The nation’s wealthiest private colleges and universities have a new expense. Thanks to a provision in the tax reform package that President Donald Trump signed in late 2017, these schools are paying a 1.4% tax on their net investment income. This highly targeted tax only applies to schools with endowments worth at least US$500,000 per tuition-paying student. One aspect […] … learn more→
Tag Archives: endowments
A new tax on big college and university endowments is sending higher education a message
GOP plan to tax college endowments like Yale’s and Harvard’s would be neither fair nor effective
Tucked away in the recently announced GOP tax bill is a small item you may have missed: a new tax on university endowments. As I have spent decades working in higher education, the proposal immediately piqued my interest. Colleges create endowments by raising funds from alumni, companies and other donors, invest the money in stocks, bonds and other […] … learn more→
What Berkeley’s budget cuts tell us about America’s public universities
The University of California at Berkeley recently announced a financial restructuring due to mounting structural deficits, including a US$150 million shortfall in the current budget year. All areas of university’s operations – academic, administrative and athletic – will likely face spending cuts. Higher education experts have begun to ask if Berkeley can stay Berkeley. From […] … learn more→
How should we measure the size of a university’s endowment?
Congress is rattling its saber at colleges and universities with endowments worth U$1 billion or more. Committees from the House and Senate have sent a joint letter to 56 private colleges and universities, asking for comprehensive information about endowment spending and management policies. Thomas W. Reed, representative for New York’s 23rd Congressional District, is talking […] … learn more→
Universities can keep their money,just tax them
Victor Fleischer wrote a New York Times op-ed today pointing out the absurdity of Yale’s endowment paying more in fees to hedge fund managers than student assistance. He proposed that given the rate at which endowments grow, colleges should be required to spend a larger percentage of their endowment on improving the schools and helping […] … learn more→
Higher Education: The right kind of philanthropy
Earlier this month Harvard University announced a $400 million donation to its engineering college, as part of a $6.5 billion fundraising goal for its comprehensive campaign. Harvard’s endowment stands at $36 billion, with its total wealth estimated at $43 billion. Its endowment earned a 15 percent return on investment last year. Taken together with the […] … learn more→
How endowment hoarding hurts Universities
The financial security of a strong university endowment would seem to matter most when hard times come along—when revenues slow and core functions are in danger of being compromised. At such times, an endowment can help guard against shortsighted cost cutting that harms both near-term quality and long-run vitality. But it turns out that many […] … learn more→
