What Constitutes Prudent Spending from Private College Endowments? Evidence from Underwater Funds

Autor/in	Anderson, Drew M.
Titel	What Constitutes Prudent Spending from Private College Endowments? Evidence from Underwater Funds
Quelle	In: Education Finance and Policy, 14 (2019) 1, S.88-114 (27 Seiten)Infoseite zur Zeitschrift PDF als Volltext Verfügbarkeit
Sprache	englisch
Dokumenttyp	gedruckt; online; Zeitschriftenaufsatz
ISSN	1557-3060
DOI	10.1162/edfp_a_00239
Schlagwörter	Private Colleges; Endowment Funds; Expenditures; Investment; Retrenchment; Financial Problems; Economic Climate; State Legislation; Educational Finance + Suchen Sie Ihr Suchwort? Privathochschule; Stiftungsvermögen; Ausgaben; Investments; Geldanlage; Investiton; Wirtschaftslage; Landesrecht; Bildungsfonds
Abstract	This study examines how private colleges and universities choose to spend versus reinvest resources in endowment funds that have suffered investment losses. The analysis takes advantage of a market downturn and public policy shift, which together revealed how colleges define prudent spending. Investment losses during the financial crisis of 2008 left many endowment gift funds below their original donated values, or "underwater." Colleges in some states were legally required to cut spending from underwater funds. Other states had recently enacted the Uniform Prudent Management of Institutional Funds Act, which allows prudent spending from underwater funds. The act loosened financial constraints, and affected colleges responded by spending 22 percent more from their endowments in the fiscal year after the financial crisis. Constrained colleges did not increase spending from unrestricted parts of their endowments to offset reduced spending from underwater funds. (As Provided).
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Erfasst von	ERIC (Education Resources Information Center), Washington, DC
Update	2020/1/01