By Tim HaggertyHoya Staff Writer

The university’s endowment has dropped over $60 million in the last year, but school officials say the market fluctuations that caused the decline have not lasted long enough to threaten the university’s financial stability.

“The markets have only been truly crazy for about six months, and we’re positioned to ride that out,” said University Vice President and Treasurer Nicole Mandeville.

The decline comes as the university enters the end run of its Third Century Campaign, a billion-dollar fundraising effort largely intended to boost the school’s endowment, a goal that former University President Leo J. O’Donovan, S.J., had made a cornerstone of his tenure.

Georgetown’s endowment peaked at about $764 million last June and had fallen to about $696 million as of July 31, 2001.

That drop has not affected the school’s ability to fund its programs and it has not led to any changes in the school’s investment strategy, Mandeville said.

“We know the markets will be volatile from time to time and we’ve seen the vagaries of the market recently,” andeville said. “It doesn’t bother me that [the endowment’s overall value] is down. The markets have been down.”

With long-term investments in a variety of different markets, the university aims to minimize the effects of economic slumps on the endowment.

The earnings from the smaller investments that make up the endowment are used to support operating budgets, financial aid packages and salaries. Some of that payout is reinvested to increase, or at least keep level, the endowment’s value over time.

How the payout is spent depends on the wishes of individual donors. Generally, when donors give gifts, those gifts are invested and whatever earnings are generated are allocated as the donor intended.

Mandeville said the fund’s payout formula is based on the average value of the endowment over five years, which means that the one bad year would not cause a sharp drop in school funding. andeville said the recent years of economic strength will help balance out this year’s decline.

She said the school is also researching ways to further diversify its investments, such as investing in hedge funds and real estate.

Damon Manetta, the assistant manager for public relations at the National Association of College and University Business Officers, said endowments at schools across the country saw decreased growth rates last year, but none of the schools have been forced to cut spending.

“If an endowment goes down one year, it won’t affect that year’s spending,” Manetta said. “Typically, a school will not take a hit after one bad year.”

At Georgetown, the Third Century Campaign rose out of concerns that the school’s endowment was dramatically lower than its academic peers. Currently, the endowment is the 68th largest among the nation’s colleges and universities, according to the most recent ranking from the NACUBO.

Harvard leads all institutions with an endowment valued at over $18 billion.

When O’Donovan initiated the first phase of the campaign in 1995, the goal was $500 million. That goal was later increased to $750 million and then $1 billion as donations exceeded university officials’ expectations.

With about $713 million raised to date, the campaign is about three-quarters of the way to the goal it hopes to reach by its conclusion on June 30, 2003.

University President Jack J. DeGioia said earlier this week that the market’s decline has not hurt donations. He said he hopes to raise $150 million this academic year.

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