After recording strong annual returns, Harvard’s endowment plans to distribute more money in 2022, increasing its spending to 2.5 percent. However, other universities are unlikely to be doing the same. According to SEI’s most recent Nonprofit Investment Survey results, many schools indicated that the pandemic had no effect on their spending and that their revenues were only down slightly.
Reflecting on the survey results, MJ Bobyock, Director of Nonprofit Advice, said that the number of those effected was smaller than we anticipated. She noted that federal aid programs like the Paycheck Protection Program provided a stopgap for money lost on students staying off-campus and other lost revenue sources. Some universities tapped other sources of liquidity like existing lines of credit or loans to cover short-term costs.
“Endowments are meant to last in perpetuity, not meant to be liquidity Band-Aids,” Bobyock said. “There are other avenues that universities have to access liquidity.”
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