Traverse City Record-Eagle

Grand Traverse County

November 14, 2009

NMC working to recoup market losses

Foundation funds took hit during global economic downturn

BY Sheri McWhirter

TRAVERSE CITY -- Northwestern Michigan College's fundraising wing is back on an upswing after investment losses reached $8 million during the last year.

Losses turned to gains in recent months, though the bottom line remains down by nearly $4 million. The road to recovery won't be easy, officials said.

"As we move forward, given the risks with the current economy, it's going to be a lot harder to make money," said Mark Lundmark, an NMC Foundation board member.

NMC Foundation invests in the stock market and bonds to fund student scholarships and college enhancements, such as professional development, technology and physical improvements to campus.

The foundation's fund balance lost $2.1 million in value during the third quarter last year, when the nation's economic recession picked up speed. The foundation's investment values were $27.7 million in June 2008, fell to $19.7 million in March, then rose to $22.8 million in June and $23.8 million in September.

"We are cautiously optimistic. We have concerns about the current economic environment and the impact on our investments," Lundmark said.

Lingering worries include rising unemployment and national debt, along with reduced consumer spending, he said.

The back-and-forth on foundation investment earnings and losses may lead college officials to change how they invest, said Kathleen Guy, the foundation's executive director.

"We're taking another look at our investment policy to make sure it's as sharp and focused on what we're trying to accomplish for the foundation and the college," she said.

But the NMC Foundation did not bail out of the stock market, opting instead to ride out the financial storm and wait for profits to return, Lundmark said.

"You are much better off retaining your financial investments during difficult times," said Lundmark, a local financial adviser with two dozen years of experience.

The impact is felt with student scholarship dollars.

The college awarded a record high of $1 million in scholarships to 675 students in the 2007-2008 academic year. Last year, 682 students received about $953,000 in scholarships, a $47,000 drop, said Paul Heaton, college spokesman.

This academic year, foundation awards will be $935,000 for 459 students, though more will receive scholarships through the coming spring semester.

NMC student Dan Karlskin, 20, of South Boardman, is studying business administration and accounting. He received several scholarships through the college's foundation, critical money for his education, he said.

"Receiving those scholarships relieved a lot of stress about going to college. Otherwise, I might not have been able to attend college without taking out a bunch of student loans," Karlskin said.

The recent rocky financial market makes the college's annual fundraising campaign all the more important, Guy said.

"I think overall, as we look at the landscape, there is a new normal in play. The new normal is that community colleges will have to raise money," she said.

Donors exceeded NMC's goal to raise $350,000 last year by about $5,000. The goal this year is $365,000, the largest goal ever, Heaton said.

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