Across the country, the value of university endowments is plummeting – and the University is no different.

The value of endowments at the University has fallen approximately 26 percent, according to Tom Landrum, senior vice president for external affairs. This is slightly higher than the national average of about 23 percent, reported by the National Association of College and University Business Officers in January.

Unlike one-time gifts, endowments are meant to be sustainable. The money is invested in the market, and only a portion of the portfolio’s earnings is spent each year.

“With endowments, you only spend what it earns,” Landrum said. “You manage those endowments so that you never spend the entire amount it earns. Instead, you spend a prudent amount and put the rest of it back into the fund.”

Other colleges in Georgia have seen similar declines. Endowments held by the Georgia Tech Foundation fell roughly 22 percent, wrote John Carter, president of the foundation, in an e-mail. The Associated Press reported Emory University expects a loss of $60 million from its endowment fund.

When the market is booming, the money generated by endowments can be large enough to support significant developments at universities. According to a University System of Georgia report, the four research institutions within the system use their endowments to support a total of 184 endowed professorships and 1,600 student scholarships.

Landrum said endowments account for 2 percent to 3 percent of the total budget. They fund scholarships, professors’ research and programming such as lectures.

“As endowments are going down, they will not generate adequate funding to provide the support for which the endowment was intended,” Landrum said. “Maybe we don’t have an event. Maybe we don’t have a lecture. Maybe we postpone one until we have the funds.”

Though tuition, state appropriations and grants account for the largest portion of the University’s budget, private giving and endowments are becoming increasingly important.

“The state has been very generous in its support of the University, but as a percentage of the total budget, state appropriations have decreased,” Landrum said.

“As the quality of the University has improved, private money is more and more making up the difference.”

There are some short-term solutions, Landrum said. Deans may be asked to use some of their general, unrestricted funds to curb the endowment losses. The University has requested donors consider giving money to continue providing to affected programs.

“Donors have been generous,” Landrum said. “And it’s more critical than ever that donors continue to give.”

Landrum said the problems facing the University are temporary.

“We’re trying, wherever it is critical, to plug in the gap,” Landrum said. “But we know the economy will come back, and people will continue to give.”