Should mission-driven nonprofits put money aside for a rainy day or spend what they have meeting the present needs of the people they serve?
It was not so long ago, perhaps less than three years, that members of Congress were lobbying large, wealthy universities to increase their endowment spending to match the growth of their endowments in order to slow, if not reverse, the practice of automatic annual increases in tuition. Post 2008-2009, these same universities are no longer so wealthy; they have been forced to cut budgets and headcount to reduce operating deficits, even after yet another round of annual tuition increases far in excess of inflation.
[This article has been reproduced with permission from Qn, a publication of the Yale School of Management http://qn.som.yale.edu]