After a three-year slump, endowments at the nation's colleges and universities are on the rise, according to an article in the Jan. 23 issue of the Chronicle of Higher Education. Brandeis' own vault, ranked 105 out of 717 schools, rose 6.1 percent over the last year, reaching $407 million in June and up to $465 million by now.Although the market has only recently begun to rebound, financial policy at the University has been stable, according to Associate Vice President of Budget and Planning James Hurley.

"Brandeis came through the three-year bear market without losing any money," Jeffrey Solomon, the University treasurer and chief investment officer, said. Solomon said he credits this feat mostly to a "diversification of strategies."

Because the recent economic upswing has only just begun, Brandeis might be in a position to reap the benefits. Smart management has made it possible for the University to "participate on the upside, but protect ourselves from the outside," Solomon said.

Endowments and budgets need to be high enough to sustain the costs of running a college or university. Even if the endowment grows, Solomon said, it is not necessarily in a university's best interest to spend the bulk of this money. It is better to focus on producing "long-term growth, a reasonable level of current income and risk-management overview," Solomon said.

Though Brandeis' endowment went up, endowment support only accounts for approximately six percent ($13 million) of the total budget of $225 million. Brandeis is a "tuition-dependent school," Hurley said. The school's reliance on tuition revenue is a product of its age, he explained. Most alumni are still working and have not yet been able to leave their estates behind to the University.

After tuition, sponsored research and auxiliaries such as room and board, the endowment the school's biggest source of revenue. But gifts also make up a significant portion of the pie. This year, the University received between $8 and $9 million in gifts, which supports current operations.

Right now, the University is undergoing a capital campaign to raise money, and is already 70 percent of the way toward a five-year goal of $470, according to Hurley and Solomon. Endowments generally grow through a combination of gifts and returns, Solomon said.

Size also matters in the endowment game. Brandeis is a smaller school, so the increase-6.1 percent in this fiscal year-makes a much more noteworthy difference than it might at larger schools. "Our 6.1 percent will look better than some of the others," Solomon said.

Most of the endowment money is spent on academics, financial aid and sponsored research. The rest is spent on an array of other things, including research, university services, public safety, utilities and other essentials in running a university. The endowment itself is not used to cover these expenses because there is only so much that a university can take out of an endowment; state laws set limits on this spending.

"The percentage of restricted versus unrestricted funds is one of the indicators of financial flexibility," Hurley said.

According to the article in the Chronicle, most of the national growth resulted from the 39 wealthiest endowments. The combined assets for these schools-$133.3 billon-accounts for 57.8 percent of the total endowment value on the list. Endowments worth over $1 billion grew by 4.1 percent. The gap between colleges with sizable endowments and those without is ever widening. Almost 300 endowments shrunk this year, the Chronicle reported.

Both private and public colleges are facing financial difficulties, but public universities that receive money from state governments are in more of a bind. To add to the financial discrepancy, the schools with the higher endowments are, for the most part, wealthier schools to begin with, according to the Chronicle. Describing this self-perpetuating cycle, Solomon said, "Bigger endowments lead to bigger returns.