Despite decrease in endowment value, IU moves up in ratings

IU saw its endowment value decrease 0.7 percent between June 30, 2007, and June 30, 2008.

But while the University had a less than stellar year, it was better than many universities. Despite the drop, IU moved up in the national public ranking of endowment value from No. 14 to No. 12.

The turn of profits from university endowments nationwide have heavily decreased due to the downfall of the stock market, but donations made to IU have helped make up for some of the loss. IU received contributions from more than 110,000 donors last year, said Barbara Coffman of the IU Foundation.

“Endowments work in two ways, investment returns and new gifts from donors coming in, and we are very grateful for the contributions from our donors,” Coffman said.

The 0.7 percent decrease in endowment value might affect the University, Coffman said, but not until later in 2009 because of the smoothing technique IU utilizes.

The smoothing technique allows IU’s campuses and schools to receive a steady flow of income throughout the year, Coffman said. That flow of income might draw down the endowment, she said.

Reports from the National Association of College and University Business Officers showed that only five Indiana colleges have experienced an increase in endowment value, Coffman said. This number includes the University of Notre Dame, which had an 11 percent increase in its endowment.

Purdue had a $1.7 billion endowment in July 2008 and ended the year with a $1.4 billion endowment, according to a Lafayette Journal Courier article. This is similar to IU’s decrease from $1.5 billion on June 30 to $1.1 billion December 31, Coffman said.

The United States has not seen such a significant drop in endowments since the 1970s, John S. Griswold Jr., executive director of the Commonfund Institute, said in
The New York Times. As a result, many schools are facing layoffs, enforcing wage freezes and stopping construction.

“I have a suspicion that the results from the next fiscal year, unless the stock market changes dramatically – schools are going to see a dramatic decrease in their endowment,” said IU spokesman Larry MacIntyre.