Why Yeshiva Is Only University Out of 92 With $1 Billion Endowment To Lose Value
Ninety-two universities in North America have endowments of more than $1 billion. Yeshiva University’s was the only one that shrank in value last year.
Y.U.’s endowment fell $90 million, from $1.18 billion to $1.09 billion, according to an annual survey by Commonfund and the National Association of College and University Business Officers.
During the same period, the average endowment in North America grew by 15%, according to the survey, which was released at the end of January.
Indeed, of the 852 North American schools surveyed, Y.U.’s was one of just 11 that decreased in 2014.
The figures were revealed as Y.U. announced a deal to transfer the financial responsibility of its money-losing medical school, the Albert Einstein College of Medicine, to Montefiore Health System.
Y.U.’s president Richard Joel said that the deal, once finalized, will help Y.U. stabilize its finances within the next three years.
A Y.U. spokesman said the decline in Y.U.’s endowment was caused by the university transferring funds out of its long-term investment pool.
In an emailed statement, the spokesman said Y.U.’s “long-term investment pool realized double-digit gains in fiscal year 2014 and its endowment remains strong.”
Y.U. has reported operating deficits of up to $100 million in recent years.
The university has cut costs and sold hundreds of millions of dollars’ worth of real estate as it struggles to cope with a crushing fiscal crisis.
Joel has blamed the fiscal turmoil at the university on an antiquated financial management system — which was recently upgraded — and on current and former staff members who, Joel says, misled him about the university’s finances.
A Forward analysis of the university’s endowment shows that since Joel took over, Y.U.’s endowment has performed poorly in comparison with endowments at comparable institutions.
No two universities are the same, so comparisons are imprecise.
With the help of a researcher at the National Center for Education Statistics, the Forward identified six universities with characteristics similar to Y.U. — private, not-for-profit, four-year universities with high research activity and a student body size similar to Y.U.’s.
Among those schools, Princeton, Dartmouth, Brown and Brandeis universities more than doubled their endowments between 2003 and 2014. Rice University’s endowment grew by 88%.
One other school, Rensselaer Polytechnic Institute, which has struggled financially in recent years, saw its endowment grow by just 29%.
Since Joel took over Y.U. in 2003, Y.U.’s endowment has grown by just 20% overall.