Harvard's Endowment Loses $8 Billion

CAMBRIDGE, Mass. — Harvard officials say the university's largest-in-the-nation endowment lost about 22 percent of its value, or $8 billion, in the four months since the end of the last fiscal year.

The endowment was worth $36.9 billion as of June 30.

Harvard will have to take a "hard look at hiring, staffing levels, and compensation," university President Drew Faust and Executive Vice President Edward Forst wrote in a letter informing deans of the losses.

They say the university should plan for a 30 percent drop in endowment value by the end of next June.

Forst tells The Harvard Crimson student newspaper that the 22 percent estimate may be conservative because some university money is handled by external managers that have yet to report figures.

Comments

[humuhumunukunukuapuaa]

Fight fiercely, Harvard,
Fight, fight, fight!
Demonstrate to them our skill.
Albeit they possess the might,
Nonetheless we have the will.

How we shall celebrate our victory,
We shall invite the whole team up for tea
(how jolly!)
Hurl that spheroid down the field, and
Fight, fight, fight!

Fight fiercely, Harvard,
Fight, fight, fight!
Impress them with our prowess, do!
Oh, fellows, do not let the crimson down,
Be of stout heart and thru.

Come on, chaps, fight for Harvard's glorious name,
Won't it be peachy if we win the game?
(oh, goody!)
Let's try not to injure them, but
Fight, fight, fight!
And do fight fiercely!
Fight, fight, fight!

- Tom Lehrer

[themodernleader]

Harvard has an endowment that may soon turn it into an Oxford where professors do their own thing or pander to the powerful.
In 1971 I visited Souls College and asked the Head Master where the Universeity got its money to operate. He immediately stated that Oxford received not one penny from any taxation, that all their monies came from endowments: Much farm land and other revenue producing enterprises. He was as proud ot that fact as I was chagrined by the obvious truth that Souls College and the rest of Oxford University was an unaccountable institution that generated essentially irrelevant or previleged knowledge supporting other than democratic governance.
Unaccountable universities go hand -in-hand with perpetual endowments that permit scholars to be accountable only to their own interests or the interests of the previleged few. All philanthrophic giving to any institution of education must have strict, specific objectives that benefit the overall society. Otherwise, we will become another England with previlege and poverty, never the twain shall meet.

[mayfly0]

Yes, I remember well! The people from Oxford and Cambridge coming too my comprehensive school, too tell us we could go there if we got three A'levels that were grade A, only too relise that the elite only had too have C's occording too the newspapers. However, I also know a person that with the same qualifications, as me, who took a part time masters in immunology, at Oxford university. However they had too pass an ONC,and HNC in medical lab. sciences, and the a special examination in Blood group serology too get there.Six years too get there, when others could enter, if what we were told was correct, straight from school, with the same grades. So yes the decks were stacked!
Mind you, what do I know I was remedial occording too my school records.

[miamia]

How can you write an article about the losses without stating how they took place.
Who, what, when, where, HOW!---Come on HoffPo!

[rcozad]

And they are voted the best Business School?

[bobsmith]

Actually, you need to examine performance over long periods of time. A 22% loss is just a snapshot in time - it tells you almost nothing. If they are aggressively buying into this bear market (as I am) their portfolio will probably roar back and be better than it would have been had the market remained overpriced.

[hrhkat29]

Berkeley has a better business school...t­hats where Obama is getting his advisors from

[ivyconservative87]

As a current Harvard undergraduate from a poor family, I am insulted by the negative comments about Harvard "brats." Harvard is taking a hard look at cost cutting so that "need-blind' admissions programs may stay in place. For families with an annual income of less than $180,000, tuition is waived. The ultimate goal of the university is to attract the best and the brightest, regardless of financial need. This would be a sacrifice for any university and some others have needed to scale back similar programs for poor students. Our president, Drew Faust, is committed to keeping Harvard affordable. Think what you like about dusty stereotypes about Harvard, but at least read up on your facts first.

[ManyColored]

I always considered Harvard a very nice school to work with when I was in the Boston area. The snottiest school in the Ivy League is undoubtedly Princeton, based on my experience. The snottiest school I ever visited were the Claremont Colleges (Pitzer, etc.). They REALLY think their poop doesn't smell.

[Veritas 1]

I am sure there are a number of legacies, but in my experiences i have found Harvard to be fairly diverse (on many measures). I can't say the same for other Ivy League schools or regional private colleges that get the "dumb" rich kids.

[hrhkat29]

and still 60% of Harvards undergraduates still pay full tuition...­.elitist school still applies..

[imsosure]

Oh that's just terrible, what a shame, they teach economics there don't they?

[partyofone]

Just think of that staggering loss as a "gift" from all those Harvard MBS alums who ran Wall Street into ground.

[sunbeltvoter]

It is Harvard's own fault for hiring Harvard MBA's to run their funds instead of hiring someone with a clue as to how the economy really works. Hint: Derivitive Gambling at Casino Wall Street is GAMBLING not INVESTING.

Homer Simpson could invest the Harvard Endowment better than any Harvard Grad. Even if he spent it all on Duff Beer, at least he would get something for his money.

[TrooAmerican]

That doesnt make much sense in the context that they wrote it. Is Harvard actually running its daily operations off the Endowment's interest? or are they literally dipping into it for daily costs and payroll?

I always thought endowments were for extra projects such as building a new dorm, or a new library, or a new college of such and such, or their own supercollider or nuclear plant or something amazing.
And for that matter, again, arent they just losing "Value" of the existing stocks and investments? as opposed to actually losing the investments?
insomuch as if they just hold them at their current value, and wait 1 yr to determine whether to liquidate or not, the value could just rise based on market conditions?

[ManyColored]

As far as I know, Harvard uses a percentage of their endowments (returns) to augment their scholarship funds.

[PhilipTaylor]

University FUNDS are suffering because WALL STREET BANKSTERS took Monestrous FEES and paid themselves $100 million per year incomes.

Even Worse the HEDGE HOG managers took $500 million FEES and Incomes and one Manager received $3 Billion in a year.

All these Banksters and HOGS used ILLEGAL tools like NAKED SHORTS, 50 to 1 Leveraging, FAKE "AAA" Rated Derivatives and many more.

The MONEY is OFF-SHORE and in mansions with $10 to $100 million paintings in the 100 mile RADIUS around WALL STREET!

[peterg76]

Just close Harvard Business School. The quality of their product is a little suspect anyway.

[olephart]

If they’re so rich, why aren’t they smart?

[anywho]

OBAMA is a Harvard Business alumni. The institution is outstanding. The best in hte world. Anyone that runs it down now is just piling on and most likely jealous.

[lisakaz2]

No, he isn't. He has a law degree. You mean Boooo$h.

[sonoffestus]

Your listening to their hype. I'm not jealous, I started my own business in 89 and it's still going strong. No need to be jealous. Oh, I have a degree in History from a State college in Ma.

Though I was not a great fan of Kurt Vonnegut , I will always remember a quote of his; "You are, what you pretend to be." No doubt it's a good school, but not what it pretends to be. It also cannot be held responsible for it's graduates, which if taken as a WHOLE are average.

[hrhkat29]

I love Obama, Obama knew the best way to get to the white houe was through Harvard, they do have a staggeringly high amount of presidents who went there, but Harvard is over rated..I had a few friends who got accepted and didnt go, not because it was expensive, but because it is seen as being past its prime...it may be diverse, and it may have some poor people, but when a student goes their they change, and usually not for the better...t­hey become a Harvard person, and not an educated person. My friends went to MIT and Berkeley, its more freeing and has the quality of teachers are better...

I know its bad for me to say that about harvard considering my great uncle taught physics at Harvard and has a statue there, but that was many years ago..

[MoeJava]

Uh Oh... must have let some Republican from Wall Street manage their funds.....­...
right into their own wallet, I'm guessing.

Lock the doors - count the silverware - Wall Street is still on the rampage, only their are federally subsidized now, and not subject to any oversight.­.

[ThatOne4Me]

very funny!

[Moshe]

Heart breaking.

Can we please get the millions Americans who have now lost their jobs, pensions, life savings, and homes in the economic disaster (caused in no small part by the greed of Harvard and other Ivy league hyper-priveledged brat graduates) to pause for a moment of silence on Harvard's behalf?

And then maybe Harvard can send a delegation to Washington to ask for a bailout.

[hrhkat29]

In a private plane, and with pictures of all the former presidents who went there to show just how unelitist they are lol

[pointyheadprodigy]

So, they are just as stupid as the rest of us? That was already fairly obvious. Welcome to average town you shiny happy people. Now lets reconsider egalitarianism. It's a good thing!