Jun 12, 2022
The University of Harvard, Yale University, University of Texas, Princeton University, and Stanford University have the five largest university endowments. Each has assets worth more than $25 billion. And these assets are growing, though not as quickly as they did in the past. Overall, the endowments of American universities and colleges grew by 1.8% total of charges in the fiscal year that ended on 30th June 2020. That is less than the return of 5.3% from the previous financial year. Endowments help universities get a profit on their assets, which could then be used for things like salaries, research, or financial help. Here, we look more closely at the top 5 largest university endowments.
Harvard University has the biggest endowment in the world. At the end of 2020, it had $41.9 billion in assets, an increase of 2.4% from the previous year. The endowment at Harvard comprises more than 14,000 different funds that have been put together over the past 350 years. In 2020, the fund gave the university $2 billion, 37% of its total annual income. Since 1974, Harvard Management Company has been in charge of the university's endowment. About 36.4% of assets were put into hedge funds, which gave a 7.9% return. Public equities made up 18.9 percent and gave a return of 12.2 percent, while private equities made up 23 percent and 11.6 percent.
At the end of the 2020 financial year, the University of Texas system's endowment assets were worth about $31.90 billion. This was 3.2 percent more than the year before. The University of Texas Investment Firm is in charge of the organization's four key endowment funds, which are:
The Permanent University Fund helps the University of Texas, Texas A&M, as well as the relatively small schools that are part of those systems. The Permanent Health Fund helps pay for medical studies, education programs, public wellness, nursing, as well as treatment centers with the money it brings in.
In the 2020 fiscal year, Yale University's endowment grew by 2.9% and had $31.2 billion in holdings. The endowment gave the university $1.5 billion, about 34% of the university's income. The endowment's profit of 6.8 percent in 2020 is lower than its mean yearly return of 10.9 percent over the past ten years. The goal for the endowment is to put at least 30% of its money into low-risk assets like cash, bonds, as well as ultimate return investments. About 23.5 percent of assets go to venture funding and 17.5 percent to leveraged buyouts.
Just at the close of 2020, the University of Stanford's endowment was worth $28.9 billion, 4.5 percent more than it was at the close of 2019. Throughout 2020, the endowment gave $1.4 billion to the university, which is equal to 4.9 percent of its assets. The amount was equal to 22.3% of all the money the university spent. Most of the money from endowments goes to scholarships, fellowships, professorships, and other types of academic help. Stanford Management Company, which also takes care of the university's other holdings, is in charge of the endowment. About 30.3% of the total assets of the university are put into private shares. Unlimited exchange funds made up 21%. International stocks made up another 19%, as well as estate made up 8%.
By the finish of 2020, the endowment of Princeton University had grown by $440 million to $26.6 billion. Most of the endowment is run by the Princeton University Investment Firm. From the year before, such endowment assets made a return of 5.6%. Throughout 2020, the endowment gave the university $1.4 billion, equal to 5.5% of its total capital at the beginning of the financial season.
About 24.5 percent of the money from the endowment is used to help students. This means that the university can pay for a student's course fees, charges, room, and board if their family makes less than $65,000 annually. About 24% of first-year college students get a Pell Grant, which is based on how much money they need. Over 61% of undergrads get financial aid, as well as 83%, are capable of completing school without any debt.
The worth of college endowments, investments made with donated money, and other assets could be very different. Some endowments in higher education are in the low millions. Still, the largest one is bigger than the GDP of countries like Uganda, Bolivia, and Nepal, according to information from the World Bank 2020. Endowments frequently come with rules about how the money can be used. This means colleges can only use the money in certain ways, usually to keep investing in the organization's future to further its mission and keep it running because it can satisfy children's future.