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

[08POL]

Now if they'd only been charitable and given a percentage to me it would not all be ..lost!

[GetoffMylawn]

This whole society and country business is just too darn expensive.
Shut it down and lets all go native.

[SCG]

A victim of their own product.

[slaxx]

good one.

[tailgateshirts]

yea... def all the ivy's that created these "financial instruments"

I dont hate them though, they were smart as hell just didnt look at the downside.

[inluvwkeitholbermann]

join the club.....we're all losing money

[RJII]

i thought i'd be the only one kinda lchuckeling on the inside. If it weren't for Obama, I'd be lol.

Remember when everyone thought the economic downturn was just for the poorer uneducated who shouldn't have got homes-- "NOT everyone should have a home", they'd say. I knew the Bush mess would turn up in everyone's smug face- even the elite.

Empty prestige doesn't matter when the bills aren't paid. I bet Gandhi knew that. lol.

[RichManPoorMan2009]

NO Problem............tomorrow between the hours of 8 am and 10 am all currency coming off the printing press goes to Harvard........................

Next???

[RJII]

but of course. their graduates are the a- holes snatching the treasury for 8 years.

[Tipotter]

Who cares...Harvard Shmarvard.

Now, the University of Michigan on the other hand....

[SammyD]

and this is our best and brightest? sad. Who would send theit children to such a stupid institution? Wonder if they ever heard of the concept "lead by example"?

[BabsfromKansas]

I am proud to say my daughter got her MBA from there and my son-in-law his jd. They both are product of public schools from K-16. Don't knock it, Sammy!

[sacrebleu]

Well, fiddlesticks. I was going to make a snotty comment about Dubya getting his MBA there but now you've spoiled everything for me just because I don't want to hurt your feelings.

[Fabini]

Sammy, that's a little harsh. What we are being told is that their endowment (i.e. long term saving which is invested) went down. Everyone's did. Harvard is just the largest college player.

But, no need to cry for them.

[mrblifil]

The size of the endowment was obscene for the kind of institution they are. There was talk at one point that they might stop charging tuition at all. Guess that's a pipe dream now, since they are running to the newspapers, crying poor in the face of paper losses.

[Fabini]

FYI - Over the past twenty years, Ivy League graduates working in the financial industry were the biggest sector of donors giving to their alma maters.

[doyle005]

Are they the same dinks that caused the melt down on Wall Street?

[Fabini]

Each and every one of them, yes. As the financial bubble grew, their bonuses grew, and their giving grew (it's tax deductible). The Ivy League coffers grew & grew. Yep, same people.

[watchandwait]

...because so many of them were promised jobs on Wall Street by virtue of the fact that they went to an Ivy League school..."You went to Harvard, right? Class of 2005? Economics degree, right? Excellent. I loved it there - even though I spent a lot of time partying instead of studying - haha! You too? Ha! You'll fit right in! Anyway, I'm sure you'll find the atmosphere here at Goldman Sachs to your liking. We are prepared to offer you a compensation package of $282,000, plus stock options, benefits, parking, and perks - including a Mercedes the company will lease for your personal use. Stick with us, kid - you'll be a multimillionaire before you're 28." "Thanks, sir...I look forward to it!"

[Fabini]

You didn't need an economics degree during the boom years, an art history major who did one term internship at a financial company qualified to get in.

[sophieozz]

Does that include the signing bonus?

[doyle005]

Two words...BAIL OUT!!!

[ScandalousCandice7]

As someone who lives next to Harvard, maybe they should stop trying to buy everything in Cambridge and focus more on academia. The types of people who walk around here and boast that they go to Havard isn't very impressive. Yes you get some real geniuses out of that school, but not enough to make up for the price of that school.

[mrblifil]

Wait until they sell all their real estate holdings to the Chinese. Then Cambridge will be really sorry.

[NYCIC]

Perhaps they should redeem their investments from their current hedge fund of choice and stuff that cash inside one of the many statues which dot the campus lawn until this mess settles down.

[dthom403]

How could this happen. I am soo concerned. Seriously, how does Harvard lose money? They fill to capacity every year. They charge 50k a year for tuition. How do they lose 8 billion dollars?

[Fabini]

The same way you and I do if we have investments in stocks, bonds, and precious metals.

[ScandalousCandice7]

They lose it by trying to buy everything around them. The price of real estate in the historic parts of Cambridge isn't cheap. Also paying for overrated professors.

[doyle005]

Like people, Harvard has investments. There investments did very poorly, kinda like my retirement fund. It has lost 32% of its value since May, or $115,000. But when you start with close to $37 billion, the lose sounds worse then it is. I wish my retirement had only lost 22%.

[Fabini]

Of all the areas in our nation impacted by the economic downturn, I am least sympathetic to Ivy League colleges. How much of that endowment were they thinking of spending in the next 1, 3, or five years. The answer is none. They were basing their endowment expenditures on investment income from the endowments. How much were they going to lower the student to teacher ratio in the future? Again none.

The Ivy League has a poor track record in benefiting students and teachers over the last twenty years. Buildings and administration, now that's a different story. Don't cry for the Ivy League.

[Pippilangstrumpf]

You are so right about this.

My son is going to college in the fall and he did not apply to any Ivy League or big name, uber-expensive schools.

There is no way that we're going to pay that tuition, especially in the first two years, when you're not even being taught my professors. Lower level students get taught by TA's. Why would anyone want to fork over that kind of cash to have their kids be taught by a freaking Teacher's Assistant?????

[sayitloud]

The term "teacher's assistant" is misleading. If Harvard is like so many other universities, the TAs are graduate students who plan and deliver the teaching from A to Z. They're usually no one's "assistant". Because the professors are concerned about the next article or book they have to get published, the TAs bear the weight of teaching undergrads. As grad students, TAs are usually well-versed in the subject areas they're teaching and can even be closer to the subject (i.e., have a better familiarity with the most up & coming ideas) than professors. Professors can get set in their ways, having had to make and keep a name by carving out a niche for themselves. Undergrads can also benefit from the relative youth and energy of TAs and their genuine interest in imparting knowledge.

[Moarku]

I wonder how many people responsible for the financial crisis got degrees from Harvard.

Not saying there's an actual cause and effect, but there would seem to be a certain symmetry if their own grads caused their current problems.

[PrincessAnnie]

"I wonder how many people responsible for the financial crisis got degrees from Harvard."

I can name one right off the bat...our very own President Bush has an MBA from Harvard. A lot of good that did.

Our President-Elect did go to Harvard Law School...let's hope that end of campus turns out a better President.