You don’t spent an endowment, you spend the interest. The entire research budget comes from outside funding. In Cornell’s case, the research funding amounts to $1B a year.
Just for perspective, the annual research budget of a university I looked at the numbers for recently (not Cornell, but R1) would go through that in less than two decades, even if it were completely dedicated to research and nothing else.
Tech transfer is an important function, however, tech transfer offices outside perhaps the top 15 or 20 in the US (public and private) are not profitable in terms of dollars. AUTM (tech transfer trade group) has extensive data on the subject.
Still I can't work up a tear for universities with large endowments when the top 10 universities sit pretty on 304 billion dollars out of 840 billion total, while charging insane and exponentially rising tuition fees.
and you're assuming they invest like you do in your 401k or whatever. which they most certainly don't. some are more aggressive w.r.t. private markets investment but many focus on capital preservation and don't grow as much as you'd expect. FY24 Cornell's endowment returned something like 8%. this despite an S&P500 gain of, what, 23% ish.
institutions and allocators operate with a very different mindset versus individuals or hedgies.
Uncle Sam doesn’t have a credit limit: Uncle Sam has chosen to take on debt so rich people can avoid paying taxes. If we had rich people pay at the same rates they paid a few decades ago, didn’t have caps on the maximum amount of taxable income for social security, etc. we could return to the balanced budget we had at the turn of the century before the Republicans lowered taxes for the express political goal of forcing program cuts.
Can you really not think of any ways that our economy is different from those? For example, were either of them the largest economy in the world operating the global benchmark currency? Were their debts voluntary, incurred solely to allow the richest people to pay less in taxes?
How about Uncle Sam starts taking money back from rich people instead of foisting more debt on workers and slashing my benefits so that they can buy another yacht?
And what?
You know that for example endowment funds have restrictions on what they can be spent on.
This is really victim blaming.
I would not have an issue if the government has said that for future grant rounds there will be limits on overheads, but this lot just decided they cut already agreed and planned budgets and no matter the consequences.
To be invested and generate returns which can fund the university's programs. As I said in another comment, it's a long-term investment, not a spending fund. You don't eat your seed corn.
> In particular, the endowment supports roughly two-thirds of the budget for undergraduate and graduate financial aid, as well as a significant portion of faculty salaries, research, and key programs like libraries and student services.
The returns from the endowment are used to support university programs. The endowment itself is not spent - it's a long-term investment which produces dividends, not a spending fund.
Universities will dip into endowment funds if the returns are worse than expected. They will pretty much never make plans to dip into endowment funds, though.
Money in university budgets is most certainly not fungible. Endowments are for the most part directed for specific uses and cannot be used outside of the restrictions. Education and General (E&G, terminology varies between institutions) includes tuition (only part of the yearly budget) and cannot be used for research. Unrestricted funds are as rare as hens teeth and doubly so outside upper admin.
The “color of money” is perhaps the most misunderstood aspect of university admin but explains so much about how things operate.
To be fair, I hear the Ivies have extremely generous scholarships (probably amortized by the nepotism acceptances). Much fewer people of financial need are graduating these schools in massive debt.
I’m fine with that if the government also levies an 80% total asset tax on high net worth individuals over $5 million, and uses all this money to adequately fund free education for all.
