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By Andrew M. Seder aseder@timesleader.com
Times Leader Staff Writer
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After every local college saw its endowment plummet during fiscal year 2008-09, some of those accounts are rebounding with a stronger stock market and better returns on other investments.

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The six largest schools in Luzerne and Lackawanna counties saw their endowments decline from July 1, 2008 to June 30, 2009 by as little as 13.3 percent, or $1.34 million at Misericordia University in Dallas Township, to as much as 27.3 percent, or $16.6 million, at King’s College in Wilkes-Barre.

In between those extremes were Marywood University, which lost $4.34 million, or 15.3 percent of its funds; The University of Scranton saw its fund drop by $17.56 million or 15.7 percent; Wilkes University, which lost 24.2 percent, or $9.3 million; and Keystone College in LaPlume, with a loss of $2.07 million, or 25.5 percent.

The losses followed multiple years of gains and led to the local schools reporting the worst depreciation of endowment accounts in at least a decade.

“Educational institutions went through a rough patch like individual investors,” said Terry Hartle, senior vice president of government and public affairs for the American Council on Education.

At a national level, for comparison, in 2006-07, the average endowment increased by 10.6 percent. The next fiscal year, the average increase was 16.9 percent, according to Commonfund, which invests money for colleges and other groups. The value of university and college endowments fell almost 19 percent on average during the 2008-09 fiscal year, however.

Data provided by schools on Tuesday show endowments increasing once again.

At Misericordia, between June 30 and Dec. 31, the endowment increased 10.6 percent to $18.7 million. Keystone’s endowment rose 11.4 percent to $6.8 million. King’s did even better, climbing 11.8 percent and bringing its endowment up to $49.41 million. Scranton climbed back over the $100 million mark with a 13 percent gain to $106.9 million. Wilkes saw the largest recovery, jumping 17 percent and bringing its endowment up to $34.35 million.

Efforts to get data from Marywood were unsuccessful, though Hartle said it’s likely it followed national trends and saw increases.

“What you’re seeing in the Scranton/Wilkes-Barre market is consistent with what we expect to happen nationally,” Hartle said.

Fran Calpin, a spokesman at Keystone College, said school officials are holding out hope that conditions continue to improve and the days of declining endowments are over.

Many schools with larger endowments rely on those funds for a variety of uses, from salaries to capital improvements to financial aid. They’re crucially important for private schools that do not receive government funding. Most endowments are tied to investments ranging from stocks to hedge funds. Some include donations and gifts. At local schools, where endowments are not as large, they’re used more as a supplemental fund to bolster scholarships and financial aid.

“Misericordia University has been fortunate to have made some sound investment decisions and like other institutions of higher education has seen a return of our endowment from the depths of the market last March,” Misericordia University President Michael A. MacDowell said. “Every dime of our earnings from the endowment, unless otherwise restricted by the donor, goes to scholarships and financial aid. Fortunately, we were able to secure annual contributions from our generous alumni and friends to cover the temporary loss in endowment earnings and hence our students did not suffer losses in their annual gifts”

“Of deeper concern to us in the long run is the diminution of state support. Institutional Assistance Grants — the funds the Commonwealth provides private colleges in the Keystone State that enroll Pennsylvania students — declined by 28 percent last year,” MacDowell added.

At King’s, like many schools, a percentage of the endowment is based on a three-year weighted average using December data. Lisa Marie McCauley, King’s treasurer, said that by having the December 2009 endowment number increased, it will allow current and incoming students to breathe a sigh of relief knowing that financial aid will go up. She said that even if the endowment drops between now and June, the 2010-11 financial aid budget will be partially based on the December figure.

The lack of large endowments locally helped keep losses to a minimum, Hartle said.

“The schools are excellent education institutions but do not have the jaw-dropping endowments Ivy League institutions have,” he said. “They’re very conservative investments so the losses are not as great but that also means the gains are minimal, too.”