The Struggling Colleges Raiding Their Endowments to Pay the Bills
When Natalie Strouse’s husband of 20 years died of cancer, she honored his memory by creating a scholarship in his name at the college where she taught accounting.
Each year, she helped select a student to receive a few thousand dollars at Notre Dame College, a small Catholic school outside Cleveland. But in 2024, the college closed. Strouse wanted to re-establish the scholarship at another institution.
She asked Notre Dame for the $30,000 endowment, which under the terms of the gift could only be used to support the scholarship.
Not possible, she said an administrator informed her. The money was gone.
“She told me they used it to pay the bills,” Strouse said. “I consider it theft.”
Ohio’s attorney general last year filed a complaint against 14 trustees and officers of the college alleging they improperly used more than $2 million of restricted endowment funds outside donors’ intended purposes. The defendants have denied allegations that they breached their fiduciary duties and failed to exercise proper oversight of the school.
Higher education is in real financial trouble and Strouse’s lost scholarship is one piece of the growing collateral damage. College leaders are cutting programs, laying off faculty—and digging into endowments to pay operating expenses. Boards of trustees are under intense pressure and some are turning on one another and the presidents they employ. In extreme cases, schools are covering day-to-day bills with funds that donors gifted for other purposes, without the donors’ knowledge or consent.
