The five largest university endowments are those Harvard University, the University of Texas system, Yale University, Stanford University, and Princeton University. Each has assets worth more than $25 billion.
And these assets are growing, though not as quickly as they did in the past. In the financial year that ends on June 30, 2020, American colleges and universities grew their endowments by 1.8% after fees. That’s less than the 5.3% return that was seen the year before.
The National Association of College and University Business Officers and the asset management firm TIAA got these numbers by gathering information from 705 colleges, universities, and their affiliated foundations. Altogether, these schools had assets worth $637.7 billion. But the top endowments had billions of dollars’ worth of assets, while the middle endowment had only $164.6 million.
Endowments help universities get a return on their assets, which can then be used for things like research, salaries, or financial aid. In 2020, the average endowment gave out 4.59% of its assets, which was a little more than the 4.36% that endowments gave out the year before.
Here, we look in more depth at the five largest university endowments.
KEY TAKEAWAYS
- Harvard University, the University of Texas system, Yale University, Stanford University, and Princeton University have the five largest university endowments.
- In 2020, college and university endowments grew their assets by 1.8%, which was less than the 5.3% return they got the year before.
- Even though the best schools have billions of dollars, the average endowment has only $164.6 million in assets.
- In 2020, endowments gave out 4.59% of their money. This money went to important things like research, salaries, and student aid.
1. Harvard University—$41.9 Billion
Harvard University’s endowment is the biggest in the world. At the end of 2020, it had $41.9 billion in assets, which was 2.4% more than the year before. The endowment at Harvard is made up of more than 14,000 different funds that have been put together over the past 350 years.
In 2020, the fund gave the university $2 billion, which was 37% of its income for the year. Since 1974, Harvard Management Company has been in charge of the university’s endowment. About 36.4% of assets were put into hedge funds, which earned a 7.9% return. Public stocks made up 18.9% and gave a return of 12.2%, while private stocks made up 23% and gave a return of 11.6%.
2. University of Texas—$31.9 Billion
At the end of the 2020 financial year, the University of Texas system’s endowment assets were worth about $31.90 billion. This was 3.2% more than the year before.
The University of Texas/Texas A&M Investment Company is in charge of the system’s four major endowment funds, which are:
- Permanent Fund for Universities
- Permanent Health Fund
- Long Term Fund
- A fund that is invested separately
The Permanent University Fund helps the University of Texas, Texas A&M, and the smaller schools that are part of those systems.
The Permanent Health Fund helps pay for medical research, health education, public health, nursing, and treatment programs with the money it brings in.
3. Yale University—$31.2 Billion
In the 2020 financial year, Yale University’s endowment grew by 2.9% and had $31.2 billion in assets. The endowment gave the university $1.5 billion, which was about 34% of its income. The endowment’s return of 6.8% in 2020 is lower than its average annual return of 10.9% over the past ten years. The goal for the endowment is to put at least 30% of its money into low-risk assets like cash, bonds, and absolute return funds. About 23.5% of assets go to venture capital and 17.5% to leveraged buyouts.
4. Stanford University—$28.9 Billion
At the end of 2020, Stanford University’s endowment was worth $28.9 billion, which was 4.5% more than it was at the end of 2019. In 2020, the endowment gave $1.4 billion to the university, which is equal to 4.9% of its assets. The amount was equal to 22.3% of all the money the university spent. Most of the money from endowments goes to scholarships, fellowships, professorships, and other types of academic help.
Stanford Management Company, which also takes care of the university’s other assets, is in charge of the endowment. About 30.3% of the total assets of the university are put into private equity. 21% went to absolute return funds, 19% to international stocks, and 8% to real estate.
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5. Princeton University—$26.6 Billion
By the end of 2020, the endowment of Princeton University had grown by $440 million, to $26.6 billion.
Most of the endowment is run by the Princeton University Investment Company. From the year before, these endowment assets made a return of 5.6%. In 2020, the endowment gave the university $1.4 billion, which was 5.5% of the university’s total assets at the beginning of the financial year.
About 24.5% of the money from the endowment is used to help students. This means that the university can pay for all of a student’s tuition, fees, room, and board if their family makes less than $65,000 per year. About 24% of first-year college students get a Pell Grant, which is based on how much money they need. More than 61% of undergrads get financial help, and 83% are able to finish school without having to pay back any loans.