The growing ability of private colleges and universities to use a high level of annual endowment spending in support of current operations has been a source of financial strength during much of the past two decades. More recently, however, declining endowments at most colleges have raised concerns about declines in the availability of annual endowment spending. Decreases or stagnation in endowment spending would pose a particular challenge for colleges that have grown most reliant on such endowment support. This article describes these recent changes in endowment support for current operations, analyzes how the budgetary strains have arisen, and suggests ways that colleges may respond to the strains.
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