Duke and the downturn.
As of early December, the market value of the endowment was approximately 19% lower than it was on July 1. This is a serious concern, but the news could be worse. First, Duke’s investments have been skillfully managed. Over the past ten years, only one university endowment has outperformed Duke’s, and the decline we have experienced this fall has not been as sharp as many of our peers have reported. Second, it is important to remember that spending from the endowment has historically made up about 15% of the University’s annual operating budget - again, a lower proportion than many of our peer institutions. And finally, the impact of this decline on our activities will be tempered by our spending policy, which calls for paying out 5.5% of the average value of the endowment over a three-year period. This policy has kept us from overspending in years when the endowment earned large returns, and lessens our exposure to a sharp downturn now.