Posted on behalf of Roberta Kwok

University endowments are again in the news this week, thanks to a new survey that estimates just how hard the recession has hit. The report, issued by the National Association of College and University Business Officers, surveyed 435 institutions and found that endowments fell by an average of 22.5% from July to November 2008.

The New York Times calls it the “Worst Drop Since ’70s”, according to John S. Griswold Jr., executive director of the Commonfund Institute. “These are unprecedented numbers,” Griswold told the Times, adding later: “It’s a rolling contagion that hit us.”

U.S. News & World Report takes a somewhat perkier tone, saying that endowments have fallen by “only” about 25% in the last year and a half, compared to the US stock market plunge of more than 40%. But they also cite predictions from the credit rating agency Moody’s saying that 2009 “will be a rough year for colleges”. Donations, financial aid, and grants will probably drop, Moody’s says.

All of this bad news has provoked Harvard University alumni to write a letter to Drew Faust, the university president, arguing that hefty bonuses given to the endowment’s money managers should go to the school instead (Boston Globe). The managers each made $3.9 million to $6.4 million in the last fiscal year for managing Harvard’s gargantuan endowment, which dropped from $36.8 billion to $28.7 billion between June and October 2008.

Other universities are pondering more creative measures to come up with cash. Trustees at Brandeis University in Waltham, Massachusetts, provoked an outcry when they voted to sell the school’s art collection, which includes works by Andy Warhol and Pablo Picasso (Bloomberg). The decision is now up in the air (Boston Globe).

On a more positive note, colleges could get some help from the stimulus package, and students are still flocking to their doors (U.S. News & World Report). “We are not panicking,” says Carl E. Zylstra, president of Dordt College in Sioux Center, Iowa.