New endowment report out

Colleges and Universities A-Z University of Michigan
1

<p>The universities with the 20 largest endowments are:</p>

<p>Harvard University ±$30,500,000,000
Yale University ±$19,500,000,000
Princeton University ±$17,000,000,000
Stanford University ±$17,000,000,000
Massachusetts Institute of Technology ±$10,200,000,000
Columbia University ±$7,650,000,000
University of Michigan-Ann Arbor ±$7,600,000,000
University of Texas-Austin ±$7,300,000,000
Northwestern University ±$7,100,000,000
University of Pennsylvania ±$6,750,000,000
University of Chicago ±$6,570,000,000
University of Notre Dame ±$6,330,000,000
Duke University ±$5,550,000,000
Emory University ±$5,460,000,000
Washington University-St Louis ±$5,220,000,000
Cornell University ±$4,950,000,000
University of Virginia ±$478,000,000,000
Rice University ±$4,420,000,000
Dartmouth College ±$3,490,000,000
University of Southern California ±$3,490,000,000</p>

2

<p>Is there a list of endowement per student? It would give perspective.</p>

3

<p>NACUBO does not break it down on a per student basis, though I am not sure that doing so would help. “Perspective” as you put it, cannot be accomplished by naively and simplistically dividing the size of a university’s endowment by the total number of students. For example, comparing per/student figures between private and public universities is pointless since public universities receive a great deal of money from the state. Michigan, for example, receives ±$300 million from the state annually. A private university requires a whopping $6 billion of endowment to generate this amount of money. In other words, for a private university to match Michigan or Texas’ wealthy, it would require an endowment of ±$14 billion. </p>

<p>Furthermore, some universities, like Cal, Princeton and Texas-Austin to name a few, have no medical programs. Given the high expense of maintaining and running a major medical complex, those universities can do more with their endowments than universities that have them. </p>

<p>Additionally, private universities spend a lot more money from their endowment on financial aid because their tuition is so high for all students, while public universities are highly subsidized for instate students who make up more than 50% of the student body, and therefore allocate far less of their endowment to financial aid initiatives. </p>

<p>Another thing to consider is that large universities benefit a great deal from economies of scale, a factor that would not be captured in a per/student report of endowments.</p>

<p>There are far many other reasons why inconsistencies would arise from an endowment/student breakdown intended to put things in “perspective”.</p>

<p>Bottom line, it makes little sense to break down endowments on a per/student basis across the board because we would simply be comparing apples to oranges.</p>

<p>It does make sense, however, to break it down among universities with almost identical properties (size, source of funding, graduate:undergraduate ratio, size of professional programs etc…). For example, it makes sense to compare say Chicago, Columbia, Duke, Harvard, JHU, Northwestern, Penn and Stanford. It also makes sense to compare Michigan, UCLA, UIUC, UNC, Washington and Wisconsin-Madison.</p>

4

<p>I disagree. It’s not niave or simplistic to have data to evaluate.If you assume Harvard has more to spend than Princeton because it has a larger endowement you’d be wrong.</p>

5

<p>Endowment size isn’t something that really affects the day to day lives of undergraduate students. Few would say Michigan or Texas offers a noticeably richer undergraduate experience in terms of financial aid to undergrads, research opportunites, advising, social programming, special civic engagement programs, etc. compared to say Brown and Georgetown which have far smaller endowments (2.4 billion and 1 billion respectively). All 4 of these schools have their pros and cons.</p>

<p>I would say that any school that has an endowment over $500 million has enough resources to sufficiently take care of its undergraduates should they take advantage of the opportunities afforded to them. Beyond that, this is just another silly statistic that alumni of certain schools like Princeton use to claim a false sense of superiority over other schools.</p>

<p>

These schools have more resources than any individual student can take advantage of in a lifetime. Lets not grasp at straws to emphasize petty differences here.</p>

6

<p>I am not wrong rebel. Read my post until the end. Princeton has no medical school. It does more with each of its dollars than Harvard does. Comparing Princeton and Harvard on a per-student basis would be unfair to Princeton, even if its per/student wealth is significantly higher on an absolute scale. </p>

<p>Comparing Harvard and Stanford or Yale on a per student basis makes much better sense. Comparing public universities to private universities would be pointless. Trust me rebel, a per/student endowment listing across all universities would make no sense whatsoever. LACs should be listed separately from small private research universities. Large research universities should be listed on their own and public universities should be listed on their own too. Lumping them all in one file would be misleading.</p>

7

<p>I agree with Alexandre. Now its time for U of Michigan to show its “power of the purse” and give its OOS undergraduates the same amount of financial aid that say the lower Ivies and Duke offer to their enrolled st udents.</p>

<p>Why can Brown meet 100% of student need while Michigan can’t even though the latter is 4 times wealthier?</p>

8

<p>I agree goldenboy. Michigan is possibly wealthier than Brown even in relative terms at this stage. It is about to become significantly wealthier in the next 4 years as it completes its new fund raising initiative set to raise billions of dollars for Michigan’s bicentennial. I believe that by the time this initiative is completed in 2017, Michigan will meet 100% of student need for both instate and out of state students.</p>

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<p>That’s very exciting to think about. I hope you’re right, Alexandre. No U.S. university has ever done that for anywhere near that many students. Brown can meet 100% of need for all its students because it has fewer than 25% as many undergrads as Michigan has. Plus, Brown’s students are on the whole wealthier. At both schools, slightly over half of students are full-pays (the percentage of full-pays is actually a bit higher at Brown), but since COA at Brown is a uniform $58,140–about $5K more than OOS COA and around $31K more than in-state COA at Michigan, where roughly 2/3 of undergrads are in-state–there’s no question the student body at Brown is, on average, a lot wealthier to begin with.</p>

<p>It’s not so difficult to meet 100% of need for 100% of your students if you have a small number of students and most of them are wealthy. Like shooting fish in a barrel. It would be a far more impressive accomplishment for Michigan to meet full need for its much larger and more socio-economically diverse student body. I hope it happens; it would be a landmark accomplishment in American higher education.</p>

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<p>Keep in mind that these endowment figures may not be entirely accurate. Duke for example is the primary beneficiary of the $3 billion Duke Endowment (distinct from Duke University’s endowment). This means that its endowment is significantly larger than these numbers would have you believe. I’m sure something similar could be said in the case of other schools on the list as well.</p>

11

<p>kenyanpride, although most universities have ties to several endowments, they are not part of their own and have little to no say in how those external endowments are run. </p>

<p>The Duke Endowment was intended to serve the people of North and South Carolina. It is not accurate to say that Duke University is the primary beneficiary of the Duke Endowment. Most years, I have noticed that Duke University receives ±20% of the Duke Endowment grants. So if the Duke Endowment is worth $3 billion, Duke University is allocated roughly $600 million, which is by no means trivial. However, like I said, Duke University has little, if any, control over the Duke Endowment.</p>

<p>I think NACUBO is very accurate in that it lays out endowments that are within the control of the University.</p>

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<p>Gboy, Grasp @ straws?? What are you talikng about??To say that knowing how much the endowement, relative to school size is not worth knowing is the ultimate in nonsense. All data matters. A school like Princeton could choose to spend much more on aid vs. Harvard per student which has a larger total endowement.</p>

13

<p>rebel11, as a quant, I make a living analyzing investment data and trying to draw meaningful conclusions that could help improve investment performance, so I will weigh in on this topic. I agree with you, all data matters, but not all ways to use data are correct/meaningful.</p>

<p>There are a few things that you need to do before you can compare endowment/person

  1. Stratification
    Universities should be organized into sub-groups to ensure you are not comparing apple to oranges, examples are:
    a) Comparing endowment/person for a research powerhouse like Cal with a school that focus on liberal arts education like Brown makes no sense because the necessary spending per student is different by nature
    b) Comparing schools across different sizes make no sense because you are ignoring the economies of scale. Very simple example, you only need to pay for 1 university president regardless of how big your university is.
    There are a lot of examples of why schools across the board are apples and oranges</p>

<p>2) Adjustments
a) As others have mentioned, state universities have the state appropriation, which when assuming say a certain % rate of return is equivalent to a certain amount of endowment money
b) Government funding. Research university like hopkins get several billion in federal funding per year (for their medical research), thats equivalent to many billions in endowment money. Michgian gets about 1 billion, assuming an 5% rate of return, that’s equivalent to 20B of endownment. That alone is bigger than the endowment itself. Princeton gets about 200million, that’s about 2.5B of endowment. A good school like Williams College would get virtually none of that money.
c) Other revenue streams. Schools sell and license their innovations/patents and receive income from it. A school like northwestern received 180M from licensing last year, and that’s equivalent to 3.6B in equivalent endowment money. Michigan got about 40M, so only 800M in equivalent endowment money. Princeton’s amount is substantially smaller.
d) Cost of the area. 500M goes a much longer way in Ann Arbor or Austin than in say NYC. A school like columbia would have to pay a lot more for their upkeep (salary, maintenance etc) than a michigan, for the same quality in return, all else being equal.
e) Mix of students: Necessary spending on undergrads and grad students are not the same, and same with an engineering student vs an english student. The mix of students at a university determine its financial needs and effectiveness in spending.</p>

<p>I can go on and on and on and on, but there are so many reasons a plain comparison between endowment per capita is an extremely poor metric. It’s hard to make the above adjustments easily and objectively to make this metric useful.</p>

<p>But then as someone who makes a living analyzing data, I can tell you most metrics are horrible and tell a very small piece of the story, and that is why in the investment research field, we have something called the mosaic theory. You piece together a lot of small pieces and form your mosaic (big picture). Long story short, you have a small piece of the mosaic from endowment/capita (as you said, all data matters, but how much is the main issue), but you are using it as your full mosaic; that is the fallacy in your argument.</p>

14

<p>Bearcat, The problem with your whole Analysis is that I made no argument. It would be nice if you actually understood what you were opining on.My first post was to ask for more data, and the nonsense from people like you started.</p>

15

<p>Actually you did make an argument. So maybe it would be nice if you actually understood what you said.</p>

<p>“A school like Princeton could choose to spend much more on aid vs. Harvard per student which has a larger total endowement.”
That is an argument you made based on endowment/student. Fact is you don’t know one way or the other unless you adjust for every inconsistency.</p>

16

<p>^ Fact is that my first post made no arguments. I just asked a question.Then people like you started with paragraphs of DATA and arguments. Try reading my post again.</p>

17

<p>Has the endowment of Michigan grown in the past year much? It seems that these numbers are about the same as last year.</p>

18

<p>The last fiscal year was not the best for any colleges. The vast majority of universities actually saw a drop in endowment funds, Michigan included. Thankfully, this fiscal year is already looking much better as we have just crossed the big $8,000,000,000.</p>

19

<p>^^^That’s what I thought too KrongOmega. I heard that Michigan was over the 8 billion dollar amount quite a while ago. Not sure how “new” these figures actually are since there are no citations.</p>

20

<p>“Beyond that, this is just another silly statistic that alumni of certain schools like Princeton use to claim a false sense of superiority over other schools.”</p>

<p>Really? Wow! Certain alumni of Duke would NEVER do such a thing.</p>