2008 Woodie Awards
UConn Foundation loses $32 million
Christopher Duray
Issue date: 9/25/08 Section: News
The UConn Foundation, which manages the university's $400 million endowment, has lost roughly $32 million so far this year.
The losses came primarily from public investments. There was a 5.5 percent drop across all public investment returns, including a particularly bad 17 percent loss in real estate. While they predict a decline in private donations as the economy tightens around investors wallets, administrators are nonetheless optimistic about UConn's fundraising future.
Pressure on the Foundation is particularly great this year as well, as recent state-wide budget cuts demand a renewed importance on finding outside funding.
"At a time when the university would like us to step up and provide greater support, we're feeling the impact of a declining market value for our endowment," said John Martin, president of the UConn Foundation. "There's no easy out of the financial crisis."
This is particularly true considering UConn has a relatively small endowment compared to other top universities, some of whom have over a billion dollars of funding and, according to a U.S. News and World Report article, have actually outperformed the market, earning 21.3 percent on their endowments in some cases.
Martin says that the endowment, which as of June contained about $400 million, should still be able to ease at least some of UConn's budget woes as the majority of the endowment is restricted to scholarships and faculty income for which they provided a significant $13 million spending allocation last year.
Bleak as the market is though, according to Kevin Edwards, the associate vice president for treasury services, the UConn Foundation is not in severe danger, particularly considering that the 2007 financial year was a profitable one.
Publicly traded investments "are only part of the picture, and real estate is only a small part of our endowment investments," Edwards said. "We have private investments which are more commercial and those have actually been doing quite well. We've actually been making money up through June 30. It's not the prettiest of pictures, but we're not in terrible shape or crisis mode considering what's happening in financial markets."
Martin added that the school slightly surpassed their fund raising efforts last year, though he was quick to point out that the future was unpredicitable.
"Who knows what's going to happen this year," he said. "We're running with about $1.7 million more gifts than last year, but it's still very early in the year."
Edwards said the foundation was already looking at ways to improve their profits.
"We have been instituting several plans taking us away from public markets, which is what everyone is focused on. We'll never be out of them completely, but we're looking to reduce our exposuree in this area."
Martin, meanwhile, is hoping for federal intervention as well.
"[The country is] looking for some action on the part of Congress to stabilize the market and we all need that," he said. "We all work very hard to build the endowment and attract the contributions of the university and it's painful when we see a decline in the level of value."
The losses came primarily from public investments. There was a 5.5 percent drop across all public investment returns, including a particularly bad 17 percent loss in real estate. While they predict a decline in private donations as the economy tightens around investors wallets, administrators are nonetheless optimistic about UConn's fundraising future.
Pressure on the Foundation is particularly great this year as well, as recent state-wide budget cuts demand a renewed importance on finding outside funding.
"At a time when the university would like us to step up and provide greater support, we're feeling the impact of a declining market value for our endowment," said John Martin, president of the UConn Foundation. "There's no easy out of the financial crisis."
This is particularly true considering UConn has a relatively small endowment compared to other top universities, some of whom have over a billion dollars of funding and, according to a U.S. News and World Report article, have actually outperformed the market, earning 21.3 percent on their endowments in some cases.
Martin says that the endowment, which as of June contained about $400 million, should still be able to ease at least some of UConn's budget woes as the majority of the endowment is restricted to scholarships and faculty income for which they provided a significant $13 million spending allocation last year.
Bleak as the market is though, according to Kevin Edwards, the associate vice president for treasury services, the UConn Foundation is not in severe danger, particularly considering that the 2007 financial year was a profitable one.
Publicly traded investments "are only part of the picture, and real estate is only a small part of our endowment investments," Edwards said. "We have private investments which are more commercial and those have actually been doing quite well. We've actually been making money up through June 30. It's not the prettiest of pictures, but we're not in terrible shape or crisis mode considering what's happening in financial markets."
Martin added that the school slightly surpassed their fund raising efforts last year, though he was quick to point out that the future was unpredicitable.
"Who knows what's going to happen this year," he said. "We're running with about $1.7 million more gifts than last year, but it's still very early in the year."
Edwards said the foundation was already looking at ways to improve their profits.
"We have been instituting several plans taking us away from public markets, which is what everyone is focused on. We'll never be out of them completely, but we're looking to reduce our exposuree in this area."
Martin, meanwhile, is hoping for federal intervention as well.
"[The country is] looking for some action on the part of Congress to stabilize the market and we all need that," he said. "We all work very hard to build the endowment and attract the contributions of the university and it's painful when we see a decline in the level of value."
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