A college endowment is a regulated pool of financial assets invested to support a university’s mission over the long term. Endowment managers withdraw roughly 5% of the fund’s total value each year to help pay for an average of 15% of the school’s annual budget, mostly scholarships, faculty positions, research, and campus operations.
Over 600 US colleges and universities hold a combined $874B in endowment assets, with a median value of $234M. The largest private endowments are Harvard ($53.2B), Yale ($41.4B), and Stanford ($37.6B). The University of Texas system is the largest among public institutions, with an endowment valued at $46.9B.
Endowments are primarily funded through charitable donations from alumni, philanthropists, or foundations and come with specific stipulations—also known as restricted funds—designated for scholarships, faculty positions, or research. Unrestricted funds account for roughly 20% of most endowments and are used at the discretion of the school.
University endowments are invested with a long-term view and are spread across various assets to preserve intergenerational equity—purchasing power for both present and future generations.
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