Indiana University’s $1.2 billion endowment ranks as the 11th-largest among public institutions, according to a report released Monday.
But as IU administrators continue to trim more than $60 million from the school’s budget due to state cuts, the endowment is nearly powerless to address the deficit.
This month, IU administration officials must decide how the school will find $60 million in budget cuts over the next two years. IU Foundation President Gene Tempel says although the school’s endowment is robust at $1.2 billion, the Foundation’s hands are tied.
“There’s some perception that we should just pay out our endowments when the university has these issues,” Tempel said. “And we simply cannot do that. We all accept gifts that are restricted by the donor in one way or another and that’s always been the case.”
The Foundation uses its hundreds of millions of dollars in very specific ways, such as funding faculty research, endowing department chairs and paying for student scholarships.
Tempel says altering the purpose of specific funds betrays the trust of donors and would prompt internal and external investigations. He attributes much of the endowment’s recent success to the university’s $1.1 billion “Matching the Promise” student scholarship campaign, which is near completion.
But he says the IU endowment, like that of most other schools, suffered from the global economic downturn.
“Our endowment dropped 23 percent for the last fiscal year. We were pleased about that because we managed to do better than a lot of other institutions and the [Standard and Poor’s 500],” Tempel said. “But we still had a decline. Those things have an impact in the end to the amount of money the foundation is able to give to the university.”
Purdue University’s endowment ranks 9th overall in the same survey, with an estimated value of endowment of $1.4 billion.