TRAVERSE CITY -- Northwestern Michigan College's fundraising wing saw the value of its investments fall $2.1 million during the third quarter this year, and officials said losses could hurt programs and scholarships next academic year.
The community college itself does not invest in the stock market, but it's a different story for the NMC Foundation.
The nonprofit fundraising group's investments took a beating between July and September, and more losses are expected for the turbulent month of October, officials said.
"Because of the market, we have seen some of the endowments drop below the original endowment levels," said Cathy Jones, NMC vice president of finance and administration.
That means much less in interest earnings available to spend next academic year. NMC's foundation awarded a record high of $1 million in scholarships this year.
"We'll hope for brighter days," said Kathleen Guy, the foundation's executive director.
The nonprofit foundation raises money for the community college and annually awards scholarships to students, including 100 endowed scholarships. It also provides program enhancements, professional development and both technology and bricks-and-mortar projects on campus.
All of that could be pinched without a major economic turnaround. It's now "wait-and-see" how much can be spent in coming years, but the foundation won't bail out of the market, Guy said.
"It's heartbreaking and disappointing because it means we have to take a look at funding as many scholarships as we can," Jones said. "If the economy swings around ... those investments will go back up and the scholarships will go back up."
The NMC Foundation is like many others across the country that are reeling amid lost investment value, said Katie Thornton, auditor with Plante & Moran in Traverse City, the company that completed audits for NMC and the foundation.
The loss of potential scholarship money comes at a time of economic hardship, typically when many people intend to return to college for new job training, she said.
The major economic risk to the college itself could come in two forms: if the state opts to withhold any of the $8.7 million allocated to NMC this year; and if the region experiences a significant drop in property values, Thornton said.
