Tim Yates advises on how colleges should consider asset allocation, endowment spending and development programs over both the short and long term.
Despite the fall semester looking much better than the worst-case scenarios contemplated in early summer, higher education in America continues to grapple with the enormous challenges that the COVID-19 pandemic has posed. In fact, many people believe that the pandemic has served to accelerate some of the issues that have been looming over higher education for years, including unsustainable cost structures, declining enrollment, negative demographic trends and real questions about the campus-based delivery model of learning.
With this as a backdrop, governing boards and investment committees face having to respond to the current crisis while simultaneously addressing huge strategic questions about the future of the industry and their institution. We have developed a simple three-by-three framework to assist them as they grapple with these challenges and consider the role of the endowment in helping to solve them. The framework considers asset allocation, endowment spending and development programs — in both the short term and the long term — and some of the key questions to ask about each of them.