Thursday, March 26, 2009

Endowment suffers significant financial setback

The effects of the economic downturn have spread from Wall Street to North Road.
The investment pool at Marist has declined 23 percent since the end of June, but administration is confident the college will continue to thrive.
Vice President for Business Affairs and Chief Financial Officer Jeanne Plecenik said Marist's investment pool, which includes the endowment and other reserves set aside over the years, is at $90 million, a sharp decline from $117 million in June 2008.
"That is a huge loss obviously, but not as big as some other schools or the market in general," Plecenik said. "It is still obviously very painful."
Most colleges are dealing with economic problems. One recently released survey on 791 American public and private colleges reported that endowments fell 3 percent in the fiscal year ending June 30, and a smaller group estimated a 23 percent drop in the first five months of fiscal year 2009, which began in July.
At Marist, pool funds are invested and five percent of the interest earned each year is used to maintain and improve the campus. Plecenik said schools with endowments in the billions have been hit harder, since they rely on those funds for operation.
Recently, less than five miles away, Vassar College had to eliminate seven staff positions and decided not to renew 16 adjunct faculty contracts that end June 30. Marist has not made any faculty or staff cuts.
Executive Vice President Roy Merolli said the difference between Marist and schools like Harvard, Yale or Vassar is that Marist does not use its endowment to support any operating expenses.
"Marist operates primarily on tuition and fees generated by enrollment," Merolli said. "The more you take from your endowment for the operating budget, the more this is going to hurt you."
Merolli said the goal of administration has been to maintain the same academic and student services despite the economic situation. He said he believes Marist offers a good value for the tuition it charges and that the college tries to keep its price reasonable for a private college. One concern Merolli has is that some students may choose to attend public schools, but he said spring enrollment is strong and fall 2009 applications are up from 2008.
"With the economy being the way it is and with people losing their jobs," Merolli said, "Will families be able to afford a private college education?"

Originally appeared 3/26/2009 in The Circle

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