Endowments Down

Catching up on stuff I’d been ignoring, I see Harvard President Drew Gilpin Faust sent a letter to the community on a subject I’d been wondering about — what’s happened to all these university endowments:

Consider, first, the endowment. As a result of strong returns and the generosity of our alumni and friends, endowment income has come to fund more than a third of the University’s annual operating budget. Our investments have often outperformed familiar market indexes, thanks to skillful management and broad diversification across asset classes. But given the breadth and the depth of the present downturn, even well-diversified portfolios are experiencing major losses. Moody’s, a leading financial research and ratings service, recently projected a 30 percent decline in the value of college and university endowments in the current fiscal year. While we can hope that markets will improve, we need to be prepared to absorb unprecedented endowment losses and plan for a period of greater financial constraint.

She doesn’t include any specific details, but it’s strange to toss that “30 percent decline” figure out there without saying anything further. You would think that if they’ve lost less than 30 percent they would say so.