Officials at Columbia and New York University this week braced their students and staff for painful cuts in the face of endowment losses of more than 15 percent since the market starting heading south.
Columbia lost more than $1 billion in the last six months of 2008, or about 15 percent of its late-June value of $7.1 billion.
President Lee Bollinger told each of his university’s divisions to expect 8 percent less funding from the endowment in the next fiscal year.
The endowment at NYU – where staff salaries were frozen amid warnings that any further financial hits could lead to “major staff and service reductions” – dropped by 19.6 percent over the same period, from $2.5 billion to about $2 billion.
NYU is suing hedge-fund billionaire Ezra Merkin in an attempt to recover about $24 million he put in the paws of Ponzi schemer Bernard Madoff.
The losses at both institutions were still less than the 22 percent average endowment plunge at more than 400 major colleges from July through October, according to a report released this week by the National Association of College and University Business Officers.
Officials at NYU and Columbia reassured students that they were in better shape than schools that rely more heavily on their endowments to cover annual expenses.
NYU said its endowment covers 5 percent of its expenses, and Columbia said its figure was 13 percent.
“Our relatively small collective dependence on endowment means that the current market downturn hurts less than it does for some of our peers,” Columbia’s Bollinger wrote in an e-mail to the college community this week.
“But let there be no doubt, we still have to face hard choices in the months ahead.”
Harvard lost $8 billion from its endowment of more than $36 billion.