University of Chicago cuts budget as endowment falls 30 percent

The University of Chicago reduced operating budgets for this year and next and halted $30 million in building projects after its endowment fell 30 percent.

The budget for the current year, which started in July, was cut by $45 million, Provost Thomas Rosenbaum said in a letter to students and staff. Spending in fiscal 2010 will be $2.6 billion, 7 percent lower than previously planned.

U.S. endowments lost an average of 24.1 percent in the last six months of 2008, according to a report today by Commonfund Institute in Wilton, Connecticut. Investment losses have forced institutions such as Harvard University and Yale University to freeze salaries, delay construction projects or borrow money to meet their budgets.

"We continue to re-examine every piece of planned construction and renovation," Rosenbaum said. The school expects to proceed with building of the Mansueto Library, the David Logan Arts Center and the New Hospital Pavilion.

The university's endowment was $6.63 billion as of June 30. At that point, U.S. stocks and international stocks made up 9.4 percent and 20 percent of the fund, respectively, while private equity was 15 percent.

The fund's loss from July 1 through Feb. 28 compares with the 43 percent decline by the Standard & Poor's 500 Index.

The school's medical center laid off 450 employees last month in response to patient revenue that were little changed.