The University's endowment, which dropped 29.4 percent in February, experienced an 18 percent recovery. Before the decline in the financial markets and recession, the endowment was $82 million.
Sandy Mooney, vice president for financial operations, said the recovery in the endowment is a result of the rise of the financial markets.
"The market is coming back. Our endowment is recovering from that, not necessarily growing again, but it's slowly making its way back," Mooney said.
HBU is one of many universities nationwide that suffered losses in its endowment because of the economic recession. Major universities such as Harvard and Yale suffered big losses due to high-risk investments. Universities in Texas also took a hit in their endowments. Baylor's endowment dropped 13.3 percent and Southern Methodist took a 24 percent loss, according to an Oct. 9 article in the Houston Chronicle.
Mooney said that the investment policy for the endowment is a conservative one with a variety of investments to maintain a balanced portfolio and to ensure that the University does not lose a substantial amount of funds.
"Our policy is a traditional, conservative policy so we do not lose too much," she said. "The board of trustees also take their fiduciary responsibility to manage the endowments seriously in order to produce income for years and years to come."
Mooney said scholarships are the endowment's biggest contribution, and the endowment has never been large enough to contribute to operations. She added that 5 percent of the average value of the endowments investments is used every year.
"As a University we are putting together competitive aid packages that are primarily funded by the endowment."
James Steen, vice president for enrollment management, agreed with Mooney and said the rise in endowments presents an opportunity to use less University dollars to fund scholarships.
"Money from the endowment is the pipeline to fund our scholarships," Steen said.
He added while the endowment has not fully recovered, the University still has to be aggressive with its scholarship packages for the upcoming year.
President Robert B. Sloan Jr. said one important thing about the endowment is the stress on good investment policy.
"The economic meltdown did not help last year," Sloan said. "In addition, Hurricane Ike almost made things worse, but the Houston economy held up well. A lot of our endowment is invested in Houston real estate that has faired better than those compared in other states."
Sloan added that the economic challenges last year drove the administration to think of creative ways to ensure fiscal responsibility.
Mooney said that while the endowment is making a recovery the effects of the past 12 quarters will still have an impact over the next two years.
"The University is still in a period where we are challenging what we are spending," Mooney said. "The University is still not operating at a pre-Ike and economic downturn level."
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