Dive Brief:
- The Endowment Trust asks universities to consider increasing annual endowment spending by less than a percent — about $418 million collectively — to help cut college costs for low-income students by nearly $8,000 per year.
- Critics say that hard line budgeting for endowment spending jeopardizes future spending needs, and that fluctuations in endowment investments do not always allow change in spending strategy.
- College executives frequently target research, civic service and improvements and industrial development for endowment funding.
Dive Insight:
Endowment spending typically allows universities to commit resources to real estate, healthcare and economic development in the cities around them, like Johns Hopkins University's mixed-use plans for east Baltimore, and Hampton University's development of a freestanding proton therapy cancer treatment center. Because of the costs associated with developing and sustaining these projects, it is difficult to project that funding of endowments, which are commonly believed to be one big investment fund, can pivot to different projects or causes every year.
University officials can do more to educate the public about the function of endowments, especially as government officials are becoming more aggressive about public disclosure of the nation's larger university endowment funds.