University endowment hits $3.5 billion
File Photo by Joon Lee/WSN
November 11, 2014
NYU’s endowment fund has seen a return of 13.7 percent in this fiscal year according to the university’s recently released Endowment Fund Summary. Following this increase, the endowment has reached $3.5 billion.
The university’s endowment serves as a permanent source of capital. The summary states that 4 percent of the endowment fund is used as a part of the operating budget. NYU spokesman Philip Lentz said the rest is used to provide funding for university programs, financial aid and improvements to academic facilities.
“When the endowment does well, it enables the University to enhance the academic and scholarship experience it provides its students and that means greater financial aid, improved academic facilities and the hiring of world class scholars,” Lentz said.
Lentz added that the university’s low-risk approach to investments is meant to preserve the endowment fund for years to come.
“We are certainly pleased when the endowment has a good year, but we don’t manage the endowment to maximize year-to-year results,” Lentz said.
“Rather, we manage the endowment so that it can serve the University both today and for generations to come.”
The Endowment Fund Summary report pointed out that this conservative approach protects the endowment fund.
“Implementation of NYU’s investment policy strategy has resulted in less severe losses during down markets, allowing for more stable compounding, which the University has preferred given continuous spending distributions and a conservative risk tolerance,” the summary reads. “NYU’s strategy and policy choices and emphasis on risk management means that the Fund is not expected to outperform the market or long-term benchmark in short-term periods.”
Aside from investments, the summary said donor contributions are an important source of growth for the fund.
CAS junior and Student Labor Action Movement spokesperson Anne Falcon said the university should be using this money to address the needs of students and faculty.
“The NYU administration has historically prioritized their own profit-seeking agenda over the needs of their students and faculty,” Falcon said. “A reality which is continually being exemplified by such actions as the explicit rejection by NYU spokespeople for public appeals to increase financial aid or the continuing struggle to reach a contract between our graduate student TAs and the administration, whose basic demands include comprehensive health and dental care plans and measures of job security.”
The university has previously stated that they are committed to improving financial aid and reaching an agreement with the graduate student union.
“We mutually remain committed to achieving a good and fair contract that properly recognizes the contributions of our unionized employees,” NYU spokesman John Beckman told WSN for a Sept. 29 article.
A version of this article appeared in the Tuesday, Nov. 11 print edition. Email Valentina Duque Bojanini at [email protected].
Jacob White • Nov 12, 2014 at 12:28 pm
Saying that “the rest” (96%) of the endowment “is used to provide funding for university programs, financial aid, and improvements to academic facilities” cannot possibly be true. The article immediately contradicts that statement by talking about our investment strategies. So obviously a large percentage of our endowment doesn’t make it back to students but is continuously reinvested in a broken global economic system. The article failed to mention, however, the millions of dollars worth…
Daniel Greenspan • Nov 11, 2014 at 1:18 pm
PS. For comparison’s sake – NYU has ~23,000 undergraduates and a $3.5 billion endowment, whereas Cornell has ~13,000 undergraduates and a $6.2 billion endowment and Columbia has ~4,500 undergraduates and a $9.2 billion endowment. Thus, NYU has a relatively low endowment:student ratio. The good news is that the NYU endowment has grown rapidly. However, the # of undergraduates has grown tremendously too, from ~12,000 when I was an undergraduate there in the 70s. Each year more students apply to…
Daniel Greenspan • Nov 11, 2014 at 7:00 am
I don’t think that NYU uses 4% of its endowment as part of the operating budget, as stated in your article. Rather, I think that it uses about the same percentage from the returns on its endowment on its operating budget as do most schools, but this adds up to only 4% of its operating budget, which is huge. NYU is a very large private school with a lot of students and its endowment is still relatively small, compared to those of other elite private schools and in terms of endowment dollars per…