The Debate Over College Endowments & How to Cover Them
The nation’s private and public universities own endowments that together total more than half a trillion dollars – tax-free investments that schools use to sustain their long-term financial health. While Harvard and Yale combine to make up more than a tenth of that total, thousands of colleges’ endowments contribute to that pie. No matter the size of their endowment, though, colleges typically spend only around 4-to-5 percent of it each year, spurring criticism they’re not doing enough to enroll more low-income students with the tax-free funds these institutions have. Defenders argue colleges must be prudent with their investments to withstand fiscal shocks. As journalists, how should you cover your schools’ endowments? What documents should you examine to acquire a better sense of how much of your colleges’ endowment spending goes toward low-income students? And what questions should you be asking college business officers?