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While many universities are contemplating budget cuts, an expert in college finances predicted Yale should be able to increase spending next year.

In a report on Yale’s formula for endowment spending, Dick Ramsden of the Commonfund — a nonprofit organization in Wilton that manages money for colleges and other nonprofits — estimated that Yale’s spending for the 2003-04 fiscal year would be $4,616,775, a 2.6 percent increase from last year. That projected increase comes on the heels of Yale’s announcement that, for the period from June 30, 2002 to June 30, 2003, Yale’s investment return was 8.8 percent, bringing Yale’s endowment to approximately $11 billion.

A policy of alternative investments and a special formula for endowment spending have helped Yale avoid much of the difficulty associated with the struggling economy, Yale investment officers said Monday. The University is currently attempting to raise more funds during the silent phase of its capital campaign, in which Yale officials try to raise money from individual donors before beginning a public campaign. Yale President Richard Levin said the struggling economy has made this process more difficult.

“We had a relatively slow fund year last year because of the economic slowdown,” Levin said. “We’re already sensing that this year is likely to be better.”

As a result of the struggling economy, some universities faced budget cuts this year, or will be facing them next year, the survey reported. Forty-nine percent of respondents said they had made cuts to their operation budget last year. Sixty percent reported cuts to building and maintenance, 48 percent reported cuts to academic programs, 45 percent reported cuts to investment and finance overhead, and 23 percent reported cuts to athletics programs.

In particular, MIT faces operating budget cuts of $70 million next year and will cut approximately 200 jobs because of two consecutive years of declining endowment value.

A Commonfund survey of 122 higher education institutions found that the average investment return was 2.9 percent. Of the six responding institutions with over $1 billion in assets, the average annual rate of return was 2.3 percent, in contrast to Yale’s 8.8 percent investment return this year.

Yale’s 10-year investment return on the endowment is the highest among its peers — Harvard, Stanford and Princeton universities and the Massachusetts Institute of Technology — Yale investment officers said Monday.

In total over the last decade, the University generated $9.6 billion in investment gains, spent $2.6 billion and received $800 million in gifts. The Yale Investments Office reported that these investment gains were a result of diversification into areas such as real estate, venture capital, hedge funds, timber, oil and gas.