MSU’s endowments are up this year from the decrease in value in 2009, and with all the economic tragedies we’ve heard this year, it’s nice to hear some good news for a change.
MSU’s endowment fund increased in value by $90 million for 2010 after an 18.3 percent decrease last year. At $1.1 billion this year, MSU might have some spending room, according to William Jarvis, the managing director and head of research for the Commonfund Institute, a nonprofit investment firm for colleges and universities.
“This is a good year,” Jarvis said. “The numbers represent a healing process. That means some things that had been cut from budgets might be able to be restored.”
While we appreciate the sentiment, perhaps MSU should wait a little longer before deciding to restore things to the budget. It’s not that we don’t want whatever would be restored back, but that perhaps it was cut for a reason.
That is to say, it was nonessential. It would be prudent to wait a little longer — perhaps after two years of growth — to restore services or programs.
With all the obstacles the state of Michigan has gone through recently, MSU did have a good year.
No one wants to downplay that achievement, but instead of immediately spending, save something for a rainy day. It’s a positive atmosphere around here when people have majors and colleges to focus on and classes to attend.
MSU Trustee Colleen McNamara has said the future of funding for MSU will depend on endowments.
That change is necessitated by lack of funding from the state. In other words, it will be a private college model. We don’t know what that means for things such as tuition, but we hope the money goes toward making college more affordable for students.
The news that the endowment is increasing bodes very well for a university that has taken steps to make sure it has funds coming in from a variety of private sources.
It also means that steps such as hiring Robert Groves, vice president for University Advancement, are the right way to go.
For reference, Groves came to MSU from the University of Michigan where he ran the daily operations of the Michigan Difference, a $3.1 billion fundraising campaign.
If the defunding of higher education continues to be the norm, students, staff and faculty should pay close attention to how the endowment performs. A study published in 2003 titled “Do College Endowments Matter? The Case of Education Spending,” concluded,
“Institutions with higher endowments have the ability to pay higher salaries and offer more educational options for their students … since the income from the endowment can be used to fund a part of the operating budget.”
That doesn’t sound so bad. But getting there will take patience and a clear vision.
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