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They do, but that money is restricted as to what it can be used for. From the article: “There is a common misconception that endowments, including Harvard’s, c
by function_seven 11y ago
They do, but that money is restricted as to what it can be used for. From the article:
“There is a common misconception that endowments, including Harvard’s,
can be accessed like bank accounts, used for anything at any time as long
as funds are available,” Jeff Neal, a Harvard spokesman, said. “In reality,
Harvard’s flexibility in spending from the endowment is limited by the fact
that it must be maintained in perpetuity and that it is largely restricted
by the explicit wishes of those who contributed the endowed funds.”
- logfromblammo 11y agoNevertheless, $37600M earning 12% is enough to cover annual expenditures of $100k for each of 45000 students without ever touching the principal.
- TulliusCicero 11y ago1. Long-term return on the stock market, factoring in inflation and dividends, is a little under 7%. If you can consistently nail 12%, I'd like to know your secret. 2. It's possible that the returns from the principal are also restricted.
- logfromblammo 11y ago1. I would, too. The Harvard endowment gets an average of 12%, according to what I have read. 2. That is why Harvard hasn't already done it, apparently.
- TulliusCicero 11y ago> The annualized return on the endowment over the last 20 years has been approximately 12.0% per year and the endowment was valued at $37.6 billion at June 30, 2015. http://www.hmc.harvard.edu/investment-management/performance-history.html http://www.hmc.harvard.edu/investment-management/performance... Huh, but it doesn't specify whether this is inflation-adjusted.
- jessaustin 11y agoYes but they also like to build stuff with donors' names on it. There are few places in America that are more expensive for construction than Cambridge. Besides, they can't plan on using the maximum from the endowment every year, because the endowment sometimes grows less than usual, or even shrinks.
- logfromblammo 11y agoHarvard enrollment is about 20k and tuition is about $50k per year.
- jessaustin 11y agoDon't assume that "tuition" covers the cost of the average student. Don't assume that teaching students is the only thing that goes on at Harvard.