Trends in the national economy suggest that these entities are in for another slide of a year or two. Expenses continue to steadily expand driven primarily, we suspect, by inflation of salaries and wages.
The dramatic slides are created by the FASB requirement that realized and unrealized gains or losses are to be reported in the current year. The relatively quick climb out measures the return of value to retained investments.
The troubling trend is the failure of the climb-outs to keep pace with the growth in expenses. Will there be an adjustment in the future?
The following charts suggest that the expenditure budgets of colleges and universities are reasonably stable (salaries and wagess); that the revenue streams are dependent on the national economy (investment return for donations, tuition fees).