Donations to higher education have soared in recent times, along with concerns about how the money is being used.
Endowments & Foundations
As a growing number of private foundations adopt a social justice agenda, their higher education grants reflect broad societal concerns.
U.S. colleges and universities hold more than $500 billion in endowment assets, but many people have a poor grasp of these assets’ purpose and value.
In an era of declining public funding, private philanthropy has played an increasingly vital role for both public and private institutions.
Over the past decade, foundations and other entities awarding higher education grants have shifted their focus toward programs that encourage student retention and graduation, particularly for low-income and first-generation college students.
Can a university’s characteristics be a better indicator of an endowment’s effectiveness than endowment size?
This paper summarizes a survey of university endowment funds, with a particular focus on the composition of endowment investment committees and how this composition is associated with a number of key activities. In general, we find that the typical investment committee member has financial credentials of some form and has experience as an executive or serving on other boards. We also find that most investment committee members are themselves donors to the university.
In 2007, Davidson College became the first private liberal arts college to offer its students a financial aid package that meets 100% of their demonstrated need without any loan component. The Davidson Trust has increased the access to Davidson College of students from lower and middle-income families, contributing to a more economically diverse student body. Pre-Davidson Trust, need-based financial aid was accorded to approximately 33% of Davidson students; post-Davidson Trust, an average of 45% of entering students is qualifying for need-based aid.
Endowments are stocks of financial and real assets held by colleges and universities to generate income for current and future operations. Donors often place specific restrictions on the use of their gifts. An endowment’s portfolio must be allocated for long-run investment returns and also for short-term liquidity to meet cash flow needs, but this has proven challenging in the current economy.