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Lafalum
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Harvard reports to AP "at least an 8 billion dollar droHarvard president reported that there was an 8 billion dollar drop in their portflio since June 30 but ( here's the amazing thing) NOT ALL OF THIER portflio manager have reported and they expect that number to rise and they don't know the extent of these losses....duh? She feels the losses could reach over 30 pct of the portfolio. Which could bring them to over 10 billion dollars.
On another front the Chronicle of Higher Education has an article where the CFO of Cornell is urging colleges and universities to be open and candid about their financial problems or risk downgrades and investor and donor resistance! He also admonishes these institutions to take second and third looks at invstment practices and the risks that have been assumed. Something our BOT and administration should heed.
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ranger
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lafalum- Can alumni bring legal action against College for conflicts of interest( former alumni-trustee a buddy of former BOT Chair serving as manager) mismanagement of Endowment, lack of disclosure on losses, etc.? I would consider joining a group action to recover my "$10 a year" donations.
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Lafalum
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Good question...let me consult an attorney on that. I do know in Pa there are requirements for alumni at large to be represented and informed. Unfortunately Sarbanes Oxley does not apply to non profits. If there are attorneys out there please opine, but I know where to go to get an opinion.
The history of non profits in this area is spotty. For example the actions of the president of Boston University and his BOT is a well known abuse of trust, but no suits have been successfully filed. Public shame is probably the best alternative but a suit could certainly be part of that. Having a separate subsidiary ( Hollow Brook Assc) doing the college's investing, and having a person who is employed by someone else, running it, is an interesting avenue of inquiry. Why the fees and associations are not disclosed on the 990 filings, are places to start. I will need to do more research.
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TheTruth
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| ranger wrote: | | lafalum- Can alumni bring legal action against College for conflicts of interest( former alumni-trustee a buddy of former BOT Chair serving as manager) mismanagement of Endowment, lack of disclosure on losses, etc.? I would consider joining a group action to recover my "$10 a year" donations. |
I highly doubt you can legal action against the College. The conflict of interest you mention about the manager happens all the time at all levels of non-profits organizations. It looks bad but often saves the organization money.
Lack of disclosure is really an ethical issue and one the College in general really needs to address. We've lost a number of alumni because of the veil of secrecy over the years (athletics, handling of the Greek system, numerous student issues, etc). These alumni simply do not trust the administration of the College. That is a shame and something that needs to be worked on. Transparency is a good thing.
Mismanagement of funds is highly debatable considering many other top colleges and universities used the same investment practices. In hindsight, yes we should have been more conservative but finance officers around the country were pressured to increase their endowments by investing in these hedge funds. Everyone was envious of Harvard's 20%+ returns and followed their lead (as well as other colleges). Moving forward, the BOT needs to establish clear guidelines for investing. I understand that they already have them but obviously the were not followed nor did they heed the warnings from others. But no good is going to come from burning someone at the stake.
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Lafalum
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| TheTruth wrote: | | ranger wrote: | | lafalum- Can alumni bring legal action against College for conflicts of interest( former alumni-trustee a buddy of former BOT Chair serving as manager) mismanagement of Endowment, lack of disclosure on losses, etc.? I would consider joining a group action to recover my "$10 a year" donations. |
I highly doubt you can legal action against the College.
Lack of disclosure is really an ethical issue and one the College in general really needs to address. Everyone was envious of Harvard's 20%+ returns and followed their lead (as well as other colleges). Moving forward, the BOT needs to establish clear guidelines for investing. I understand that they already have them but obviously the were not followed nor did they heed the warnings from others. |
I tend to agree although there is nothing to stop a lawsuit....its a matter of how sucessful it is or what you want to accomplish.
I understand their guidelines (such as they are) specifically allows for 50% of the portfolio in "alternative investments". The BOT approved it which at least proves to me they either didn't pay attention, or rolled over for the leadership. I would really, really like to see this Board leadership go away, on issue after issue they have been shown to be stupid or incompetent. The secrecy issue just compounds it. I continue to hope that public humiliation helps to remove some of these dolts. I will continue to direct my contributions to specific funds and I tell the beneficiary that I did that and what it is for. No way will I EVER give to the annual fund!!
By the way I hear at a faculty meeting several days ago Weis when pressed, admitted the losses of nearly 200mio dollars. Does that mean they are now over 200??? Faculty was not pleased!!! Either with the loss or previous lack of candor!!
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ranger
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CNBC reported today many hedge funds lost another 10-15% in November. The news from hedge funds keeps getting worse. Also , reported more and more HF's will not honor withdrawal requests. On our way to $250M in losses! Bye, Bye to Weiss and, hopefully, many Trustees who refuse to face reality and give the "true" story. Hey, how's the Capital Campaign going. I bet the "quiet" period is very quiet.
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Pard4Life
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I am strongly considering writing an op-ed to the Lafayette on this whole matter, however it will have to wait until January when the students return (I believe tmrw is the last semester issue). I read the NY Times Harvard article and a Nov. 29 NY Times article on donor giving and was quite incensed.
Hedge funds will start to blow up after this month... if I am not mistaken, redemptions occur at the end of the month. HFs have been selling like crazy and deleveraging as much as possible. Once investors redem, HFs that have not unwound their trades or deleveraged will cave. So yes, I can see that loss at Harvard at 30%... they just lost 5years worth of investments.
I can see why our losses seemed 'modest' as of June 30 after reading a WSJ article on the PA pension funds... only down a few points at the time, but really balloned as the year progressed... which is why I guess I heard of conservative loss estimates as of 6/30... as has everyone else.
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Lafalum
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Perhaps we should also send them the audit report..what do you think??
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Pard4Life
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| Lafalum wrote: | | Perhaps we should also send them the audit report..what do you think?? |
I was thinking the same... why not? It's public information...
Here is the Laf article I was referring to.. headline a bit misleading, the quotes talk about donations to the endowment, last year (like that helps), and disarming statement by Weiss.. I don't think any hard questions were asked about the endowment though, answers are only as good as the question, sometimes.. article completely misses the point..
Endowment doing fine, say officials
By: Brian Selvarajah
Posted: 10/3/08
Although America's economic footing remains on shaky ground, officials say Lafayette's fundraising efforts are unaffected, but college officials say current fundraising efforts have not yet been changed.
"Last year, we ended with our second best fundraising year in the history of the College, raising about $28 million, with the previous two years raising $21 million," Vice President of Development and College Relations Jim Dicker said. "So far this year, we have experienced wonderful success with early solicitations in our capital campaign."
Although these figures signify that the endowment faces no current decline in donations, some worry Lafayette will feel the affects later down the road.
"A prolonged economic downturn will certainly have a negative psychological impact on many donors," Dicker said. "Our job is to find donors who are less impacted by the events on Wall Street."
"Donors have shared that they would like to give but are hesitant to do so because of the economy. This year, a limited number of donors have decided not to give at all," Associate Director of Annual Funds Emily Kernan said. "However, most donors have stated that although the economy is a concern, they will continue to offer support to Lafayette because of their affinity for the College."
Dicker also said that in the past 20 years Lafayette has managed to meet its goal created for the College's budget, regardless of extraneous economic conditions.
Lafayette's Capital Campaign, a long-term initiative spanning over seven years, is in its early stages. With America's immediate economic future uncertain, the campaign's success over the next few years is not guaranteed. In response, Dicker said, "There will be several economic cycles during this time period, and we just need to keep moving forward and raising funds."
Kernan also said efforts are being focused on older alumni who have consistently given to the college.
"Our endowment has followed the market fluctuations. On Monday, our endowment was down. [On Tuesday], our endowment was up," President Dan Weiss said. "We're living on this rollercoaster we call the American economy." Further, "I'm worried about our endowment because I'm worried about our economy…thus far we have been preceding with our fundraising initiatives and they have been going very well."
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ranger
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WHAT B S!
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Pards Rule
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| Lafalum wrote: | Good question...let me consult an attorney on that. I do know in Pa there are requirements for alumni at large to be represented and informed. Unfortunately Sarbanes Oxley does not apply to non profits. If there are attorneys out there please opine, but I know where to go to get an opinion.
The history of non profits in this area is spotty. For example the actions of the president of Boston University and his BOT is a well known abuse of trust, but no suits have been successfully filed. Public shame is probably the best alternative but a suit could certainly be part of that. Having a separate subsidiary ( Hollow Brook Assc) doing the college's investing, and having a person who is employed by someone else, running it, is an interesting avenue of inquiry. Why the fees and associations are not disclosed on the 990 filings, are places to start. I will need to do more research. |
Hollow Brook should change its name to Hollow BROKE
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