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University endowments decline

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Sunday, February 01, 2009

STATEWIDE —The endowments at the state’s three largest universities have suffered along with the rest of the economy. While that revenue is not a significant portion of their budgets, it’s still a stinger.

Oregon State University’s endowment was $390 million on Sept. 30, 2007, and dropped to $334 million as of September 2008. Steve Schauble, chief financial officer for the OSU Foundation, estimates the fund will be below $300 million when current figures are reported.

“October was the worst investment period in my lifetime,” says Schauble.

Portland State University’s endowment was about $38 million in January 2008 and by Nov. 31, 2008, it was down to $26 million. “The upside of it is that our endowment is not very large,” says PSU President Wim Wievel with a bit of gallows humor. “The advantage of being poor is that you can’t lose very much.”

PSU’s endowment has a different problem than OSU and UO. “Because our foundation has recent gifts, most of our endowment accounts are underwater,” says Wievel.

At the University of Oregon, the value of its endowment was $445 million at the end of 2007. At the end of 2008, it had dropped to $365 million. Jay Namyet, chief investment officer for the UO Foundation, says that because of how the universities average their endowment payout over three years, the downturn in revenue won’t be felt immediately.

“Our payouts for 2009-2010 will be fairly equivalent to what we are currently paying out,” he says. The pain will be felt the following fiscal year if by the end of this year the economy and markets — and thus the endowment funds — are still down.

While that’s a waiting game, what’s reality right now is how declining fortunes have hit the donor base. “Outright cash [gifts are] rare now,” says Schauble. “Now they are more in the planned-gift area.”  


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