I remember when I was at Harvard hearing a lot about how the endowment there wasn’t just big, it was exceedingly well-managed. You know, by people so smart they impressed Harvard smartypantses with their smarts. But not smart enough to dodge a downturn, it seems:
Harvard officials say the university’s largest-in-the-nation endowment lost about 22 percent of its value, or $8 billion, in the four months since the end of the last fiscal year. […] They say the university should plan for a 30 percent drop in endowment value by the end of next June.
[Executive Vice President Edward] Forst tells The Harvard Crimson student newspaper that the 22 percent estimate may be conservative because some university money is handled by external managers that have yet to report figures.
Of course a 30 percent loss isn’t actually so bad given the current market climate, especially if the university really did get larger-than-normal returns during the upswing years. So maybe these guys really do know what they’re doing.
Meanwhile, giving money to wealthy elite universities still doesn’t make much sense. If you want to donate to something in the educational field, find a small, un-famous school that seems to be doing a decent job and could really put money to good use and help them out. Or find a local charter school (or my friend Komal’s school in Boston) that’s getting good results with disadvantaged kids and help them.