Universities across America, including Texas A&M, have experienced reductions in donations.
In the fall a letter to donors from A&M Foundation President Eddie Davis, Class of 1967, that was posted on the A&M Foundation's Web site, stated there was a significant drop in donations for higher education across the board.
"Moody's Investor Services has projected losses of 30 percent or more for higher education endowments overall this year," Davis said.
However, later in the letter, Davis said that while donations were low, A&M was not in as much trouble as most.
"Endowments for A&M are not immune, but I want to assure you that the Texas A&M Foundation - which holds and invests the bulk of A&M's endowed gifts - is in better shape than many of its peers," he said. "That's because we preserved sufficient cash to avoid selling holdings in a falling market."
While the national scale is reported at a 30 percent loss this fiscal year, beginning July 1, the Foundation's long-term investment pool contracted by Janet Handley, director of investments for the Foundation, said A&M is prepared for times like these.
"For more than a decade, the Foundation has been widely diversified in its investments, using an asset allocation model designed to maximize growth while safeguarding our capital during tough economic times," Handley said. "Using this model, we have consistently outperformed our peer organizations. "
The way money is transferred from the donor to A&M is through a system that does not fluctuate with a spike or dip in donations.
Every quarter an average of the last 20 quarters of donations is taken and that amount is given to the school. So one year of low donations will not significantly affect the students. It would take years of a low economy see effects.
Director of Communications at the Texas A&M System, Rod Davis, said there should not be any concern about a near-future effect of low year of donations on students.
"The effects of any particular year's loss or gain are averaged out over a period of time so it doesn't really show up in any one particular year, so it's hard to say what the effect on students next year would be, it would probably be fairly minimal." Davis said.
"If there is any effect, say the market doesn't recover or it does recover, that wouldn't be known for the next three to four years down the road."
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