Reflecting the difficult financial environment for higher education, university endowments lost an average of 18.7 percent in the last fiscal year, the worst returns since the Great Depression, reports the New York Times. A study by the National Association of College and University Business Officers and Commonfund, a nonprofit organization that manages university investments, found that universities with endowments over $1 billion had the greatest decline, an average of 20.5 percent. Harvard, Yale, and Stanford, the wealthiest universities, all lost more than 26 percent of their endowment values. At the same time, the study found, debt rose, especially at the largest universities, and gifts declined. The 2009 losses in endowment income come on top of an average loss of 3 percent in fiscal 2008. The three-year average return, which most universities use to determine how much of their assets to spend, was negative 2.5 percent, compared with the five-year average of 2.7 percent, and the 10-year average of 4 percent. “We’ve had two bad years, so the endowment performance this year will go a long way to determine how quickly endowment spending will recover in the future,” said John S. Griswold Jr., executive director of the Commonfund Institute. “Most universities continue to spend at a healthy rate despite the large declines in their value.”

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