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They have $27 billion in their endowment. They are choosing not to fund those positions when they easily could on their own.
by mcmcmc 5mo ago
They have $27 billion in their endowment. They are choosing not to fund those positions when they easily could on their own.
- ryandrake 5mo agoAt this point, these well-endowed universities are essentially Private Equity firms, each with a university hanging off the side as a minor, semi-profitable department within the firm.
- AndrewKemendo 5mo agoPrecicely this Everything is a bank for the rich. The people who “invested” in the endowment would rather burn their money than let someone use it without getting a multiple return on it
- JoeNuts 5mo agoUniversities get ~40-50% of their funding from the government. Private equity doesn't quite fit.
- dhosek 5mo agoIs that across all universities? Because I would guess that, for example, University of Illinois gets a much larger portion of its funding from government sources than University of Chicago (which would be one of those well-endowed universities which, incidentally, just cut tuition to zero for undergrads from families making less than $250K).
- mcmcmc 5mo agoUniversity of Illinois is also a public school. University of Chicago is private, as is MIT.
- dhosek 5mo agoWhich is precisely why I made that comparison.
- deleted 5mo ago[deleted]
- JoeNuts 5mo agoThis study estimates that government spending is 40% of public university revenue, ~10% for private schools. https://nces.ed.gov/programs/coe/indicator/cud/postsecondary-institution-revenue https://nces.ed.gov/programs/coe/indicator/cud/postsecondary...
- elteto 5mo agoFund them to do what exactly? Come up with their own research ideas? You got the pipeline backwards. The government picks the research areas/priorities then allocates funding for those, and universities apply and compete to get grants. _Then_, once a grant is given to a school, is funding for labs and graduate students allocated. If the government has no interest in doing research and provides no funding then schools don’t have projects to work on and no money to hire graduate students.
- loeg 5mo agoThat is how it usually works, but again, MIT has tens of billions of dollars. They could literally write their own grants.
- snark42 5mo agoMuch of those billions of dollars are contractually limited in how they can use both the principal and gains so it's really not that simple.
- counters 5mo agoA sizable chunk of the endowment likely has legal restrictions that limit how funds can be spent. E.g., they could be earmarked for undergraduate scholarships or a specific lab at a specific department. The endowment isn't a slush fund. It's also worth noting that the structural costs of research are far larger than what any single institution would be able to shoulder. For instance, MIT has extremely limited supercomputing resources under their own maintenance. Researchers would typically use such resources from centralized places funded by the NSF or DOE, where larger pools of money can be assembled. And of course this doesn't even get into the reality that the annual operating costs of somewhere like MIT likely far exceeds the investment returns generated by the endowment. You might as well argue that companies should never take venture capital - e.g. if they can't finance their growth through profits alone then they shouldn't raise any money. The whole point of grants or investment is to subsidize and incentive work which has payoffs on much longer timescales than what market dynamics can sustain alone.
- corygarms 5mo agoWow you just made me realize that Elon Musk net worth is roughly 30x the value of the entire MIT endowment fund.
- pettycashstash2 5mo ago[dead]
- jancsika 5mo agoChancellor mcmcmc: We have a $27 billion endowment. We can easily fund these positions. Chancellor mcmcmc, 2027: We have a $26 billion endowment. We can easily fund these positions. (Unrelated note: all freshman-level math courses have been moved to Temporary Building #17.) Chancellor mcmcmc, 2028: We have a $24.8 billion endowment. And congratulations to Chancellor Trump! (Note: all freshman humanities classes have been moved to Temporary Building #17.) Chancellor mcmcmc, 2029: We have nearly $23 billion in our endowment. We can easily fund these positions. (Note: due to recent outages, all students residing in purple zones should use their personal data plans until further notice.) Chancellor mcmcmc, 2030: We have nearly $21 billion in our endowment. We can easily fund these positions. (Note: Due to wait times at the Student Supplement Center, please consult your family practitioner for all supplement-related issues.) Chancellor mcmcmc, 2031: We have plenty in our endowment, frankly. Probably more than anyone's ever seen-- billions, with a "b." We can easily fund these positions and honestly, many, many others. (Note: all classes currently scheduled in Temporary Building #17 will be rescheduled at a location TBD.) Chancellor mcmcmc, 2032: It is with deep regret that I inform the students and faculty that I will be resigning at the end of this year's streamcast. It's been such an honor to... Edit: clarification :)
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- mcmcmc 5mo agoAre all your comments this abrasive and obtuse? Obviously chucking a million at every grad student every year to do whatever they feel like is poor financial decision making. If the university is funding the research, they can retain the IP and reap the financial benefits. It’s a private for-profit organization. Endowment aside, they have hundreds of millions in surplus operating income. What do they need public funds for?
- elevation 5mo ago> We have a $27 billion endowment. We can easily fund these positions. > Chancellor mcmcmc, 2027: We have a $26 billion endowment. With that much capital, even conservative management should exceed $100M in interest annually, meaning they could have a $100M+ budget indefinitely. That's enough money to give a couple thousand employees a six figure salary while reserving 2x the salary amount for overhead like benefits, facilities and research efforts.