"The good news is, we turned the corner," said John Griswold, executive director of Commonfund Institute, a research center associated with nonprofit fund manager Commonfund. "The bad news is, it's not enough to cover the increases in costs and the spending that is normally taken out of the endowment."
The better performers in 2003 included the University of South Carolina system, which earned more than 5 percent on its investments and saw its endowment grow 6.8 percent to $312.5 million.
But overall, the wealthiest schools fared best.
The 39 schools with assets exceeding $1 billion earned 4.1 percent on average, while schools with assets between $51 million and $1 billion earned between 2 percent and 3 percent on average, according to that national association's survey of 723 schools. The smallest endowments earned 3.5 percent on average.
Schools depend on their endowments for as much as a third of their budgets. Most schools spend about 5 percent of their endowment per year, requiring them to replenish at least that much through the markets and donations simply to stay even.
Harvard, the world's wealthiest university, saw its endowment grow 9.8 percent to $18.8 billion. In September, Harvard disclosed that its investments earned 12.5 percent.
Because endowments also are affected by withdrawals and contributions, they do not necessarily grow at the same rate as the investment performance.
