A series of faltering investments has Calvin College facing a budget shortfall by 2017, a scenario administrators expect to remedy by selling real estate holdings, eliminating academic programs and services, and reducing spending.
“The assessment of our current financial circumstances leads me, the cabinet, and the planning and priorities committee to conclude that we need to begin the work to improve our financial foundation,” Calvin President Michael Le Roy wrote in a report to the college’s board of trustees last month.
In an interview with MLive, Le Roy said he couldn’t immediately put a number on how much was lost after the economic downturn caused the rate of return on a group of alternative investments and hedge funds to drop significantly.
“It’s hard to say because you would have to say ‘compared to what,’ said Le Roy, who stressed that Calvin’s overall ratio of assets to liabilities remains positive. “So in other words, if the whole market is going down, you then have to speculate we would have only lost this much if we had invested in other things.”