A new study of endowments by the National Association of College and University Business Officers (NACUBO) and the Commonfund Institute has brought good news to college and universities: While endowment returns dropped precipitously in fiscal year 2009 as a result of the financial crisis and accompanying slide in equity markets, they climbed to an average of 19.2 percent for fiscal year 2011. At the same time, however, 2011 returns were still below the average inflation-adjusted spending rates of educational institutions. In addition, the European debt crisis and continuing economic difficulties in America have resulted in new market volatility since the end of the 2011 fiscal year on June 30. What does all this mean for endowments going forward? How should boards think about endowment spending, asset allocation, outsourcing, gifts and donations, and institutional debt? The NACUBO-Commonfund Study of Endowments reports and analyzes return data and a broad range of related information from public and private American colleges and universities. The 2011 study includes data from 823 institutions. Its size and scope make it the most comprehensive annual report on the investment management and governance practices and policies of higher education institutions across the country. In this article David Bahlmann, president and CEO of the Ball State University Foundation, speaks with John D. Walda, president and CEO of the NACUBO, and Verne O. Sedlacek, president and CEO of Commonfund, about the results of the study and its major implications for boards. (Contains 3 resources.)