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HHMI Endowment Bounces Back But Still Short of Pre-Recession High

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Howard Hughes Medical Institute saw its endowment bounce back slightly during the year that ended Aug. 31, after plunging about $3.5 billion the previous 12 months — but it's still well below it's pre-recession level.

The value of HHMI's endowment fund rose to $14.8 billion from nearly $14 billion in the previous fiscal year ended Aug. 31, 2009, as financial markets rebounded with the economy. However, the medical institute's endowment remains below the $17.4 billion recorded for the fiscal year ending Aug. 31, 2008, weeks before the Wall Street meltdown that signaled the start of the recession.

Endowment funding was the source of the $738 million spent on scientific research by HHMI in the year ended Aug. 31 — up from the $730 million it spent the previous fiscal year.

The endowment is also the source of the $89 million spent by the institute on grants for science education and international research scholars in FY '09. That figure fell 12 percent from $101 million in FY '09, but was still above the $83 million collected by HHMI in FY '08.

Those grants supported the activities of 533 grantees in 29 countries during fiscal-year 2010, HHMI said in the report — up from 488 grantees in 29 countries supported in the previous year, but well below the 585 grantees in 29 countries of FY 2008.

Scientific research and scientific education/scholars accounted for the bulk of the $889 million disbursed from the endowment fund during the recently-completed fiscal year.

The endowment is HHMI's principal source of funding. The institute must spend at least 3.5 percent of its endowment on direct medical research activities and related overhead, exclusive of grants and investment management expenses.

As of Aug. 31, according to the annual report, the institute employed 379 scientists at more than 70 academic medical centers and Janelia Farm, up from 375 scientists a year earlier.

Also rising was the institute's investment in laboratory space, equipment, and other property, from $1.5 billion in the 2009 fiscal year to approximately $1.6 billion this past fiscal year. Estimated replacement value also rose, to $2 billion from $1.9 billion.

In its consolidated financial statement, HHMI disclosed it had entered into a new capital lease totaling $657,000 to cover "science equipment" at various host institutions occupied by the institute. Because the lease was a non-cash transaction, it was not included in the institute's cash flow statement showing a total of about $719.2 million in cash and cash equivalents, down from roughly $725.3 million a year earlier.

Cash and cash equivalents have been funded largely by two bonds issued last year — $600 million in taxable bonds issued to create a spending reserve for funding the institute's research program as a result of the recession; and $23 million in tax-exempt bonds issued through the Industrial Development Authority of Virginia's Loudoun County in October 2009 toward construction of apartments for visiting scientists and employees at Janelia Farm Research Campus.