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SERVING THE BREVARD COLLEGE
Volume 74, Issue 24 COMMUNITY SINCE 1935 ^009
NOTHING TO LOSE
How Brevard’s small endowment is a benefit in trying economic times
The declining stoci( mariiet has given serious problems to schools with
large endowments, who are now facing budget cuts because their past
budgets depended so heavily on their endowment. Below is a list of local
schools and their 2008 endowments.
Duke University
Univ. of North Carolina
Wake Forest University
N.C. State University
$6.12 billion
$2.36 billion
$1.25 billion
$554.6 million
UNC-Greensboro $184 milion
Western Carolina University $35.2 million
Brevard College $22.4 million
Lees-McRae College $21.6 million
Information from National Association of College and University Business Officers
by Joseph Chilton
Editor in Chief
Brevard College is not a wealthy school.
And during the current economic climate,
that fact is its saving grace.
The College has seen its endowment
reduced by 32 percent over the last 10
months, but unlike larger, tradition-laden
schools with benevolent big money alumni,
Brevard’s endowment was so small to start
with that the recent stock market free fall
has hit the College like a jab instead of a
haymaker
“We are not a very rich institution,” said
Brevard College President Drew Van Horn.
“We’ve never been a school that attracted
wealthy people, as most of our students
have been middle class or from Appalachia.
Because of that our endowment is not very
high and we ’ re not being hit as hard as, say.
In this issue...
FEATURES:
Students study in Costa Rica 3
WLEE excursions 2
LEAP a success 3
ARTS AND LIFE:
Art Sliow results 4
WTF? 4
Review of Ryan Reynolds' latest 5
The fashion of the first lady 5
Cartoon 6
ODDS AND ENDS:
American Hero 8
Crossword 8
Berea College.”
The endowment is a pool of money that
has been donated to the College and put
into the stock market. Most of the endow
ment goes toward scholarships. According
to Brevard College pohcy, five percent of
the average earnings from the last three
years are withdrawn annually and used for
student financial aid.
According to Vice President of Finance
Deborah Hall, the Brevard College endow
ment shrank from $22.4 million to $15.3
million between May 31, 2008 and March
31, 2009. While $7.1 million in losses in
nothing to scoff at, when juxtaposed with
Princeton University’s projected $4.9 bil
lion in losses for its endowment this year,
Brevard’s losses seem minute.
At Brevard, only six percent of the operat
ing budget comes from the endowment, but
at Princeton the endowment’s losses have
spurred $88 milhon in budget cuts for next
school year.
Legislation passed in North Carolina last
month is aimed at helping schools through
these hard times. Previously, schools were
not allowed to spend below the “corpus” of
the endowment, or the amount originally
given to the school. Endowment spending
was fully rooted in the money’s gains on
Wall Street.
Now, depending on the wording of the
documents in which the money was given
to the schools, colleges are given carte
blanche to spend all their assets.
“The book value of our endowment is
$19.5 million, so we’re a little under that,”
Hall said. “But 1 would say that 10 out of 10
schools are under water right now.”
To put it simply, while large schools are
hemorrhaging from the blows the economy
has dealt them, Brevard is putting kiddie
sized Band Aids on its nicks and cuts.
But that doesn’t mean that the College
isn’t taking measures to prevent more nicks
and cuts.
The Finance and Endowment Commit
tee’s 16 members and the eight member In
vestment Subcommittee have been meeting
every month to examine the endowment’s
holders and performance.
Last fall, the committees discovered that
one holder was not performing well and
sold that holder's assets, putting them into
cash. The school is also now putting all new
gifts into cash.
Over the next three months, the Finance
and Endowment Committee will determine
how much more money to withdraw from
the stock market.
“Our goal in this economy is pretty clear,
we need to be prudent. With our policies
we ’ re not making a lot of money, but we ’ re
not losing it either,” Hall said.
“The last time the market was down it
took three years to recover, so right now
we’re trying to stabilize losses and figure
out when to go back into the market.”