Endowment Spending

The University should consider a small investment from its endowment.

On Tuesday, The Minnesota Daily reported how the University of Minnesota is handling its endowment in light of our nationâÄôs economic hardship. University officials were quoted as saying that no increases in endowment spending will result from the recent downturn. This is in response to a request from Sen. Chuck Grassley R-Iowa urging wealthy universities to dig into their multi-billion-dollar funds for student aid, saying, âÄúIf an endowment is a rainy day fund, itâÄôs pouring.âÄù University officials are right in taking a conservative approach to utilizing endowment funds, but a small investment in students is necessary amid one of worst recessions in decades. University officials argue that a conservative approach with the endowment makes the most sense. Their priorities are still focused on growing the fund and making sure it is still safe and viable for the future, as the University currently spends only 4.5 percent of the endowment funds every year. As University Chief Financial Officer Richard Pfutzenreuter stated, it is a promise to donors that their donations to the endowment âÄúwill be retained in perpetuity.âÄù There is reason to, at the very least, consider an increased investment in students. University officials have indicated that Gov. Tim PawlentyâÄôs decision to cut the UniversityâÄôs funds by $151 million signifies the stateâÄôs intentions to have students bear the burden of the financial crisis. If PawlentyâÄôs proposed cut to the University hold true, students could be seeing another round of large tuition increases like those that have plagued this institution for the last decade. A small investment from the endowment would signify to the public and students alike that this institution is not taking the possibility of tuition increases lightly. Imagine the significance of a small 1 to 3 percent investment from the $5.8 billion endowment fund to students. It would help ease studentsâÄô worries about the affordability of the University and the accessibility of college funding in the future. If circumstances were normal, there would be no need to change endowment spending. But these are not ordinary circumstances, and University officials are evidently oblivious to the fact that aid is desperately needed by students, regardless of source.