A Message from the Acting President of Memorial University
Economic Impact on Endowment FundsDear Friends of Memorial University of Newfoundland,
The declining global economic climate is having an impact on organizations across multiple sectors, including colleges and universities. As alumni and friends of Memorial University of Newfoundland who have supported us by investing in our future, I would like to provide you with an update about the impact that this economic situation is having on your university.
Memorial is not immune to these forces, which are primarily affecting our endowment funds. The university’s endowment funds are primarily used to support scholarships and some research and not for other day-to-day operating purposes, as is the case with many other universities with much larger endowments.
The funds for our endowment come from gifts to Memorial generously donated over the decades by corporations, foundations and other friends like you. The investment strategy employed by Memorial for these funds is conservative, with an asset mix that includes less equities than fixed income investments. We have taken losses, but this conservative investment policy has resulted in those being comparatively lower than those of other universities. Many North American universities are reporting losses in the range of 20–30 per cent. Memorial’s losses for this year are closer to 15 per cent to the end of November. We anticipate being able to provide you with a more specific update on performance in the new year after we receive the report through December 31, 2008.
Our long-term objectives are to maintain a reasonable stable spending rate and to maintain an acceptable funding level so that the initial donations, adjusted for inflation, are available in perpetuity to the university. Any returns in excess of our spending rate are placed in reserve for use in years when our investments might be adversely affected by market trends.
Unfortunately, the scale of today's downward market trends has placed heavy pressure on our current reserves. We are exploring options to help make up for any shortfall, so that we can maximize funding for scholarships and bursaries. Many current and future students and researchers are depending on the support.
Memorial has been through challenging financial times before and we have never wavered from our core mission of education and research. We remain on stable financial ground, but there is no question we will have to continue to be both cautious and deliberate in our collective decision-making.
Because your university has been built on the shared vision and collaborative support of friends like you, we will continue to keep you apprised on this issue. On behalf of all of us at Memorial, allow me to express our continued appreciation for your loyal support.
Dr. H.E.A. Campbell