Chapter 1: University Endowments in Financial Crisis
From the Book: The Refractive Thinker®: Vol. II: Research Methodology: 3rd edition


Summary

In late 2008 and early 2009, a financial crisis spread around the world. Lack of confidence in the capital and credit markets resulted in a worldwide free fall, and the United States experienced large monetary losses in the ensuing dramatic capital market decline. The consequences of the economic downturn to American higher education were substantial. According to the National Association of College and University Business Officers-Commonfund Study of Endowments (NCSE), U.S. institutions lost on average 18.7% in the fiscal year ending June 30, 2009 (NCSE, 2011a). This single year negated years of endowment prosperity. This chapter presents a summation of Dr. Ellen Beattie’s dissertation research. A quantitative correlation study design employing Spearman’s rank-order correlation and multiple regression analysis measured the relationship between twelve institutional and endowment characteristics and endowment investment performance. Findings indicated a large variance in endowment investment performance among the 724 institutions and while correlation analysis generated statistically significant correlations, the Spearman correlation coefficients (rs) were extremely low. This chapter will help readers to understand how the institutional and endowment characteristics relate to investment growth among our nation’s institutions of higher education. This chapter will guide students to understand how quantitative correlation research can be applied to solve the complex challenges facing higher education.
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