Yeshiva University will cede almost half of its $1 billion endowment to the Albert Einstein School of Medicine, as the medical college — which was formerly under its wing — becomes part of a separate, newly formed joint venture with Montefiore Health System.
The scope of Y.U.’s transfer of funds to the new venture—a total of $465 million—is disclosed in financial documents the school released last month and revealed here for the first time.
“These assets will no longer be Y.U.’s, said one faculty member, who spoke on condition of anonymity because of the sensitivity of the situation. “They will be transferred to Einstein—and that’s a big chunk.”
A spokesman for the university confirmed the figure but emphasized that the money in question had originally been designated for the medical school and was not taken from funds meant for the university’s other schools or departments.
Einstein, a celebrated school in the larger Y.U. system, has been losing tens of millions of dollars annually. And Y.U., which is facing its worst financial crisis in recent memory, isolated the Bronx medical school as being largely responsible for the its financial woes, including large budget deficits and degraded credit status by bond rating agencies.
Consultants said that Einstein accounted for about two-thirds of the university’s annual operating deficits when Y.U. reached the agreement with Montefiore, under which the latter will assume financial and operational responsibility for the medical school.
Y.U.’s president, Richard Joel hailed the agreement with Montefiore as “historic” when it was reached in 2014. The university, he said, was “taking a powerful and important step towards building a financially sustainable Yeshiva University.”
In September, Y.U. officially relinquished financial and operational responsibility of New Einstein, as the joint venture is called, to Montefiore, though it retained its role as the degree-granting institution for the medical school’s graduates. Y.U. is a minority shareholder with 49% in this new, separate corporate entity controlled by Montefiore, which holds 51% of the shares. “Einstein’s own accreditation is expected to be approved in 2018,” a statement from the medical school’s dean read.
The transfer of almost half of the historic university’s endowment did not surprise the faculty member who spoke on condition of anonymity. “The university is bleeding,” he said.
Sam Kestenbaum is a contributing editor and former staff writer for the Forward. Before this, he worked for The New York Times and newsrooms in Sana, Ramallah and Beijing. Contact him at email@example.com and follow him on Twitter at @skestenbaum and on Instagram at @skestenbaum.