It was a rare academic achievement, even if it was more the work of the finance staff than the faculty of Sacred Heart University: in 2009, the Fairfield school was one of a handful nationally to receive an upgrade on its bonds from Moody”™s.
In a year that saw markets plunge and alumni giving weaken, far more often schools were the recipient of a Moody”™s downgrade on their bonds, which makes it more expensive for them to borrow funding for capital projects. That was not the case at Sacred Heart, whose vice president of finance, Michael Kinney, is an alumnus and previously held positions with Kraft Foods International and GE Capital.
In early December, the National Association of College and University Business Officers (NACUBO) and Commonfund released a preliminary report that college endowment investment returns dropped 19 percent for the fiscal year ending June 2009, in advance of a complete report scheduled to be released later in January.
Yale University, whose endowment is closely watched as a bellwether for endowment performance, said its endowment fell more than 25 percent in fiscal 2009.
Endowments are undoubtedly faring far better in the current fiscal year, however, with the Dow Jones Industrial Averages cracking the 10,000 barrier in December, up 25 percent from the close of June.
NACUBO has scheduled its annual endowment management forum for Jan. 27-29 in New York City, with speakers including Jane Mendillo, CEO of Harvard Management Co. which oversees Harvard University”™s endowment; and John Paulson, president of Paulson & Co. Inc., a New York City-based hedge fund.
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Additional preliminary survey findings from NACUBO and Commonfund indicated an average endowment spending rate of 4.3 percent in the 2009 fiscal year, roughly the same as in fiscal 2008.
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The preliminary data also indicate a median debt level among participating institutions of $43.3 million in the current fiscal year, up from $28.3 million last year.
In the Northeast, only Maine plans a larger increase in public college and university spending than Connecticut between the 2009 and 2010 fiscal years, according to a recent analysis by the University of Washington.
At last report, Maine was budgeted for a 3 percent increase, while Connecticut and New Jersey had a 1 percent bump on the books.
By comparison, New York and Massachusetts are cutting higher education spending a whopping 10 percent and 11 percent, respectively. North Dakota leads the nation with a 27 percent increase next year, while Ohio and Montana trail with cuts amounting to 20 percent.
Only in September, the University of Connecticut announced a campaign to raise $600 million in capital, the largest such fundraising drive in its history from private sources.
Separately, U.S. Sen. Chris Dodd got language written into the emerging federal health care bill authorizing $100 million for an unnamed new university hospital, hoping to benefit the University of Connecticut Health Center. And the research community as a whole has been galvanized by an additional $3 billion in grants expected from the National Science Foundation and other agencies as a result of the overall federal stimulus.
“UConn is on the cusp of becoming a premier national research university,” said UConn President Michael Hogan, at the time of the announcement. “We are involved in groundbreaking studies in stem cells, fuel cells, sustainability, and much more. As state support is projected to continue declining, private giving is more critical than ever. Right now our endowment is significantly below our peer institutions. In order to continue UConn”™s upward trajectory, we must dramatically grow our foundation of support to be competitive with peer public universities.”
