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The Daily Tar Heel

N.C. private schools feel decreases in endowments

By Ross Maloney

Staff Writer

North Carolina’s private colleges and universities across the board have seen steep declines in financial contributions in the last year.

All 36 private college institutions in the state have seen a decrease in those contributions, known as endowments, since 2008, said Hope Williams, president of N.C. Independent Colleges and Universities.

Because they are not funded by state tax money, private universities depend more on endowments than UNC-system schools, Williams said.

An endowment is a permanent source of income for the university. Money contributed to the university over the years gets invested and then makes returns.

“Universities are having to make strategic budget decisions,” she said. “Some cut personnel and other items within budget. At the same time, they’re trying to find additional funds and reallocate funds for financial aid.”

Duke University


Michael Schoenfeld, vice president for public affairs and government relations at Duke University, said Duke’s endowment dropped about 24 percent over the 2009 fiscal year, from $6.1 billion to $4.6 billion.

He said it’s the single largest annual drop the university has ever seen.

“It’s unique, historic, and what we hope to be a onetime occurrence,” he said.

In the last 10 years, Duke’s endowment has seen an average 10.1 percent increase each year, even with 2009 factored in.

“Spending from the endowment makes up about 15 to 17 percent of your overall budget, so if that part of your budget declines for the next couple years, you will have to look at reduction and expenses, as well as opportunities for different revenues,” Schoenfeld said.

Meredith College

Melyssa Allen, news director at Meredith College’s department of marketing, said the school experienced a 20 percent decrease in its endowment since June 2008.

Meredith typically spends 5 percent of its endowment funds on its annual budget.

But the school has a working strategy for riding out the budget cuts, she said — increasing class sizes.

“It was determined that the ideal average class size for Meredith is 20 students. Currently, our average class size is 17, so we have some flexibility in increasing class sizes without comprising the quality of the academic experience Meredith offers,” she said.

Davidson College

Stacey Schmeidel, director of college communications, said Davidson reported a 25 percent loss in endowment funds from $550 million in 2008.

The school operates on tuition, gifts and padding from the endowment.

“We knew ... people would give less gifts, the stock market would put pressure on the endowment and make students and families who pay tuition feel more constricted,” Schmeidel said.

Unlike other schools, Davidson has not laid anyone off, although they have implemented an ongoing hiring freeze, Schmeidel said.

The university has cautioned against unnecessary trips and travel, which has saved the school tens of thousands of dollars, she said. They also launched green initiatives to save money in the long term.

“We’ve done a lot of budget planning that assumes things were going to be tight for a long time to come. If it gets better, that’s great. If it doesn’t, we feel like we’re well positioned for the years ahead.”



Contact the State & National Editor at stntdesk@unc.edu.

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