University Budget Issues

UM officials taking pay cuts amid projections of up to $1B in losses from COVID-19

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They have 11 Billion in endowments, I have a feeling they will get through this rough patch better than most of the folks out there.


Question regarding endowments. Are the unirversities allowed to do what they please with this money or is it designated for a specific purpose(s) and the university can’t touch it for anything else?

This was Schlissel emailed yesterday:

“Some have suggested that we mitigate the consequences of our financial challenges by drawing down our endowment. Like many personal investments, our university endowment has suffered large but uncertain losses. Nonetheless, it continues to be an essential resource for funding student scholarships on our three campuses, supporting critical medical research and other costs that ensure success of programs across the university. It provides the support necessary to ensure we can deliver on our longstanding commitment as a public university to keep quality education affordable, and hundreds of units rely on the stability it provides through ongoing funding streams. Much of our endowment supports funds that can be used only for a specific purpose. We are committed to honoring these agreements with our donors and to maintaining the endowment’s ability to support scholarships, important programs and the long-term stability of the university.“


Schlissel as clear as mud… the market is down from its peak about 20%, lets assume they took that much of a hit to the endowment nest egg which would mean something around 9 Billion +/-.

I do not wish ill will on anyone, company or place of learning but the school is probably in far better financial shape than most it employs or educates.

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Thank you.

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I thought he was pretty clear in his answer to the question of; “might the U tap the endowment money in a situation like this?”

“First, the endowment funds are not as substantial as they once were. Second, even if we were tempted to do so, we would be limited by the expectations of the donors.”

Conclusion: Don’t expect the U to substantially rely on endowment funds, it has to consider alternative means to address the financial challenges.


We just see it differently is all.

Edit, but agree they are not going to use them.

Not really - an “endowment” is not just a pot of discretionary money. The vast majority is given for specific uses designated by the donor, and obviously a good portion of it is illiquid. Also, many are held by covenants that are designed to have the endowment last in perpetuity. We can debate whether that’s the way it “should be”, but it absolutely is the way it is.


Thanks, I wanted to hop on and say this but you did it much better. Much of the point of an endowment is to earn interest which can be used, much of that value is untouchable per donation agreements.

Right - like a ton has been written about Harvard - because their endowment is massive ($40 billion+) and they ALSO just got a PPP loan of a few million while laying off their food service people, and people screamed (I’m not saying they were wrong to).

The reality is that the endowment is wrapped up in things like ownership of companies (Harvard owns like 70% of the US paper manufacturing industry!) and other stuff that can’t easily be converted into currency for bills.

We can debate whether that should be the case or not (I definitely have opinions) - but that is the case. The full dollar figures are just not accessible for a variety of reasons.


How is that unclear? He poses the question of whether they can access endowment money and answers it.

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Michigan’s Warde Manuel: ‘Impossible’ to play sports without students on campus

Thought Michigan had already announced kids will be back on campus?

They have not done that no. In fact, faculty are being told to prepare courses to be online. It’s a very real possibility.

Per Schlissel, still TBD:

“I remain cautiously optimistic that we will be able to deliver a public health-informed fall semester on our three campuses, with as much in-person instruction as possible. Until we have more information, we won’t know how this will look. I will share any decisions we make as soon as I can.”

The rumblings are that large lecture classes will likely be online and smaller classes are more likely to be in-person. But sounds like they’re working on two plans simultaneously.


Geez this is starting to look like the WWII era where everybody had two years in the military on their resume. Same deal, but covid.

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