Many institutions of higher education in the United States maintain

financial endowment A financial endowment is a legal structure for managing, and in many cases indefinitely perpetuating, a pool of financial, real estate, or other investments for a specific purpose according to the will of its founders and donors. Endowments are o ...

s—sums of money that are invested in

stock In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a compan ...

s, yielding

returns Return may refer to: In business, economics, and finance * Return on investment (ROI), the financial gain after an expense. * Rate of return, the financial term for the profit or loss derived from an investment * Tax return, a blank document or t ...

that fund a portion of an institution's operational expenses and help ensure it survives in perpetuity. U.S. colleges and universities maintain some of the largest endowments in the world, and make up the strong majority of educational institutions with endowments greater than $1 billion. The National Association of College and University Business Officers (NACUBO) maintains information on college endowments. In 2005, the endowment table totaled $219.37 billion. By 2015, the table totaled $394.96 billion, an increase of 80%, and in 2018, the total further increased to $479.23 billion. , the total stood at $854.11 billion, with an average across all institutions of $1.1621 billion and median of $2.0102 million. Strong returns in

fiscal year A fiscal year (or financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many ...

2020-21 led the largest university endowments to soar. The four largest endowments —

Harvard Harvard University is a private Ivy League research university in Cambridge, Massachusetts. Founded in 1636 as Harvard College and named for its first benefactor, the Puritan clergyman John Harvard, it is the oldest institution of higher le ...

Yale Yale University is a private research university in New Haven, Connecticut. Established in 1701 as the Collegiate School, it is the third-oldest institution of higher education in the United States and among the most prestigious in the wor ...

Stanford Stanford University, officially Leland Stanford Junior University, is a Private university, private research university in Stanford, California. The campus occupies , among the largest in the United States, and enrolls over 17,000 students. S ...

, and

Princeton Princeton University is a private research university in Princeton, New Jersey. Founded in 1746 in Elizabeth as the College of New Jersey, Princeton is the fourth-oldest institution of higher education in the United States and one of the nin ...

— increased in value from $127.24 billion to $171 billion in a single year.

Enhancements and levies

The tabulated data below are from NACUBO. Some universities benefit from endowments that are not under their direct control but which are nonetheless dedicated to the welfare of one or several institutions. Examples include The Duke Endowment, the

Robert A. Welch Foundation The Welch Foundation, based in Houston, Texas, is one of the United States' oldest and largest private funding sources for chemistry researchers. It is a non-profit organization named for Robert Alonzo Welch, an industrialist who provided the funds ...

, and the

Roy J. Carver Charitable Trust The Roy J. Carver Charitable Trust is a philanthropic group dedicated to the state of Iowa and, to a lesser extent, Illinois. It disburses about $15M annually. Most of the funding is directed to education and to biomedical research.{{cite web , u ...

. In 2017, a federal

endowment tax Endowment tax is the taxation of financial endowments that are otherwise not taxed due to their charitable, educational, or religious mission. Endowments can be up to several billion dollars at some universities, some charitable foundations, and ...

was enacted in the

Tax Cuts and Jobs Act of 2017 The Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, , is a congressional revenue act of the United States originally introduced in Congress as the Tax Cuts and Jobs A ...

in the form of an excise tax of 1.4% on institutions that have at least 500 tuition-paying students and net assets of at least $500,000 per student. The $500,000 is not adjusted for inflation, so the threshold is effectively lowered over time. The endowment tax provision of the Tax Cuts and Jobs Act has been criticized as funding tax breaks for corporations and the wealthy at the expense of education. Critics note that the tax could threaten financial aid for low-income students, stifle social mobility, and obstruct life-saving research. There continue to be vigorous efforts that advocate the repeal of the tax. Repeal legislation with bipartisan cosponsorship was introduced, but not passed, by both the

115th United States Congress The 115th United States Congress was a meeting of the legislative branch of the United States of America federal government, composed of the Senate and the House of Representatives. It met in Washington, D.C., from January 3, 2017, to January ...

and

116th United States Congress The 116th United States Congress was a meeting of the legislative branch of the United States federal government, composed of the Senate and the House of Representatives. It convened in Washington, D.C., on January 3, 2019, and ended on Janu ...

Endowments greater than $1 billion

Private schools

Yale Law School in the Sterling Law Building

Public schools

University_of_texas_at_austin_main_building_2014

Endowments per student greater than $2 million

References

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Endowment Endowment most often refers to: *A term for human penis size It may also refer to: Finance * Financial endowment, pertaining to funds or property donated to institutions or individuals (e.g., college endowment) *Endowment mortgage, a mortgage to ...

Financial endowments Education finance in the United States