(JTA) — Yeshiva University’s $1 billion endowment will be cut nearly in half as part of financial and operational split with the Albert Einstein School of Medicine, which is to become a separate entity, the Forward reported.
The university’s transfer of funds to the new venture — a total of $465 million — is disclosed in financial documents the school released last month and revealed in the Forward report Friday.
“These assets will no longer be Y.U.’s,” said one faculty member, who spoke to the Forward on condition of anonymity because of the sensitivity of the situation. “They will be transferred to Einstein — and that’s a big chunk.”
A spokesman for the university confirmed the figure but emphasized that the money in question had originally been designated for the medical school and was not taken from funds meant for the university’s other schools or departments.
Einstein, a celebrated school in the larger Y.U. system, has been losing tens of millions of dollars annually. And Y.U., which is facing its worst financial crisis in recent memory, determined that the Bronx medical school was largely responsible for the university’s financial woes, including large budget deficits and degraded credit status by bond rating agencies, according to the Forward report.
Einstein accounted for about two-thirds of the university’s annual operating deficits when Y.U. reached an agreement with Montefiore Health System – a chain of six hospitals and an extended-care facility — to make the medical school part of Montefiore, which is to assume financial and operational responsibility for it.
Y.U.’s president, Richard Joel, hailed the agreement with Montefiore as “historic” when it was reached in 2014. The university, he said, was “taking a powerful and important step towards building a financially sustainable Yeshiva University.”
In September, Y.U. officially relinquished control of Einstein to Montefiore, though it retained its role as the degree-granting institution for the medical school’s graduates. Einstein’s accreditation is expected to be approved in 2018, a statement from the medical school’s dean read.