<p>I was wondering how exactly the endowment works.
Is Cornell's lower than other schools because the land around it is cheaper, or does it mainly reflect how many monetary gifts the schools gets? :0</p>
<p>hmm...good question.</p>
<p>I'm pretty sure it takes into account both. Cornell's a bit younger and doesn't have the endowment of HYP, but Cornell's endowment is still way above average (I believe somewhere around $3,000,000,000 (haha, I wrote out all the zeroes for dramatic effect). </p>
<p>It's more than enough to make the school run. However, Cornell doesn't have the money have a loan free financial aid program, like Princeton...</p>
<p>I'm not quite sure how much real estate is taken into account...</p>
<p>Alright, here's how it (basically) works. Alumni give money to the school. The school doesn't spend it immediately, because that'd be dumb. You would have to rely on a constant stream of donations. Think of it as a huge rainy day fund. They then invest the money in stocks or derivative funds or something that has a good return, and watch the money grow. They spend some of the returns, and reinvest the other. This is why some schools like Harvard give really nice financial aid packages involving only grants and scholarships, while others such as Brown give a lot more loans. It has nothing to do with the price of land around it, just has to do with a lot of Harvard alumni making a lot of money, and loving the school enough to sometime give their entire estates to it. Over the years, this adds up, especially with good investing decisions. For more, take a look at this: <a href="http://en.wikipedia.org/wiki/List_of_US_colleges_and_universities_by_endowment%5B/url%5D">http://en.wikipedia.org/wiki/List_of_US_colleges_and_universities_by_endowment</a> I don't know how accurate it is, but it's a general gist of what's going on.</p>
<p>I've read somewhere that the last money manager at Harvard did a really good job and doubled the endowment during his time.</p>
<p>the endowment is hundreds of "clumps" of privately donated money. some of the investment income from these funds goes to support a particular purpose (fund a prof's salary -- "endowed chair", maintain a building, general budget, etc.) the rest of the income goes to keep the endowment growing (being eaten by inflation). cornell's total endowment is decent-sized, but the endowment per student is very low. harvard, which has the largest total endowment, is able to pay about 30% of all its expenses using endowment investment income.</p>