<p>Over the last 20 years, from 1986-2005, Michigan's endowment has grown from $250,000,000 to $5,000,000,000. That's a 2,000% increase or a 15% per annum exponential growth. #2 was Duke University, whose endowment in that same period of time gre from $360,000,000 to $3,800,000,000. That's a 1,000% increase or 12% per annum exponential growth. In short, Michigan's endowment growth is far outpacing the neariest competition. Schools like Chicago, Columbia, Cornell, Dartmouth, Northwestern, Princeton, Vanderbilt and Washington University had endowment growths of less than 500% in that same time period. Brown and Cal grew by less than 250%. </p>
<p>At this rate, Michigan's endowment per student will surpass most of those schools' by 2010. </p>
<p>Here's the link. Scroll down to the bottom of the page. </p>
<p>Well, I don't know if that pace will continue once they end the campaign. Meanwhile, other schools will begin (or continue) theirs, so these kind of calculations (per students, growth rates, etc) may fluctuate.</p>
<p>Not to take away from U-M's achievement--it's great.</p>
<p>Hoedown, this is Michigan's second campaign in a decade. Campaigns of this sort aren't rare at Michigan and I have the feeling that Michigan will be going for yet another fund-raising campaign soon. </p>
<p>However, campaigns aren't the reason Michigan's endowment has grown so much. Michigan's endowment has grown so rapidely because like Duke, Harvard and Yale, they have developped a very aggressive portfolio. In fact, of the $2.5 billion raised in this last campaign, most of it is not going into the endowment. If I recall, only $800 million will be entering the endowment whereas the rest is intended to actually fund various programs and initiatives, including the building of half of the new, state of the art, $150 million Ross Business school. </p>
<p>The fact is, Michigan outpaced other universities in endowment growth by just as much in the 1986-2001 period as it did in the 2001-2005 period. So I really don't think this last campaign had that much of an influence over Michigan's incredible endowment growth. </p>
<p>I think the reason for the phenomenal growth of the University's endowment has to do with the fact that until the mid 1980s, state universities did not really bother developing their endowments because they depended on the then very generous state funding to run their then relatively innexpensive costs of operation. However, given the exponential growth in costs of attendence, research and faculty salaries, and the steady decline in state funding since the 1970s, Michigan and a couple of other state schools, most notably UVa, realized very early on that like Private universities, they would have to develop their endowments if they are to keep up in the future.</p>
<p>That's great, but the only reason the % is so high is because they started so small to begin with and began to solicit donations only recently.</p>
<p>Yale, which now has a $15+ Billion endowment and more money per student than almost any other institution in the world (including Harvard), is almost always considered to have the most successful endowment in recent history. Its returns have far surpassed all competitors. Endowment manager David Swensen is world famous because of what he has done with it.</p>
<p>I agree that Michigan's endowment starting lower than many other schools had something to do with its phenomenal growth. However, in 1992, Michigan's endowment was equal to those of Dartmouth and Brown. Today, it is twice larger than Dartmouth's and three times larger than Brown's. Michigan's returns have actually rivaled those of Yale. Michigan isn't going to catch up to Harvard, Yale, Stanford or even Princeton anytime soon mind you. But in terms of overall endowment, I'd say Michigan will probably be 5th in the next 5-10 years.</p>
<p>Michigan is already doing this. In recent years, many budget cuts on campus have also included strategies to move certain expenses and functions off the General Fund (which is what pays for instruction--and the coffers of which are largely filled by tuition and appropriations) and onto gift funds and endowment funds. That is using endowment monies to pay for things so more dollars can be used on educational activities independent of any tuition increases.</p>
<p>Similarly, they are upping financial aid funds as Alexandre noted. To boot, they are issuing a major challenge for the final portion of the campaign to get donors to contribute specifically to aid funds. </p>
<p>Michigan didn't get much press for it--and I'm still trying to figure out why-- but they have enhanced the MPact program so that we can offer the same deal to residents that UNC and UVa made the national press for (no loans for lowest income families).</p>