Endowment, again

More on higher-education endowments: here, as exacerbating social inequality.  Note that when Harvard was throwing money around wildly during the Summers administration it barely grazed the 5% mark in annual expenditure from endowment. 

Also note the observation by the president of Princeton that the past 30 years have been exceptional in creating wealth through investment, such that spending as if the past 30 years were the norm would be irresponsible of universities.  But the past 30 years have also been exceptional in magnifying inequality, such that failing to spend on efforts to ameliorate that inequality would be equally irresponsible of universities–not to mention unjust.

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2 Responses to “Endowment, again”

  1. Anita Bernstein Says:

    They’d better hoard their vast endowment holdings in good economic times, because the lean years might come later, and bad times, because when the economy and interest rates are down, money is too tight to be spent. Riigggght. Just as Republican politicians say the fat years call for tax cuts, because the government can afford to release the people’s money then, and the lean years call for … what else? tax cuts, to stimulate the economy.

    Threaten these avaricious grabbers with spend-down mandates from Congress if they don’t do it voluntarily. Brute force is all they understand; they don’t listen to reason.

  2. Nonprofiteer Says:

    It appears that the biggest universities are falling over themselves to demonstrate their good faith (and thereby ward off the regulators) by increasing student aid. I’m a bit more concerned about the less noticeable offenders, e.g. Grinnell College, which often couple a substantial endowment with a determination to raise tuition as a means of demonstrating quality (“If we don’t cost as much as Macalester people will think we’re not as good!”). Regulation may be the only way to assure that institutions with lower profiles but fat wallets are as generous as the most well-known schools.

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