At $26 billion, Harvard's endowment is larger than the GDP of many countries. In 2004 Harvard raised $590 miilion in donations. Yet, it only spent 4.5% of its endowment in 2004. Yale, with an endowment of $12.7 billion and an average annual return of 17.4% on that endowment over the past ten years, spent the same 4.5%. Very few of the colleges with huge endowments spend as much as 6% of their endowments each year.
The feds require foundations to spend at least 5% of their capital each year as they don't want the foundations to hoard their cash. However, there is no similar regulation for colleges and universities; they can keep as much of their endowment as they wish.
I can't help thinking that Harvard and other financial behemoths of the educational world are more interested in buildings and hoarding than in education.
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