When it comes to endowments, size matters
My alma mater made the news last week when Star Wars impresario and fellow graduate George Lucas gifted it -- the USC school of Cinema -- a whopping $175 million. That's the largest single gift in USC's history, and more than the entire endowment of my undergrad alma mater, respected but kind-of-poor Kenyon College. Which got me to wondering -- how much money is floating around out there in America's many-towered ivory landscape, and at a time when tuitions are high and rising, what's being done with all this bounty? Here are some facts.
- The most expensive college in the country, as of the '05-'06 school year, was George Washington University, charging $36,400 per year -- a 7% increase from the previous year.
- GW's endowment totals more than one billion dollars.
- The richest school in the nation, unsurprisingly, is Harvard, with a stunning endowment of $29.2 billion -- more than the GDP of Turkmenistan. The second-richest is Yale, with $18 billion.
- Because colleges prefer -- and are often required to -- spend an endowment's interest to improve educational quality, obscenely large endowments rarely translate to lower tuitions.
- In fact, because wealthy institutions can pump money into new buildings, programs, professorships and (sometimes) financial aid packages, they can enhance their academic brand -- allowing them to justify tuition increases.