Can we watch the socialist comments, please.
http://www.investopedia.com/ask/answers/06/universityendowment.asp
Well, some want to ‘make college FREE!!’ Whoopee. The money has to come from somewhere and better to tax colleges who don’t spend 5% of their endowments (which was Grassley’s proposal) than to tax the middle class.
Can you explain what management fees have to do with financial aid budget? In order to make $2B profit on their portfolio they have to pay $500mil in fees. If they do no pay these fees they will not have $2B profit. These fees are not David Swensen’s salary. He is making a few millions/year and is grossly undercompensated for what he does. He was offered many times to start his own hedge fund and he declined. He is responsible for outsized endowment at Yale and also in many other universities where endowments are managed by his former junior colleagues. He freely shares his investment methods. One can argue that he is the singular reason for improved finaid in these universities.
How about universities that mismanaged their endowments. Maybe they should be abolished?
Taxing the endowments wont make college free. I recall that students spend about $75B a year or so collectively (someone feel free to correct that if they have a reference) Taxing the huge endowments at 100% would wipe them out and only pay for a handful of years of free tuition. Yes, I think the endowments are a little on the big size. Relative to the rest of the free world, my house is a little big - but it’s mine and it’s what I want to do with my money. Same for colleges. Folks donate money, and the schools hang onto it. It’s their money, they can do with it what they want. I don’t want anyone telling me I spend my money wrong, so I won’t do it to anyone else.
As for Gates and company giving their money away - much of that is going to end up in an endowment, so it’s really not any different than the college endowments.
Because it’s boring and small minded to only focus on yourself, you should know, since you seem to believe holistic admission is better for society. In any case I did say (again) that these schools can keep their HA and country club, just extend the same need based aid to those not deemed “holistic” enough but have the grades to get in, incl. all the kids on their waiting list. A big gift to these kids, chump change for these schools. What’s your beef with that?
If these schools really are as great at developing future leaders as everyone seems to think, then they’d take the smart kids with the least leadership potential and groom them into leaders. In fact, it would be even more impressive if they accept only those “at risk” kids from inner city schools and groom them into real scholars and leaders.
Alas, they aren’t able to do that, which is why they focus on admitting those already have the right family connections, rubber stamp their diplomas then get the credit for their success, while throwing a few bones to the AA beneficiaries to silence the critic, and a few of those greasy grinds from Stuy and Bronx Science to boost their SAT averages. Country clubs are not illegal, but none of them are tax free.
The problem with this part of the proposal would mean that the Ivies would end being mostly Asians, the lingua franca would be Mandarin and Korean, the athletic teams would totally suck (although the orchestras would have deep bench strength at the violin position), diversity would go out the window (blacks and Hispanics would be rare), and everyone would crowd into pre-med classes with virtually no one in liberal arts. US universities are not like Chinese universities (which have a single test and anyone who gets above a certain level, gets in – although even there discrimination into the tippy top universities works by score) and the Asians just can’t seem to get over that fact. The incredibly poor alumni support and alumni donor donations from the Asian community (bar the usual few high profile examples) make universities think twice about admitting kids who don’t care anything about where they are, just that they “got there.” If there is discrimination against Asians, it is wholly institutionally justified, if not indeed necessary to preserve the character and mission of the very universities that do the discriminating.
You don’t say. I’m beginning to think Obama should just stop beating around the bush and declare the Ivy League Religious Institutions. The fervor and loyalty of their worshipers sometimes borderline fanatical. Imagine all these people who spend a lifetime worshiping at their altar, first doing whatever they can to become members of these institutions, then spreading their message(liberalism) far and wide, defending their perch atop the pantheon of elitism anytime they feel it’s under threat and giving generously to ensure their eternal glory. Rumor has it their graduates will even continue on to a special corner in heaven after they die, such is the power of the Ivy League.
Let’s declare them religious institutions and be done with it, this way they can enjoy tax-exempt status to all eternity without any further harassment from the infidels.
@cmsjmt - are you under the impression that this is the only president to have a lot of Ivy Leaguers in his administration?
More so than any other president for sure.
If the Ivies lost their tax-exempt status what would the impact really be?
A much better solution would be to require the schools to increase their payout. Require them to spend 6 or 7% of the endowment every year, which is more than they spend now. Whether they spend it on financial aid, research, facilities etc. is up to each of them. However, they will still be using it to make improvements in educational opportunities for current students and faculty, which is much better for everyone than hoarding it forever. There is no reason to give them tax-free status on the endowment if they are only going to hoard that money forever and not spend it to improve education.
The reason that they don’t spend more now is that they want to be conservative since they do not know what will happen to their investments in the future, so they tend to keep spending low and accumulate assets. It looks like they need a nudge to spend a bit more of for its intended purpose: to enhance current education at their institutions.
Endowments are also to ensure continued existence. Spending at or higher than current return on investment defeats this purpose.
Continued…existence? Existence is for the scrappy public institutions. The hoarders are looking for eternal glory, like the Sistine Chapel.
Really? How many does he have, compared to Bush or Clinton or other Bush?
Is this devolving into tippy top hatred? Because that sounds equally “boring and small minded.” Think about it.
Do you have any sources to back up your assertion Asians are stingly alumni donors? I find that very strange considering most folks I know who worked in admissions and financial aid have stated that if one controlled for the SES level, that Asian/Asian-Americans who are able to make generous donations do so at the same or higher levels than their WASP counterparts.
I also find it interesting considering at the Cambridge In America event for Cambridge U alums in NYC* some years back, the vice-chancellor actually stated their most generous donors are international grad school alums from Asia and the US whereas the lack of alumni giving culture among most native-born British families…including wealthy ones is one reason why Cambridge has had a tiny endowment compared with their elite private American counterparts. It’s one reason why she stated they’ve found it helpful to hold alumni events in the US and in various Asian countries.
- Attended at the invitation of a friend who is himself a Cambridge U grad student alum.
Bring out the “hater” argument when you run out of arguments.
Well, it seems that anyone that defends the endowments get met with the ‘liberal’ response of - but they have so much money ! It’s not fair!
Seems nobody can be happy here.
No, I’ve been with this thread all along.
That’s why I always say the Ivies+SM should be 100% URM, since studies have shown URMs benefitted more than any other group from having gone to an elite school. It’ll also make it less intimidating for them to go into STEM with less competition from those test obsessed greasy grinds from Stuy or Bronx Science. This should continue until income of blacks is at parity with whites.
Cmsjmt, I get it. These schools have lots of money and you want to have control over it.