1. Recent Declines in Endowment Market Values and Their Possible Effect on Institutional Finances

2. 2008 NES Overview
796 Institutional Respondents (Representing 791 Endowments)
$412.8 billion in Endowment Assets
Endowment Performance, Market Values, and Asset Allocation as of June 30,2008

3. Endowment Income Accounts for 12% of Average Total Operating Revenue at the Largest Endowments
Avg. Endowment Distribution
($1,000s)
Pct of Operating Rev.
Avg. Tuition & Fee Revenue ($1,000s)
Pct. of Operating Rev.
Greater than $1 billion
166,359
11.9%
255,894
18.3%
$500 million to $1 billion
31,285
5.8%
118,565
22.0%
$100 million to $500 million
10,539
3.6%
78,878
26.7%
$50 million to $100 million
3,427
2.7%
45,080
35.3%
$25 million to $50 million
1,745
1.6%
34,804
32.0%
$25 million or Less
387
0.8%
15,412
32.6%
Public
3,761
1.8%
40,938
19.3%
Independent
11,465
11.1%
37,837
36.5%

4. Average Sources of Funding for Institutional Grants for Four-year Private Colleges and Universities in , by Undergraduate Admissions Selectivity Level

5. Nominal Average Investment Returns for College and University Endowments, FY08 and Estimated for FY09 (to Nov. 30)

6. Percentage Change in College and University Endowment Market Values, FY08 and Estimated for FY09 (Through Nov. 2008), by FY08 Endowment Market Value

7. How Decline in Endowment Value Will Affect Endowment Draw, by FY08 Endowment Size
No Change Planned
Plan to Decrease FY09 Endowment Draw
Plan to Increase FY09 Endowment Draw
Don't Know/No Response
Over $1 billion
74%
16% 3% 8%
$500 million to $ 1 billion
68%
25% 5%
$100 million to $500 million
61%
30% # 9%
$50 million to $100 million
65%
27%
$25 million to $50 million
60%
28% 1%
10%
$25 million or Less
45%
Total
11%

8. Chief Financial Officer’s Preferred Strategies for Dealing With New Fiscal Restraints
Preferred Strategy
Mean Preference Score
Increase Tuition and Fees
4.03
Increase fund-raising
4.01
Emphasize resource sharing
3.58
Build partnerships with industry & business
3.29
Increase number of adjunct faculty
3.06
Defer maintenance
2.99
Reduce administrative positions
2.95
Initiate hiring freeze
2.50
Initiate across-the-board budget cuts
2.23
Reduce number of faculty
1.92
Mean Score Interpretation: 1=Never; 3=Sometimes; 5=Always.
Source: Garret, M.D The Influence of Financial Pressure on Academic Administrators’ Selection of Management and Resource Allocation Strategies.

9. Comments on the Possible Impact of the Endowment Declines on Institutional Finances
Budget cuts and hiring freezes:
“We have frozen the creation of any new positions, asked for non-mission critical expenditures to be suspended, will review any vacant positions before deciding to refill, and will not be increasing any departmental budgets for the next fiscal year.”
Fewer funds available for financial aid:
“Student scholarship dollar availability will be less, at a time they are most in need.”
Concerns about the future:
“We are more concerned about what will happen if the financial downturn doesn’t begin correcting in the next year, then FY 2011 and beyond could usher in some hard choices.”