ago, in Swensen's hedge fund heyday, and Levin's public promise not to freeze hiring (instead seeing it as an opportunity to grab important faculty that Harvard will miss) actually makes this a better time than ever to go to Yale.</p>
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My heart bleeds for Yale, really...and I'm glad my ghetto Ivy depended on endowment for 7% of expenditures, not 44%..
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<p>That's because it has a significantly smaller endowment and can't afford to take that much money out of it. ;)</p>
<p>nervous: Would you elaborate about "Not while they're soliciting me for money every 2 weeks"?</p>
<p>I hope they have sufficient liquidity in their endowment.</p>
<p>Sorry -- I'm actually an alum, and they like to bleed us dry.</p>
<p>Edward</a> Jay Epstein: How Much Has Harvard Really Lost?
Edward Jay Epstein writes in the Huffington Post that according to a source close to HMC the value lost in the Endowment is atleast $18 Billion or 50%. Takes alot of guts to accept those bonuses when you know you have just lost $18 billion.</p>
<p>Harvard University's admission that it lost $8 billion from its $36 billion endowment fund, as staggering as it sounds, may grossly underestimate the true magnitude of the loss between from July 1 through Oct. 31 2008. According to a source close the Harvard Management Corporation (HMC), which runs the fund for Harvard, the loss is closer to $18 billion if the losses on the fund's illiquid investment are realistically appraised.</p>
<p>Is it true that Bernie Madoff attended Yale B.A. and Harvard Law? If this is true, I would think these schools would want articles in the New York Times to emphasize the Ethics courses that they teach. The emphasis placed on Hedge Funds is concerning in that many people are beginning to think they are all Ponzi Schemes. If confidence is lost, will the Yale Endowment be able to sustain their spending?</p>
<p>According to Wikipedia, Madoff graduated from Hofstra.</p>
<p>Do you think the huge endowment losses will have any play on admissions.
I know they say they are need-blind, but do you think some of the top schools just might start looking at who checked the box at the top of the page when considering admissions?
It would be awful and unfair, but in some ways it makes sense for them....</p>
<p>I absolutely need Financial Aid, so I really hope they are as need-blind as they say.</p>