How has Swarthmore’s endowment been affected by the financial crisis?
Welsh: We’ve seen the largest downturn in financial markets since World War II, so the impact on Swarthmore’s investments, like those of every one of our peers, has been significant. On June 30, 2008—the end of our last fiscal year—our endowment had a market value of $1.4 billion. Although the value fluctuates daily, we estimate the overall decline from June to December will be around 30 percent, or about $400 million. This estimate takes into account an allowance for write-downs of some of our private investments. We will not know the exact value of these write-downs until early 2009. Has the value of Swarthmore’s endowment followed market indices such as the S&P 500? In downturns, we typically perform better than the indices, and this market decline has been no exception. Although our equity investments have declined, our 15 percent allocation to U.S. Treasury bonds has preserved value in the endowment. Was Swarthmore prepared for such a decline? No one was prepared for the magnitude
