Bond-market troubles, sliding endowment plague Harvard
Despite its spotless credit rating, Harvard University is paying more than similarly rated schools in the bond market, Bloomberg reported March 31. At the same time, the university’s investments in private equities may signal worse times ahead for its battered endowment, says Steven Davidoff, law professor at the University of Connecticut, The Boston Globe reported March 3. Endowment losses at elite U.S. schools may encourage investment managers to start assessing risks as well as returns, says Andrew Rosenfield, CEO of Guggenheim Investment Advisors, in an opinion column in Forbes Magazine March 4.
One in 13 nonprofits could fold this year, expert says
About 100,000 of the 1.3 million nonprofits in the U.S. could go under this year due to the credit crisis and funding cuts, says Paul Light, professor of public service at New York University, The Colorado Springs Gazette reported March 3. Nonprofits could improve their chances of survival by merging, pooling resources and stewarding funds more carefully, he says.
Nonprofit hospitals get flak for executive pay
U.S. Senator Charles Grassley of Iowa is seeking to introduce legislation that would put pressure on boards to limit executive salaries at nonprofit hospitals, The Boston Globe reported March 4 (see salary story). The presidents of nonprofit hospitals in the U.S. earned an average of nearly $500,000 a year, and a smaller group more closely reviewed had an average salary of $1.4 million, says a survey by the IRS. Critics of the proposed move argue that higher salaries draw the most talented candidates to nonprofit positions.
College-savings plans lose value as tuition jumps
Assets in college-savings plans fell 21 percent, to $88.5 billion from $111.9 billion, as of the end of 2007, say data from the Financial Resource Corp. and the College Savings Foundation, Bloomberg reported March 3 (see savings story). Meanwhile, tuition is on the rise, with the average tuition at four-year public colleges growing 5.7 percent in the current academic year, says the College Board. President Barack Obama’s plan to cut government subsidies for school lenders may lead to fewer available student loans.
Son of Angel Food founder accused of sexual harassment
A former employee of Angel Food Ministries has brought sexual-harassment charges against Andy Wingo, son of founders Joe and Linda Wingo, The Atlanta Journal-Constitution reported March 3. Tioni Barish alleges that Wingo made numerous sexual advances and sent her nude photographs of himself. Two board members for the nonprofit also filed a suit claiming the Wingo family took exorbitant salaries, bought personal items with their company credit cards and accepted kickbacks from food vendors. A spokesman for the nonprofit told the newspaper he was unaware of the sexual-harassment suit.
* A report released by the National Committee for Responsive Philanthropy advocates an “Orwellian-style” control over grantmaking that ultimately serves the committee’s own narrow vision of public well-being, says Heather Higgins, vice chairman of the Philanthropy Roundtable, in an opinion column in Forbes Magazine March 3.
* More nonprofits are axing or downsizing their charity events rather than risking losing money in the sinking economy, The Virginian-Pilot reported March 2.
* Facing a budget shortfall of up to $40 million, as well as the loss of a third of its endowment, the Metropolitan Opera has put two Marc Chagall murals up as collateral on a loan, The New York Daily News reported March 2.
* U.S. family and private foundations have lost about 30 percent of their assets, or a total of $200 billion, says the Council on Foundations, The Wealth Bulletin reported March 2.