Category Archives: endowments

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Moody’s Issues Negative Outlook for Higher Education

On the heels of a similarly downcast assessment by Standard & Poor’s, Moody’s Investors Service has issued a negative outlook for the higher-education sector in the United States. The credit-rating agency also issued individual reports on median benchmarks for the finances of public and nonprofit private colleges, noting significant tuition-revenue declines at both types of institutions.

While American higher education faces limited growth prospects over the next 12 to 18 months, Moody’s says, p…

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UCLA Sets $4.2-Billion Campaign Goal, Largest by a Public University

The University of California at Los Angeles announced on Friday a $4.2-billion campaign, the largest goal sought to date by a public university in the United States.

The Centennial Campaign is scheduled to conclude in 2019, the 100th anniversary of the university’s establishment. The bulk of the campaign’s total—$1.65-billion—is earmarked to build up the university’s research, while $1.5-billion would go toward student aid and faculty support, including endowed professorships. Some $800-million …

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Many Colleges ‘Hoard’ Endowments During Rough Economic Times

When the economy is doing well, many colleges increase their endowment spending on new programs, new buildings, new positions, and breaks in tuition. But when times are tough—at precisely the moment that campuses could most use the money—colleges’ endowment managers are less likely to spend it.

“That’s a really strange thing to do if the purpose of the endowment is at least in part to help the university overcome economic shock,” says Jeffrey R. Brown, a professor of finance at the Univers…

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$125-Million Bequest Swells U. of the Pacific’s Endowment

The University of the Pacific announced on Thursday that it had received a $125-million bequest that increased the size of its endowment by 59 percent and would allow it to plow more money into scholarships.

In a 2007 announcement of the donor’s intentions, the university estimated the bequest would be worth $100-million, but it said on Wednesday that the size of the gift had swollen by a quarter over the past six years.

The donors were Robert C. and Jeannette Powell, both of whom served as rege…

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Spending Rules for Endowments Change More Often Than Thought

The spending strategies applied to universities’ endowment funds change more frequently than previously thought, according to a new report published by the National Bureau of Economic Research.

According to the report, about half of the 800 endowment funds examined in a study altered their spending rules from 2003 to 2011. The finding runs contrary to existing models, which conclude that the policies should remain largely unchanged over time. In addition, the report states that about 25 percent …

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$250-Million Gift to Centre College Is Withdrawn

An agreement by the A. Eugene Brockman Charitable Trust to endow 160 full scholarships at Centre College, in Danville, Ky., came together this summer after less than two months of negotiations. On Monday officials at Centre announced that the deal had come undone even more quickly because of a “significant capital market event” that left the donor unable to make its planned $250-million stock gift to the college.

The gift, which was to have established the Brockman Scholars Program in Leadership…

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New Gauge of Colleges’ Financial Health Comes Up Short

Forbes magazine is the latest to weigh in on the financial health of colleges, with its new “Forbes College Financial Grades” joining the ranks of the credit-rating agencies, the U.S. Department of Education, and consultants like Bain & Company.

In its August 13 issue, the magazine offers financial grades running from A-plus to D for 925 private, nonprofit colleges based on a nine-part formula it created. The formula takes into account factors like the level of a college’s dependence on tuitio…

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Centre College Receives $250-Million to Create Scholars Program

Centre College announced on Tuesday that it had received $250-million from the A. Eugene Brockman Charitable Trust, the largest gift ever to a liberal-arts institution.

The donation, which is in the form of stock, will be used to establish the Brockman Scholars Program in Leadership and Entrepreneurship for students majoring in computational sciences, natural sciences, and economics at the college, in Danville, Ky. Starting in the fall of 2014, 40 students will receive scholarships covering tuit…

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What It Means to Fail the Education Dept.’s Financial-Health Test

How many nonprofit colleges failed the U.S. Department of Education’s financial-responsibility test for the 2011 fiscal year? That depends on what it means to “pass.”

According to the department, colleges with scores of 1.5 to 3.0 all pass and never hear from the department. (The scores, derived from financial information the colleges provide, run from positive 3.0 to negative 1.0.) Those that score 1.0 to 1.5 do not pass. The department considers them “financially responsible” but subjects them…

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College Foundations Aim Higher, but Performance Stays Almost Flat

Another day, another set of data sketching the continuing financial doldrums of higher education, this time regarding the performance of college foundations.

In its annual survey of 88 institutionally related foundations, released on Tuesday, the Council for Advancement and Support of Education found that 63.6 percent of respondents had experienced a drop in the value of their endowments in the 2012 fiscal year. The median decrease in value was 1.6 percent. Among the 31.8 percent of institutions…