From the Register-Mail:
A national report released this week revealed that college endowment funds across the country have taken heavy hits from the volatile stock market….
Locally, though investments have taken a fairly significant tumble, institutions aren’t faring as poorly due to the way they typically spend endowment funds.
Both Knox College and Monmouth College factor relatively small amounts of endowment funds into their annual budgets, about 5 percent and 10 percent, respectively. The schools also use a 12-quarter trailing average when determining the amount of endowment money to spend.
“It averages out the ups and the downs” in the market, said Knox President Roger Taylor. Colleges take the average value of the endowments for the previous 12 quarters, average those numbers and then use it as a baseline for how much money to spend in the next fiscal year.
Taylor said Knox’s endowment has fallen about 20 percent this fiscal year, from $71.4 million on June 30 to about $56 million. According to the NACUBO’s report, the college’s endowment fell 10.1 percent in the 2008 fiscal year, from $79.4 million to $71.4 million.
That 20 percent decline, “I suspect, compared to a lot of folks’ retirement 410(k)s, is pretty good,” Taylor said.