Elite University Endowments

Tangentially related question: Why do universities like Harvard (who has a ~$60bn endowment) get federal funding at all? Between tuition and donors are they not profitable?

Why cant universities fund it with their billion dollar endowments?

Bothered by harvard having a tax free endowment or all universities ?

Malcom Gladwell did a whole podcast series on this, season 2 of Revisionist History. But the idea is that some colleges like Yale, Harvard, Stanford have mega endowments that mean they can almost never lose money. Some rich people make huge multi million dollar donations just to make big headlines, but some small state college with a tiny endowment could have used that money across a much broader range of students.

How big is their endowment? Why do people donate to universities when they squander money like this?

Harvard could easily build that out of their own $40,000,000,000 endowment, if their first priority was actually education, rather than protecting their own prestige and the value of their credentials to the elites they mostly serve.

Harvard's endowment is $50 billion, and its expenses in 2023 were $6.25 billion [1]. To fund that, the endowment will need 12.5% annual interest, which is impossible. Tuition revenue is not remotely suitable enough for Harvard's operational expenses.Again, people don't understand how endowments work. When endows a specific program at Harvard, their money must be used for that program alone. The funds can't be sent to the general pool for the entire university.There are

It's not bollocks, the endowments are contributions that have constraints on their spending. They cannot legally redirect much of the endowment towards these researchers in the way you want. Instead, they use the endowment as an investment that produces interest which is spent on operating expenses.

I forgot where (Greenspun, I think) but the gist was that non-profits must disburse 5% of their endowment each year but these mega$$$ universities were doing more like 3.5%-5%. It's worth giving away free tuition to some middle class kids to maintain that status. Some of the endowments (Yale, Harvard, Standford, etc) are so big that they're basically investment funds that run universities in order to avoid paying taxes.

If you want Harvard to be an elite liberal arts college, then sure they'll be fine. If you want them to be an elite research university that does some of the best medical and scientific research in the world, then they will absolutely not be fine. That research is funded largely by the federal government, and we as a society have received enormous benefits from it.Also, gifts to endowments are typically restricted and cannot legally be redirected at will to pay operating expenses. The wh