Boston University’s endowment fund has decreased by nearly $250 million between June 1999 and June 2000. Caused by the suffering economy and stock market, this decrease is not the fault of trustees and investors.
A one-third decrease in Boston University’s endowment fund may cause some people to lose faith in the trustees responsible for handling investments. However, when the current state of the economy and the strides made throughout the past 30 years to establish a substantial endowment are considered, no one can be blamed for this problem.
There is no doubt the state of the economy had an effect on the endowment increase. Therefore, the trustees — no matter what research they made into investments — could not have prevented at least part of the decrease. These trustees have had much experience in building the endowment from nothing. Their successes show this incident is merely a snafu. Still, it should wake them up.
While no particular mistakes were made, the trustees must learn to be wiser. Continue to research investments, and make continual overall evaluations as to where money should go. It cannot hurt to take extra precautions in attempts to prevent a decrease from occurring again in the next fiscal year.
The lack of funds in the current endowment will not have a deep impact on the University, so there is no cause for concern. Nevertheless, the economy will continue to fluctuate throughout the years, and it is expected the funds will grow back. Consequently, the trustees of the BU endowment fund must be relied upon to act wisely in their investments.
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