In a year when university endowments dropped nationwide, GW fared better than most schools with similar sized portfolios. GW’s 3.3 percent loss translates to a loss of about $24.6 million in investments, which officials say will not affect operations.

From July 2000 to June 2001, GW gained ground on universities it competes with for applicants and fundraising dollars. The University’s current $713 million endowment is now larger than Georgetown University’s, which lost 8 percent of its endowment, and Boston University’s, the biggest loser percentage-wise of 610 universities studied by the National Association of College and University Business Offices. According to the study reported in the Chronicle of Higher Education, BU lost a third of its endowment.

GW’s large stake in real estate is one possible reason GW did better than most schools with at least $500,000. Fifteen percent of GW’s endowment is invested in real estate, compared to a national average of 2.5 percent. Forty-five percent is invested in stocks, 5 percent less than the national average.

GW’s endowment drop will not impact students because the University does not draw significant operational funds from it, said Catherine Lynch, GW vice president for treasury management.

The University does contribute a portion of its earnings on investments to student life, Robert Chernak, vice president of Student and Academic Support Services, said in an earlier interview. That equates to about $2,500 a student in addition to tuition, Chernak said, using rough estimates.

Lynch said the endowment lost market value because GW spent more than it earned. The University spent its standard 5 percent on scholarships and student activities, but only received a 1.7 percent return on investments, equating to a 3.3 percent loss.

“What matters is long-term performance,” Lynch said. “We don’t have an endowment just to have it; we have it to support scholarships and the University.”

Lynch said that some universities lost money because they invested in venture capital.

“Those university that had large commitments to venture capital, that we do not have, had to take write-downs,” she said. “I think that there is no question that some of the large and successful universities had problems with that this year.”

The giant among university endowments, Harvard University, lost 4.7 percent its endowment, or $893 million. That is more than GW’s total endowment.

Northwestern University, whose $3.26 billion endowment is the 15th largest in the country, lost the same portion as GW. Emory had the fifth-largest loss of universities that have at least $500,000, losing 14.2 percent of its endowment. New York University’s endowment jumped 8.5 percent to $1.1 billion.

Although BU’s endowment lost 27 percent of its value, the university averaged an 18 percent return in the last 10 years. University spokesman Colin Riley said this year’s hit will not BU operations because the university “smooths” its return over five years.

This year’s decline will not impact those funds, Riley said. He explained that about 5 percent or less of the average of returns from the last five years is used for scholarships, laboratories and professor salaries. This usually amounts to less than $10 million in a normal period of returns in BU’s nearly $1.3 billion operating budget, Riley said.

“Essentially (the contribution to the operating budget from the endowment return) is very consistent, because the fluctuation in portfolio performance will be smoothed over a five-year period,” he said. “We expect that stability will return.”

He said the rest of the return goes toward the endowment, which is now worth $665 million after dropping from $913 million.

While Riley declined to disclose the breakdown of BU’s endowment investments, he said a “volatile period” hurt the portfolio’s return. He said BU has a “diversified portfolio” of investments, including domestic and international stocks.

At GW, the Board of Trustees makes long-term financial planning decisions and hires consultants and financial advisers. A team of investors executes the specific trades.

The office of Treasury Management oversees the investors and reports back to the Board of Trustees.
Lynch also pointed out that GW had no investments in Enron.

-Kate Stepan contributed to this report.