Strength in a crisis: Cornell is well positioned to thrive today and in the future
As Cornell weathers today's economic storms, two financial resources are fundamental to its continued vitality: the university endowment and the Cornell Annual Fund. Both remain sound. The first provides a source of perpetual support, while the second is a critical source of ongoing operating funds. Together, they form a revenue stream that bolsters the work of our students and faculty.
Even in challenging economic times, the state of Cornell's endowment and annual fund offer encouragement.
Cornell's chief investment officer, James Walsh, reports that while Cornell's endowment is down with the broader market, it remains healthy. Currently, it is valued at more than $4 billion. This is about 27 percent less than in June 2008. Many of Cornell's peers have announced similar or larger losses over the same period. Taking a longer view, however, Cornell's endowment has increased by an average of 6.7 percent each year over the past five years.
"We are a long-term investor with a perpetual timeframe," Walsh said. "The endowment is structurally strong. We're looking to gain returns for the university over the next five to 10 years, and we think we're in a good position to do that."
In addition, Walsh noted that Cornell is less vulnerable to the market's vicissitudes than its peer universities because endowment returns fund only about 11 percent of the operating budget. Such schools as Harvard and Yale have counted on investment income to provide 30 percent or more of their budgets.
When investments falter, the Cornell Annual Fund becomes even more important. Gifts made to the fund are the principal means of enhancing the university's operating budget, that is, the resources Cornell needs on a day-to-day and week-to-week basis. Put into one perspective: Every $5,000 in annual fund support has roughly the same buying power in one year as $100,000 in endowment.
Our alumni, parents and friends continue to make their annual gifts at all levels, which is a real sign of support for Cornell. The annual fund currently stands at $13.1 million for fiscal year 2009. That pace is in keeping with fiscal year 2008, when the fund raised $21.5 million.
Many Cornellians share a strong belief that investing in knowledge creation and education promises to make the biggest difference in revitalizing our economy. We believe that is a major reason why more than 31,000 alumni, parents and friends have contributed to the Cornell Annual Fund in this past year and thousands continue to make gifts to sustain our endowment.
Especially during the past six months, as Cornell trustees and as co-chairs of Far Above … The Campaign for Cornell, we have been grateful for and heartened by President David Skorton's fiscal leadership, the stewardship and management skills of Cornell's staff and the continuing dedication of our alumni, parents and friends. Now, more than ever, we need to do everything in our power to provide financial aid for students, recruit and support vibrant faculty, and preserve the strength and character of Cornell.
Stephen Ashley '62, MBA '64, Campaign Co-Chair
Jan Rock Zubrow '77, Campaign Co-Chair
Robert J. Appel '53, Chairman, Discoveries that Make a Difference: The Campaign for Weill Cornell Medical College