With enrollments down, operating costs up, federal research funds disappearing and admission and hiring policies endangered, the best way to coax a smile out of higher education administrators is to mention a single word: endowment.
The reason: dramatic investment successes for college and university endowment funds throughout the academy over the last year.
"It's a bright spot in an otherwise dismal picture," says Dr. Richard Ingram, president of the Association of Governing Boards of Colleges and Universities.
The good news includes upbeat notes on endowment fund performances among historically Black colleges and universities. Two HBCUs have endowments with assets valued at more than $100 and two more schools are closing in on the $100 million mark.
Such developments are signals that HBCUs are keeping pace with the higher education mainstream through an increasing financial sophistication.
Like their counterparts in the rest of the academy, minority money managers on campus are using analytic tools that allow them to balance the need to limit financial risk with the urge to get the biggest bang for their bucks.
"Two or three decades ago, the Black schools would invest in extremely conservative instruments, such as certificates of deposits or savings bonds. Now they are hiring professionals to handle the funds for them," says Maceo Sloan, an African-American investment banker and leading endowment fund manager for HBCUs.
Both Sloan and Ingram are referring to the findings of the 1995 National Association of College and University Business Officers (NACUBO) Endowment Survey, which showed a 15.5 percent average rate of return for endowment funds at 463 colleges and universities sampled.
Endowments, a fund of cash and other assets accumulated from private and corporate donations, are a school's investment engine and key element of its image.
At a practical level, a skillfully managed endowment yields returns that can, for instance, help keep tuition costs down. At a more lofty level, however, a healthy endowment is critical to a university's long term survival, the experts say.
