How does a loss of value to the endowment affect our operating budgets?
In fiscal year 2009, the endowment supported more than 18% of the University’s annual operating budget, compared with about 7% two decades ago. Between July 1, 2008 and June 30, 2009 the value of the endowment declined by $740 million, or more than 25%. The drop was primarily due to the economic downturn’s impact on the financial markets, however, it was also a function of the $132 million paid out in FY09 for operations and the $44 million received in new gifts to endowment. Brown’s payout policy, which determines how much of the endowment is used for operations each year, smooths the impact of a major decrease — or increase — in market value. Before the economic crisis, we were expecting that the annual payout from our endowment would be able to grow each year. Because of the loss in overall market value of the endowment, we now expect that endowment payout to support our annual budget will have to decline. We had planned on endowment payout of close to $160 million in FY14. We are n
