<p>So here's the big question, how does the amount of money an institution has affect the overall quality of that institution at the ugrad level</p>
<p>The easy answer is to say that they are directly lineked, because the Harvard and Yale, the top two colleges, also are the top two endowed colleges. </p>
<p>However! It is not that simple. Let's take Stanford vs. Berkeley. Stanford has an endowment of like 15 billion, whereas Berkeley has a little over 2 billion. The overall amount of endowment per student rates Stanford as 11th, and Berkeley isn't even ranked. Yet, Stanford is not THAT much better than Berkeley. It is better arguably, but not by the level dictated by endowment. Also, a college like Rice has a higher per student endowment than Stanford, but no one would argue that Rice is better than Stanford at any level. </p>
<p>Therefore, there must be more at play than simply endowment and money that leads to the quality of an institution.</p>
<p>barrons, what do you mean it would take 10 billion to equal 500 million? and about the earlier comment, stanford is ranked 4, berkeley 21, honestly, that is not that much of a difference, plus berkeley has just as good of a grad program, which is still pulling its money from the same endowment.</p>
<p>take another example, Cornell has a very low endowment per student (4.3 bilion spread over 13000 ugrads + 5k grads...) but yet, it is still a world class institution. Most people would rather go to Cornell than Rice or than Emory....</p>
<p>true, though Cornell also receives millions and millions of dollars a year from the state just to do research. Currently, they're working on a $4billion dollar campaign to increase endowment as well.</p>
<p>really gomestar, they want to almost double their endowment, wow, do you have any sites that talk about this. thats quite interesting. </p>
<p>my main point is just that your right, money does have something to do with overall quality, but its not the only factor. there are other factors I guess like the how well you are budgeting that affect as well. also, strength of faculty and stuff too (which also sort of stems from money though....).</p>
<p>In actuality, the endowment doesn't do anything. Revenue generated from the endowment appreciation are usually small compared to the school's overall revenue.</p>
<p>Brandeis was founded in 1948, so naturally its endowment is lower than that of comparable but much older institutions. Here is an article from the student paper about what a recent increase in endowment has meant for them:</p>
<p>Well when you have $20 Billion and earn the 10-15% most are getting these days, that's a BIG chunk of annual spending. But most save much of the gain to add to the endowment and only spend at around 5%.</p>
<p>There's a lot of (mis)information provided here... I think I agree mostly with mikemac when he says "correlation does not imply causation". </p>
<p>At any rate, here's a recent Bloomberg article from Dec. 4, 2006 that discusses fiscal performance for top college endowment funds. It also provides a listing of the top 25 endowments, as of June 2006, that should at least give some reasonably accurate information on size of endowments at these schools:</p>
<p>The only misleading thing about that is the reported gains usually include new funds added through fundraising which inflates the return number.</p>
<p>That may be true; however, if the method applied is uniform for all institutions, then the reported gains (if not actual true ROI gains from existing principal funds) will reflect accordingly across the board for all schools. I'm sure that if one were interested, all of the new development funds could be backed out of a college's net endowment fund to get a more accurate representation of investment gains. All the same, you have to admit that MIT, Yale and Duke (at 23%, 22.9% and 20.2%, respectively) are impressive in their accomplishments. For Yale to have back-to-back years in realizing gains of 22%+ annually is phenomenal.</p>
<p>As a parent whose daughter attends Emory, I track them more carefully, and it's fascinating to have seen how they've dealt with the constraints in their portfolio of Coca-Cola stock... divesting for diversification in an attempt to stabilize the endowment fund and to minimalize impact from the roller-coaster ride of a specific holding. Ironically, Coke stock has gained 21% in the past 11 months, so go figure. Additionally, for Emory, it helps to have the kind of benefactor such as the Woodruff Foundation, whose most recent donation last month amounted to $261.5 million, primarily aimed toward Emory Healthcare and Clinic.</p>
<p>Yes, but it makes us earning 10% actual ROI feel like chumps. If I added the money I put into my 401K as return rather than a contribution I'd be making over 20% too. My school's endowment went up about 100% over the last three years but much of that was fundraising income. Actual return was around 10%. Must be nice to have a $20 Billion cushion.</p>
<p>To the OP's question: Perhaps one way to think of having a large per-student endowment is that it's kind of like having a bit more discretionary spending money. Colleges are faced with all sorts of choices about what to spend money on: scholarships for students; capital improvements; more faculty; new programs; technology; support for research; and on and on . . . Colleges with small endowments are sometimes really good at targeting their limited funds in smart ways. But no matter how smart or thoughtful an institution is, it'll always be hard to compete with places like Harvard, who can increase spending on lots of fronts at once and not make as many hard choices between competing priorities; large-endowment institutions can also take risks that a poor peer couldn't, and they can lure good faculty with promises of more money; a fanicier lab; more assistants or travel money, etc. None of this is a guarantee of quality for any individual student, but over time, it does produce differences.</p>
<p>As far as I can tell, outside of the furthest cutting edges in science and medicine, the thing high endowments mostly seem to correlate with is really bad architecture.</p>