Endowments are nearly always permanently restricted funds. Even interest from endowment income can be restricted for specific purposes per donors wishes. And university Boards are very conservative in general about how much income can be disbursed. At my institution it is less than 5% of investment income averaged over 28 rolling quarters.

Why does the existence of an endowment prevent a researcher from applying for government grants? Hiring staff with the funds. If the researcher loses their grant, why should there be a rainy day fund for that scenario?

So what, they are nonprofit clubs with lots of money, you’re not going to force them to spend that on you. This is not unique to schools.

Endowments get paid out to the salary of staffs. It rarely benefits the students unless the donor directs the $ to a specific cause

Anonymous wrote:This isn't a thread about whether what the government is doing with universities and colleges is good or bad. Can someone in the know explain to me why universities can't use their massive endowments for shortfalls in funds?

Why are universities presenting the options as either the government funds them to the same level as before (or higher) or they must cut faculty, strip their state of the art facilities, and kill the quality and amount of scholarship?

Columbia has a $15 billion endowment, but it's screaming about the $170 million the government has frozen and has effectively turned over its campus to ICE in order to avoid losing any more. Harvard has a $50 billion endowment, but it has frozen hiring allegedly because of "financial uncertainties."

Do these schools just not feel like touching their endowments? If so, what exactly are these endowments for?

To be used as slush funds and for money laundering purpose mostly by Dem politicians, their family, members, relatives, and friends.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:This isn't a thread about whether what the government is doing with universities and colleges is good or bad. Can someone in the know explain to me why universities can't use their massive endowments for shortfalls in funds?

Why are universities presenting the options as either the government funds them to the same level as before (or higher) or they must cut faculty, strip their state of the art facilities, and kill the quality and amount of scholarship?

Columbia has a $15 billion endowment, but it's screaming about the $170 million the government has frozen and has effectively turned over its campus to ICE in order to avoid losing any more. Harvard has a $50 billion endowment, but it has frozen hiring allegedly because of "financial uncertainties."

Do these schools just not feel like touching their endowments? If so, what exactly are these endowments for?

Let's say you have 10 dollars. Are you going to use all of your 10 dollars now? You might use 25% and the rest later or never.

If you don’t use the rainy day fund for a rainy day, what is it for?

You don't use it all for one "rainy day", leaving no reserve against future needs. You use the income, preserving the capital for the next need which may arise. Otherwise, it's one and done.

Anonymous wrote:

Anonymous wrote:This isn't a thread about whether what the government is doing with universities and colleges is good or bad. Can someone in the know explain to me why universities can't use their massive endowments for shortfalls in funds?

Why are universities presenting the options as either the government funds them to the same level as before (or higher) or they must cut faculty, strip their state of the art facilities, and kill the quality and amount of scholarship?

Columbia has a $15 billion endowment, but it's screaming about the $170 million the government has frozen and has effectively turned over its campus to ICE in order to avoid losing any more. Harvard has a $50 billion endowment, but it has frozen hiring allegedly because of "financial uncertainties."

Do these schools just not feel like touching their endowments? If so, what exactly are these endowments for?

Let's say you have 10 dollars. Are you going to use all of your 10 dollars now? You might use 25% and the rest later or never.

If you don’t use the rainy day fund for a rainy day, what is it for?

Anonymous wrote:This isn't a thread about whether what the government is doing with universities and colleges is good or bad. Can someone in the know explain to me why universities can't use their massive endowments for shortfalls in funds?

Why are universities presenting the options as either the government funds them to the same level as before (or higher) or they must cut faculty, strip their state of the art facilities, and kill the quality and amount of scholarship?

Columbia has a $15 billion endowment, but it's screaming about the $170 million the government has frozen and has effectively turned over its campus to ICE in order to avoid losing any more. Harvard has a $50 billion endowment, but it has frozen hiring allegedly because of "financial uncertainties."

Do these schools just not feel like touching their endowments? If so, what exactly are these endowments for?

Let's say you have 10 dollars. Are you going to use all of your 10 dollars now? You might use 25% and the rest later or never.

Columbia caved in fear of loosing funds. I wonder how much they could have generated if they ran a capital campaign so they wouldn’t have to be bullied.

Anonymous wrote:

Anonymous wrote:This isn't a thread about whether what the government is doing with universities and colleges is good or bad. Can someone in the know explain to me why universities can't use their massive endowments for shortfalls in funds?

Why are universities presenting the options as either the government funds them to the same level as before (or higher) or they must cut faculty, strip their state of the art facilities, and kill the quality and amount of scholarship?

Columbia has a $15 billion endowment, but it's screaming about the $170 million the government has frozen and has effectively turned over its campus to ICE in order to avoid losing any more. Harvard has a $50 billion endowment, but it has frozen hiring allegedly because of "financial uncertainties."

Do these schools just not feel like touching their endowments? If so, what exactly are these endowments for?

Once you think of universities as a hedge fund with an education side-hustle it makes a lot more sense.

This. Education is just a marketing expense for the hedge fund. The education administrators don't run the business.

Endowments, especially unrestricted endowments, can be used to generate income for current expenses. Many/all universities also conduct annual fundraising campaigns to solicit additional operating funds. The question is how those funds are actually being used.

Sometimes they are applied to infrastructure projects only tangentially related to core academic functions, e.g., athletic facilities. Sometimes they are applied to pay some or all of the tuition and fees for students who otherwise would opt for less expensive institutions or who would borrow money to pay the costs at the school they prefer to attend. Such funds are sometimes applied to boost the compensation of, and consequently attract and or retain teaching, research, or other staff who might seek other employment if not paid at high levels.

Endowment principal is not usually invaded; income is usually all that is used.

As noted, some institutions have plenty of endowment income. They just choose to apply it to "nice to have" purposes because other funding streams exist - those annual fundraising campaigns, federal grants, tuition actually paid by some students. Many schools don't want to require more students to pay their actual cost of attendance, as they fear that doing so will result in less "diversity and equity". Students will be obliged to attend schools they can afford.

I posted this is another thread. Endowments aren't just money...they are essentially mutual funds and universities can only withdraw a small amount each year AND they are often restricted as mentioned above.

It's not a savings account. It's one piece of the financial puzzle for higher education.

A lot of times the donated funds have specific contracted/obligated purposes. For example, my wealthy aunt donated a large sum to her alma mater, Brown, that can only be used to fund Alzheimer's research in their Center for Alzheimer's Disease.

My partner's stepmom just passed and her donation to UC Berkley was to the graduate Research Chemistry program, where she received her PhD and taught for several years.

Even though the endowments are large as a whole, the funds are disproportionally aligned throughout the university. Think of it like sports. Popular sports get lots of donations. Lesser popular sports get fewer donations and rely on grants to make up the difference. Same with academia. Popular departments and programs get higher donations and the lesser known get fewer and rely on grants and fellowships.

Is someone studying the penetrating power of microplastics on mice as important as someone studying the association of state minimum wage policy and community violence? That depends on your personal views. But one program definitely receives more donations than the other.

Endowments aren’t just a pile of slush fund money.

“A significant portion of an endowment is usually legally restricted by donors for specific educational or research purposes. At private institutions, an average of 55 percent of endowment assets were restricted.”
https://www.naicu.edu/policy-advocacy/issue-briefs/issue-briefs/endowments/

Anonymous wrote:This isn't a thread about whether what the government is doing with universities and colleges is good or bad. Can someone in the know explain to me why universities can't use their massive endowments for shortfalls in funds?

Why are universities presenting the options as either the government funds them to the same level as before (or higher) or they must cut faculty, strip their state of the art facilities, and kill the quality and amount of scholarship?

Columbia has a $15 billion endowment, but it's screaming about the $170 million the government has frozen and has effectively turned over its campus to ICE in order to avoid losing any more. Harvard has a $50 billion endowment, but it has frozen hiring allegedly because of "financial uncertainties."

Do these schools just not feel like touching their endowments? If so, what exactly are these endowments for?

Once you think of universities as a hedge fund with an education side-hustle it makes a lot more sense.

This isn't a thread about whether what the government is doing with universities and colleges is good or bad. Can someone in the know explain to me why universities can't use their massive endowments for shortfalls in funds?

Why are universities presenting the options as either the government funds them to the same level as before (or higher) or they must cut faculty, strip their state of the art facilities, and kill the quality and amount of scholarship?

Columbia has a $15 billion endowment, but it's screaming about the $170 million the government has frozen and has effectively turned over its campus to ICE in order to avoid losing any more. Harvard has a $50 billion endowment, but it has frozen hiring allegedly because of "financial uncertainties."

Do these schools just not feel like touching their endowments? If so, what exactly are these endowments for?