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Not specifically aimed at MIT, but wouldn’t such a large unspent endowment not (at least casually) suggest a failure to invest in research / students / etc.
by admdly 2y ago
Not specifically aimed at MIT, but wouldn’t such a large unspent endowment not (at least casually) suggest a failure to invest in research / students / etc.
- throwaway2037 2y agoGreat question. As I understand, uni endowments work similar to sovereign wealth funds: You spend a portion of annual investment gains, but not the principal. So, conservatively, MIT earns 4% per year on the invested principal (25B USD), and maybe takes 3% of that return for spending. That would be and extra 0.75B USD per year in their budget. That is massive. Look at the annual budget for other world class tech unis like Swiss EFPL or ETH to understand the size of this endowment bump, relative to total budget.
- duskwuff 2y agoNot in the slightest. An academic endowment isn't meant to be spent; the university holds the principal of the endowment and spends from the returns.
- admdly 2y agoIt does indeed look like they’re spending the returns, rather than just sitting on an ever increasing principal which I initially suspected.