The Brown & White

A university's endowment can be considered its lifeline. Among other things, it supports scholarships, faculty chairs, professorships, student loans, fellowships, research support, building maintenance, library support and academic departmental support.

But after Gast reported on Nov. 3 in a faculty meeting that the endowment dropped from $1.09 billion in June to $888 million in October, it appears that lifeline has at least partially frayed.

Lehigh isn't alone in its financial woes. Other top schools, such as Harvard, Brown and Cornell, are also feeling the financial strain, according to reports by the Associated Press.

All have had to enforce spending freezes to halt expansion and building plans. Dartmouth College is planning to cut spending after it suffered a $220 million loss to its endowment because of the poor performance of its Wall Street investments, according to the article.

Dina Silver Pokedoff, director of university marketing and communications, said Lehigh's endowment, like those at other schools, is feeling the effects of the recent economic downturn but is still financially strong.

"Lehigh is well-positioned to navigate these challenges," Pokedoff said. "Further diversification of our portfolio has allowed us to better weather this most recent downturn and we are performing above our benchmarks."

Pokedoff said despite the current economic situation, Lehigh's long-term approach will remain the same.

"At Lehigh, we are prudent stewards and manage the endowment as a perpetual fund," Pokedoff said. "We are committed to striking a balance between sustaining the educational mission of the university and preserving the endowment principal in real terms for future generations."

Part of the endowment also serves to support financial aid for students but Financial Aid Director Linda Bell said she does not think students should worry about their financial aid awards being reduced or cut.

"We don't expect that the amount we have to spend on financial aid will decrease," Bell said.

Bell said there will not be as much focus on creating new programs to increase financial assistance, but said the programs already in place are stable and will continue to give students the same amount of financial aid.

As an optimistic example, Bell pointed out that Lehigh faced a similar financial situation in the late 1980s, but Lehigh did not suffer as much as some other schools.

"We benefit from a sound conservative budgeting system, which allows for consistent spending on vital programs like financial aid," Bell said.

Joe Kender, vice president of advancement, said even though the economy is weak and the endowment has dropped, when it comes to alumni giving back, Lehigh has been fortunate.

Kender said when the effects of the current economic crisis were first felt, his office immediately took steps to look at the historical trends of philanthropic giving.

"Luckily for us, philanthropic giving does not necessarily coincide with the trends of the free market economy," Kender said. "We are very lucky here at Lehigh, because participation in giving back is very strong."

Kender said while giving is stable now, it is impossible to predict whether it will remain that way given that the current situation that is much different than in the past.

"I would not be surprised if giving dropped during these rough financial times," Kender said.

Kender said it is important to make students and alumni fully aware of how crucial giving back to the university is.

"We want to make a case for them to support us when they graduate," Kender said. "We think we make a great case in presenting to them a Lehigh education."

Robert Wolfenden, assistant vice president of alumni relations, said people aren't giving as much during these tough economic times, but said there is still no problem with giving.

"Our percentage of giving is still up," Wolfenden said. "We just have to recognize that everyone is going to be affected by this."

Wolfenden noted initiatives that encourage giving from alumni and students.

"The little brown box" is one such initiative which is an orientation gift given to every freshman to educate them about Lehigh's history and the important role philanthropic giving has played in the development of the university, Wolfenden said.

"Philanthropy has always been a huge part of Lehigh tradition and custom," Wolfenden said. "If we had to rely on tuition costs alone, Lehigh would have to close its doors."

Another initiative is the "Lehigh Liners" program, which fosters interaction between students and alumni by having students get together twice a week to call alumni and encourage them to give back, Wolfenden said.

Wolfenden said there is a new program in the works for young alumni called the "Because" campaign. In this program, young alumni will write for a Web site and list the reasons that they give back to Lehigh.

"What people don't understand is that it doesn't matter how much you give, but that you just routinely give," Wolfenden said.

News of the endowment's recent losses sparked mixed reactions from Lehigh students.

Conor Murphy, '12, sees the losses as a predictable result, but is not too worried about the future of the endowment.

"Lehigh has always been known for its endowment and obviously now it's something to worry about," Murphy said. "I think it's going to pan out in the near future."

Murphy said he thinks alumni giving is going to decline in the near future because people are going to focus more on providing for themselves and less on giving their money away to others.

"People not giving back as much might mean tougher times for Lehigh students but that's just too bad," Murphy said. "That's reality."

Kevin Donovan, '12, is a lot less optimistic about what the endowment drop might indicate.

"I'm not really optimistic at all," Donovan said. "I don't think this is a good sign considering the rough economic times we're heading into."