This story originally appeared on AdmissionSight and was produced and distributed in partnership with Stacker Studio.
US colleges and universities with the biggest endowments
When the coronavirus pandemic struck, the stock market tumbled and with it the investments of many colleges and universities across the country. But that changed with the 2021 fiscal year, marked by major U.S. Federal Reserve and Treasury stimulus, when their endowments reported the strongest annual performances in 35 years and increases averaging 27%.
Citing data from the National Association of College and University Business Officers, AdmissionSight identified the 10 colleges and universities with the largest endowments as of the 2021 fiscal year. Per-student figures are based on fall 2020 overall enrollment including full-time undergraduate and graduate students.
If you're wondering why schools with enormous endowments do not provide even more tuition help than they do, one reason is that universities face constraints over how the money can be used. Endowments are typically meant to be long-term investments and are designed to support the college or university many years into the future. Endowment allocations typically pay for financial aid, salaries, academic programs and research, and campus improvements. Donors often will specify what the funds they contribute can be used for, whether scholarships or faculty positions.
Some of the recent headlines related to endowments come from public pressure on a school's financial commitments. Student activists often focus on endowments, as they are doing now as they try to force universities and colleges to divest from fossil fuels. The most recent tactic, taken up in the spring of 2022 by students at the Massachusetts Institute of Technology, Princeton, Stanford, Vanderbilt, and Yale, has been to file a legal complaint charging that the funds invested in fossil fuels are being handled unwisely.
Universities usually will spend less than 5% of their endowment each year and will stick with that figure whether their investments do well or poorly. Read on to learn which universities have the largest endowments in the U.S.
#10. University of Michigan
- Ann Arbor, Michigan
- Endowment, fiscal year 2021: $17.0 billion
- Per full-time student: $297,938
- Growth since 2020: 32.4% (from $12.9 billion)
The University of Michigan's Board of Regents voted in 2021 to end the school's investments in fossil fuels. One member, Mark Bernstein, credited student protests over the years for the change. He described the students as "thoughtful, well-informed, absolutely relentless, and in the end, successful." The students' Climate Action Movement praised the move but objected to the classification of natural gas as a sustainable investment. The university says it will shift its investments to renewable energy and work to ensure it has a "net-zero" carbon footprint by 2050. The university saw a strong return on its investments in the 2021 fiscal year, mostly due to venture capital and private equity funds.
#9. The Texas A&M University System
- College Station, Texas
- Endowment, fiscal year 2021: $18.0 billion
- Per full-time student: $146,772
- Growth since 2020: 32.6% (from $13.6 billion)
In 1876, Texas set aside more than 1 million acres of land to help the development of the Texas A&M University and the University of Texas systems. Today, the universities earn revenue through leases of oil and gas. A recent fundraising campaign, described by the system as the most ambitious higher education capital campaign in Texas history, raised $4.2 billion for students and faculty. Thirty percent of the donations will go toward the system's colleges, another 20% to faculty and research, and 19% to students. The system's endowment is managed jointly with that of the University of Texas.
#8. University of Notre Dame
- Notre Dame, Indiana
- Endowment, fiscal year 2021: $18.1 billion
- Per full-time student: $1.4 million
- Growth since 2020: 51.1% (from $12.0 billion)
Forty-two percent of allocations from the school's endowment go toward scholarships and fellowships and 21% toward academics and religious and student programs. The university covers the financial needs of every undergraduate student. The endowment pool's 2021 investment return was the second-highest in a one-year period in its history, the school reported. Of its investments, nearly 46% were in private equities, 31.2% were in public equities, and about 23% were in what's called a multi-strategy asset class, which includes a combination of stocks, bonds, real estate, and cash. The university says its investments are weighted toward long-term growth.
#7. University of Pennsylvania
- Philadelphia, Pennsylvania
- Endowment, fiscal year 2021: $20.5 billion
- Per full-time student: $878,050
- Growth since 2020: 38.0% (from $14.9 billion)
The University of Pennsylvania announced in 2021 that it would halt its commitments to private equity dedicated to fossil fuel production. It already does not make direct investments in companies engaged in the production of fossil fuels. For members of the Student Sustainability Association, the promise did not go far enough. They also want the university to repair damage caused by environmental racism. The university has set 2050 as the date by which to reduce the net greenhouse gas emissions from its endowment investments to zero.
#6. Massachusetts Institute of Technology
- Cambridge, Massachusetts
- Endowment, fiscal year 2021: $27.5 billion
- Per full-time student: $2.5 million
- Growth since 2020: 48.8% (from $18.5 billion)
Students at the Massachusetts Institute of Technology filed a complaint in 2022 with the Massachusetts attorney general over the university's failure to divest from fossil fuels. The activists with MIT Divest argued that the university is in violation of its fiduciary obligations as a nonprofit organization by continuing to invest in fossil fuels. They were joined by students at Princeton, Stanford, Vanderbilt, and Yale universities, who lodged similar complaints in their states with the help of the Climate Defense Project. The students say their schools are failing to live up to the requirements of the Uniform Prudent Management of Institutional Funds Act, adopted by nearly every state and which establishes standards for nonprofit institutions and charities. MIT continues to invest a portion of its endowment in fossil fuels.
#5. Princeton University
- Princeton, New Jersey
- Endowment, fiscal year 2021: $37.7 billion
- Per full-time student: $4.5 million
- Growth since 2020: 41.9% (from $26.6 billion)
In an article in The Nation, Princeton students opposed to the university's fossil fuel investment gave a conservative estimate of its value at $750 million. Princeton's investment gain on its endowment since 2020 compares to an average annual return over the past 10 years of 12.7% and over the last 20 years of 11.2%. Sixty-six percent of Princeton's operating revenue each year comes from distributions from the endowment and other investment income. University officials note that today's financial situation is far from that in the 1970s. In those decades, the school was running budget deficits, financial aid failed to meet students' needs, and salaries could not keep up with inflation.
#4. Stanford University
- Stanford, California
- Endowment, fiscal year 2021: $37.8 billion
- Per full-time student: $2.4 million
- Growth since 2020: 30.6% (from $28.9 billion)
Stanford University's recent return on its principal investment vehicle, its merged pool, showed a marked increase over 2020's 5.6% return and 2019's 6.5% return. The median return for U.S. college and university endowments was 33.4%. Stanford disbursed $1.33 billion from the endowment for academic programs and financial aid and another $379 million for COVID-19-related expenses and revenue shortfalls. Students at Stanford, like their counterparts at MIT, Princeton, Vanderbilt, and Yale, are putting pressure on the university to divest from fossil fuels.
#3. Yale University
- New Haven, Connecticut
- Endowment, fiscal year 2021: $42.3 billion
- Per full-time student: $3.5 million
- Growth since 2020: 35.5% (from $31.2 billion)
At Yale University, members of the Endowment Justice Coalition are demanding full divestment from fossil energy. In 2021, the university announced principles for investing in fossil fuels and denoted companies not eligible for investment but the students say that is not enough. Students at Harvard and other universities earlier used a legal approach similar to the one undertaken in 2022 to pressure their schools to divest fully from fossil fuels. Harvard pulled its investments but cited a goal to reach "net-zero" greenhouse gas emissions by 2050.
#2. University of Texas System
- Austin, Texas
- Endowment, fiscal year 2021: $42.9 billion
- Per full-time student: $176,050
- Growth since 2020: 34.3% (from $32.0 billion)
The endowment for the University of Texas System was the second-largest in the country in 2021. It invests in both oil and gas as well as the state's abundant wind energy resources. The UT System has come under criticism for its reliance on fossil fuels, especially its investments in companies that employ fracking. Students also have protested the investment in weapons manufacturers, according to student-run newspaper The Daily Texan. The system's board of regents has designated a $300 million endowment fund to help seven of its universities expand free tuition for lower-income students. They created a similar fund (of $167 million) for UT Austin in 2019.
#1. Harvard University
- Cambridge, Massachusetts
- Endowment, fiscal year 2021: $51.9 billion
- Per full-time student: $2.3 million
- Growth since 2020: 27.9% (from $40.6 billion)
Harvard University has the largest endowment among colleges and universities, made up of more than 14,000 funds. It distributed $2 billion in the fiscal year ending June 30, 2021, to cover more than a third of the university's $5 billion in operating expenses.
The Harvard Prison Divestment Campaign criticizes the university for profiting off the prison-industrial complex, whether from jails that detain immigrants to private prisons, which activists say disproportionately affect low-income families. Harvard says it invests only about $18,000 in the prison industry; the Harvard Divest Prison Campaign put the figure at nearly $3 million, including indirect investments. Harvard failed to fully divest from South Africa during the 1980s in the ultimately successful campaign that brought about the end to apartheid, but it did later divest from the tobacco industry and from oil production in Sudan between 2005 and 2006.
