Too Much Money

There’s something about a nearly $35 billion endowment that just keeps Congress coming back. A decade ago, as lawmakers eyed legislation to require the richest colleges to spend more from their endowments, the Ivies and their counterparts bought time by voluntarily increasing financial aid for undergraduates. Then the financial crisis hit, the endowments sank in value, and the debate quieted down. Now, after six years of strong returns, college endowments are flush again, with Harvard University still leading the pack at $35.3 billion. And they’re ripe for another round of attacks.

Victor Fleischer, a professor of law at the University of San Diego, kicked off the endowment-bashing this year with an August opinion piece in The New York Times. He opened with a startling statistic: Yale University paid about $480 million to its private-equity managers in 2014, nearly three times the amount that the endowment paid out for tuition assistance, fellowships, and prizes... An often-cited benefit of endowments is the cushion they provide during downturns. But Brian Galle, a professor at Georgetown University Law Center who studies endowments and taxation, testified at the hearing that Harvard has taken its "rainy day" account to an absurd extreme. The endowment could cover Harvard’s entire budget for 12 years, Mr. Galle said...

Full story at https://philanthropy.com/article/College-Endowments-Are/234363

An often-cited benefit of endowments is the cushion they provide during downturns. But Brian Galle, a professor at Georgetown University Law Center who studies endowments and taxation, testified at the hearing that Harvard has taken its "rainy day" account to an absurd extreme. The endowment could cover Harvard’s entire budget for 12 years, Mr. Galle said. - See more at: https://philanthropy.com/article/College-Endowments-Are/234363?cid=pm&utm_source=pm&utm_medium=en&elq=cc19118131da4073ae20d037f80753fb&elqCampaignId=1961&elqaid=7063&elqat=1&elqTrackId=0d265e71776c4231a36887fa2774b0ef#sthash.tHrbLfuW.dpuf