Our data suggest that colleges with proportionally more endowment enjoy stronger pricing power and greater capacity to bridge the widening gap between operating revenues and expenditures. At the same time, the abrupt end to the sustained 1990s bull market increases the prospect that volatility in investment returns may put endowment support of operations at greater risk. Hence endowment has become more important not only as the primary source of financing of the operating deficit, but also as a greater source of risk to operations.