The smart money: A case study illustrating the impact a global economic recession has had on endowment funds at three Ohio higher education institutions

Managing the endowment funds of higher education institutions has grown increasingly challenging. Throughout the 2008 "great recession," institutional leaders have been under pressure to maintain the purchasing power of their endowment funds for future generations of students; however, some of these funds have lost 30--40% of their value. This research was a comparison case study of the endowment funds at three different higher educational institutional in Ohio, their management, and their investment policies. The research involved gathering data such as written or implied endowment management and investment policies, and interviewing key person(s) involved in each institution's endowment process. The purpose of this case study was to understand the effectiveness of endowment management practices and investment policies at a large state university, a smaller private college and a community college. A focus of the study was to what extent these institutions have been affected by the current global economic recession. Four major themes emerged from the research. These central themes included liquidity, philanthropy, taking a long-term perspective, and external management. The research suggest that In an economic recessive climate endowment managers must make it a priority to define, utilize, and evaluate these four themes. However, the research failed to prove risky investment policies, ones that included alternative investing, exacerbated the recession's impact on these three endowment fund values.