Strapped Hood College to Dip Into Endowment
Hood College, beset by financial woes that threatened its survival, has won permission to use $10.5 million of its endowment funds to pay off its most serious debts in a move that some experts called unique.</br></br>The private college in Frederick, which admitted men to its residential program for the first time this year, had defaulted on loans to two banks and was on the verge of having to consider closing when it took the unusual step of seeking a judge's approval to tap into its $50 million endowment, according to court records.</br></br>The bulk of Hood's endowment is made up of funds earmarked by donors for special purposes -- such as scholarships or new buildings -- that generally cannot be touched for regular operating expenses. But Hood officials argued in their petition to Frederick County Circuit Court that the institution would have to shut down if not allowed access to the restricted funds. Hood's actions were first reported in the Baltimore Business Journal.</br></br>Like many small, private liberal arts colleges, Hood has been buffeted in recent years by a flagging economy and the sharp decline in enrollment experienced by many other women's colleges. That trend prompted Hood's decision last year to go fully coeducational starting with the current academic year.</br></br>President Ronald J. Volpe said last week that the unconventional endowment disbursal is one of several moves he believes have set the institution on the path to fiscal rejuvenation. Hood recently laid off about 30 non-teaching employees to reduce expenses. Meanwhile, enrollment has risen in the past two years from 1,500 to 1,700 full- and part-time students, and Hood last week sold part of a large off- campus property in a deal that will provide a $3 million cushion for the coming academic year.