Here are the figures now being reported for endowment per student in 2013/14 at six leading colleges and universities:
You got it right! These figures are for endowment per student. Tuition income, annual funds etc. are not included. At a 5% spending rate … well, you get the picture.
Not long ago I would have rejoiced that such fine institutions were doing so well. Now things seem to have reached absurd levels; The discrepancy between rich institutions and all the others keeps growing. Some fine colleges are struggling to do a good job with endowments under $50,000 per student, and projects such as the Paideia Institute which we know have powerfully beneficial effects on disadvantaged students struggle to do get the support they need.
It’s time to blow the whistle. And time to shift gears.
These endowments are growing fast, in part from successful capital campaigns but also because college endowments are tax exempt, and because spending rates are often quite low. Is it any wonder then that bad ideas are keep surfacing, calls for free tuition at Harvard, for example, (a giveaway to rich parents), and various schemes to “recover the taxpayer’s money that is “being lost,” thanks to the tax exempt status of these endowments. Of course, it is not ”taxpayer’s money.” These funds are the result of gifts from private individuals who over the years have contributed to these institutions so they could advance and transmit knowledge.
But, no matter what, the more the endowments grow the louder will be the demands to tax them. They are sitting duck for populist politicians on the right as well as on the left. The only way to avoid that, I believe, is by a pre-emptive strike: a consortium of colleges contribute to a fund to address structural problems that currently keep talented young people from getting a first rate education – the quality of high school instruction, the skewed admission process, curricular weaknesses in many colleges, etc.
A 1% annual contribution from the endowments of just these six colleges would yield over a billion dollars a year for structural improvements that could strengthen all of higher education. It’s time to be proactive.