For minority-serving institutions such as Delaware State University, the nation’s financial crisis is starting to hit home. The university is one of more than 900 postsecondary institutions with money in the Commonfund, a short-term investment vehicle whose trustee, Wachovia Bank, surprised clients by severely limiting access to fund accounts this fall.
“It’s not causing undue concern. We expect to get that money back,” says Carlos Holmes, a university spokesman. Unlike some postsecondary institutions, however, Delaware State’s stake in the fund is small — about $100,000 of its $18 million endowment, he says.
“In the grand scheme of things, it’s a small fraction of what we have,” Holmes tells Diverse. But with $9 billion in college funds, the fate of Commonfund is one of the most pressing financial issues suddenly facing many colleges and universities.
Run by Commonfund of Wilton, Conn., with Wachovia as trustee, the fund announced Sept. 29 that investors would be allowed access to no more than 10 percent of their assets. After passage of a $700 billion federal bailout bill and some thawing in the credit markets, officials have since amended that statement by pledging soon to give clients access to up to half of their funds.
Still, Commonfund acknowledges that many U.S. colleges and universities have used the program, formally called the Commonfund for Short-Term Investments, to meet their operational needs.
“There is no doubt that the actions of Sept. 29 have left a number of our clients angry, confused and desperately searching for solutions to meet their operating needs,” said Verne Sedlacek, president and chief executive officer, in an Oct. 8 letter.
