NotesFAQContact Us
Collection
Advanced
Search Tips
ERIC Number: ED559245
Record Type: Non-Journal
Publication Date: 2009-Mar
Pages: 36
Abstractor: ERIC
Reference Count: N/A
ISBN: N/A
ISSN: N/A
Endowment Spending: External Perceptions and Internal Practices
Lapovsky, Lucie
Commonfund Institute
During the economic expansion of the past several years, interest in the subject of spending broadened as public interest groups, the media and the Senate Finance Committee voiced concerns about whether colleges and universities were distributing enough from their endowments each year. Critics argued that after many years of strong investment returns, accompanied by rising tuitions, college and university endowments had grown too large and that educational institutions were hoarding money that should properly be spent. Even after the calamitous final three months of calendar 2008, when some of the largest endowments saw their value reduced by billions of dollars, the expressions of concern have continued. By comparison, relatively little has been written about the other side of the equation--how educational institutions actually use the funds they draw from their endowments. This topic is important on its own, but in the existing environment in which the fairness, and even the desirability, of large educational endowments are being questioned, it becomes even more timely and relevant. How do endowment funds influence the operational priorities of educational institutions? How do they affect the way in which institutional operating budgets are developed and funds are distributed? This paper examines spending from two different perspectives. The first perspective is external--what outside observers see. The research for this section is drawn from 102 of the letters submitted by colleges and universities in early 2008 in response to a request from the Senate Finance Committee to the 136 educational institutions with endowments of $500 million or more. The second part of the paper, an examination of endowment spending from an internal perspective, focuses on the annual budgeting and spending practices of colleges and universities, and reviews how these practices differ in institutions of varying types, endowment sizes and other characteristics. Contrary to the external perception that all spending is fundamentally the same, this analysis reveals that, in practice, there is a range of approaches to budgeting and spending decisions and they have consequences for the programs and missions supported by the endowment. Appended are: (1) United States Senate Committee on Finance, Letter to 136 Colleges Seeking Details of Endowment Pay-0uts, Student Aid; (2) Interview Questions for Study on Endowment Spending; (3) About the author; and (4) About Commonfund Institute and Commonfund.
Commonfund Institute. 15 Old Danbury Road, Wilton, CT 06897. Tel: 203-563-5000; Tel: 888-823-6246; Web site: http://www.commonfund.org
Publication Type: Reports - Evaluative; Numerical/Quantitative Data; Tests/Questionnaires
Education Level: Higher Education; Postsecondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: Commonfund Institute