There has never been a shred of doubt about Reed’s intellectual capital. But when it comes to its financial capital—yes, the green stuff—the college was for decades relegated to the second tier. No longer. According to Reed’s audited financial statement, the market value of the endowment hit $518 million last year.
That’s a far cry from 1973—the year that Ed McFarlane, vice president and treasurer, arrived at Reed—when the endowment stood at approximately $4 million.
Asked by the Quest to comment on the financial progress Reed has made over the last four decades, McFarlane was characteristically laconic. “It’s good,” he told the paper in November.
Like colleges across the country, Reed was hit hard by the economic collapse of 2008, which knocked the value of the endowment down by 26% in a single year. But the endowment has staged a remarkable comeback since then thanks to Reed’s $200 million Centennial Campaign and the strong performance of the stock market in 2013.
Income from the endowment currently makes up approximately 33% of Reed’s operating budget. (The remainder comes from tuition, grants, and the Annual Fund—thank you, readers!)
Compared to our reference schools, Reed still has room for improvement. Dividing the endowment by the number of students yields a figure of $367,000, which is close to the median, but still behind deep-pocketed comparands such as Pomona, Swarthmore, Amherst, and Williams.