Plenty of numbers were thrown around in last week’s Summer Kent Stater article, “Reserves to help fund tuition freeze,” and editors thought it was necessary to put some of those numbers in better context.

Information from the story comes from interviews with David Creamer, senior vice president for administration.

$327 million

This is the sum of Kent State’s investments, Creamer said. This invested money comes from various sources, including leftover department money and balances from units such as the university’s other campuses.

In 2002, a change in Ohio law allowed public universities to diversify their investments. Before that year, Creamer said universities were only allowed to invest in government bonds, which had low but guaranteed rates of return.

For the past five years, he said Kent State has made “more volatile” investments – which carry greater risk, but greater returns.

Creamer said Kent State has a large and diverse stock portfolio, including investments in hedge funds, private equities, real estate and energy. The university still invests in traditional equities and bonds, Creamer said, emphasizing the point that the portfolio is diverse.

The average rate of return over the last five years on all of Kent State’s investments is 8.89 percent, but the past year was a good market year, earning the university a 16.7 percent return.

$35 million

In order to protect against loss from these investments, Kent State has an “Investment Stabilization Fund,” which for fiscal year 2006 amounted to slightly less than $35 million – not $327 million, which was reported by the Summer Kent Stater last week.

This $35 million fund comes from profitable investments and is used to prepare for investment loss.

In case of a bad market year, the fund allows for predictability in the university budget.

“We would prefer the budget to be more predictable and more stable,” Creamer said.

$4.7 million

Kent State’s Board of Trustees agreed to use money from the Investment Stabilization Fund to make up for the $4.7 million deficit created by the tuition freeze. Before this, the fund had not been used for such a purpose.

The recent increase in state support has not been enough to make up for the shortfall created by the freeze.

Creamer said the new investment strategy “is about trying to find ways to help us deal with the reductions in state support, which have occurred dramatically in the past six years, but gradually in the past 30 years.”

Creamer said in the 2006-2007 academic year, 23 percent of Kent State’s total funding came from the state.

Contact principal reporter Kiera Manion-Fischer at [email protected].