Iowa State’s fund-raising organization lost $18 million during the recent stock market crash, but student scholarships will not be affected, officials said Thursday.

About 10 percent of the ISU Foundation’s $180 million endowment evaporated during the summer quarter (July-September), as the market endured its steepest and most prolonged decline since 1987.

The endowment is funded by donations from corporations and ISU alumni, and the income from its investments goes into the university’s scholarship fund.

“This has been an unusually strong stock market for a long time. I don’t think anyone’s surprised by the correction,” said Tom Hawkins, the foundation’s vice president and chief financial officer.

Hawkins said the foundation’s payouts to the university, which provide the bulk of student scholarships, are not in danger of being cut because they are calculated on a three-year average.

In the three-year period ending June 30, this “rolling” average was up more than 10 percent, so the recent drop will not be significant unless the market stalls out at its current levels.

“The endowment funds are designed for the long term,” said Warren Madden, ISU’s vice president for business and finance. “We’re not concerned about it at this point in time.”

The foundation has earned 22.3 percent over the last two years and 24 percent over the last three years, Madden said.

“The earnings from the endowment that we provide to the university do not go up and down with the market — we have a smoothing function,” Hawkins said. “The amount that we distribute is not going to be affected by this dip in the stock market.”

In 1987, the stock market recouped all of its losses in the next quarter, an occurrence Hawkins hopes will repeat itself.

“If it doesn’t get any worse than it is right now, it’s going to have no lasting effect,” he said. “We project a long-term average annual return of 10 percent, but we don’t expect to hit 10 percent exactly any one year. We’re going to have good years, and we’re going to have bad years.”

The endowment’s portfolio is primarily composed of stock in large U.S. corporations, Hawkins said. This equity is invested through an index fund that matches the Standard and Poor’s 500, an average of the 500 most heavily traded stocks on the New York Stock Exchange.

Corporate bonds, international stocks and small- to midsize-company stock make up the rest of the portfolio.

“No single company makes up a significant proportion [of the endowment],” Hawkins said.

The losses at ISU are similar to those at other universities around the state.

According to The Des Moines Register, investments at the University of Iowa and Grinnell College were down about 10 percent as of this week. The University of Northern Iowa’s endowment lost about 9 percent during the summer quarter.

Hawkins said the foundation’s board of directors decided at its September meeting not to make any major changes in its investment strategy.