Latest news with #endowment
Bloomberg
14-07-2025
- Business
- Bloomberg
Harvard Warns US Actions Will Cost Almost $1 Billion Annually
Harvard University warned that the combined cost of federal actions against the school, including a recently passed tax increase on its endowment, could approach $1 billion annually. The university said its leadership in each school and unit will continue to cut expenditures and a hiring freeze for faculty and staff will continue, according to a letter sent out by president Alan Garber and other leaders on Monday.
Wall Street Journal
13-07-2025
- Business
- Wall Street Journal
Diminishing Returns for University Endowments
David Swensen left a lucrative Wall Street career in 1985 to manage the Yale endowment. He introduced a new investment-management philosophy and literally wrote the book describing the technique. The Swensen model worked spectacularly at Yale and at many other educational institutions. But just as the technique is now widely advertised as the optimal way for all portfolios to invest, there are good reasons to believe that it will be less effective in the future. Individual investors should especially be cautious. The Swensen model used 'alternative' assets to capture higher investment returns without accepting additional risk. Because such assets weren't readily salable, they could be expected to provide an illiquidity premium and thus a higher risk-adjusted return. University endowments were the perfect institutional investors to employ the new model. Money given to endow a professorship, for example, would remain in the institution's endowment forever. Only the income would be spent to cover the professor's salary and research costs. So universities could accept illiquidity and earn a premium over the returns on publicly traded stocks and bonds. During the decade 1999-2009, the Yale endowment performed brilliantly, earning an average annual return of 11.8%. A publicly traded portfolio of all equities earned a negative rate of return in the same period. The Yale portfolio continued to outperform more moderately through 2021, when Swensen died. But in recent years, the generous excess returns from alternative investments disappeared. In the period 2022-24, the Yale portfolio underperformed the S&P 500 by an average of more than 8 percentage points a year. And when Yale sold a significant portion of its 'alternatives' portfolio in 2025, it sold at a slight discount from its carrying value, raising the possibility that valuations of some of these investments might be inflated. One can't use three years of data to predict the future. But since private valuations have risen to the stretched levels of public ones, the conditions now are less favorable for private returns to excel.
Forbes
10-07-2025
- Business
- Forbes
Facing A $57 Million Federal Tax Bill, Washington University Chancellor Worriers About Other 'Existential Threats'
Washington University in St. Louis is one of at least 10 schools that will see its endowment tax rate jump from 1.4% to at least 4% in 2026. getty Republicans just stuck Washington University in St. Louis with a much bigger tax bill on its $12 billion endowment. University chancellor Andrew Martin told students, faculty and staff in an email Wednesday that the Congressional budget bill signed into law by President Donald Trump last Friday will hit the university's $12 billion endowment with a 4% excise tax on its investment returns, up from the previous 1.4% rate, starting in January . The estimated $57 million annual tax is a $37 million increase from Washington University's previous tax liability, Martin wrote. 'While this is a significant increase, it is a much better outcome than some of the earlier proposals, which could have raised the rate to as high as 21%. It is not an exaggeration to say that, of the many existential threats we face in the current environment, an increase in our tax liability of that magnitude would have been catastrophic,' he said in the email. Using the latest available federal data from fiscal year 2023, Forbes estimated that at least 10 schools will likely see the tax rate on their endowments increase in 2026. Another 27 colleges likely got a tax break—they do not meet the new 3,000 tuition-paying student enrollment threshold for the endowment tax. These estimates are conservative, given that enrollments fluctuate year to year and endowments mostly grew between fiscal 2023 and fiscal 2024 thanks to high stock market returns. A survey of 658 colleges, which includes some of the wealthiest schools, by Commonfund with the National Association of College and University Business Officers showed college endowments grew by 11% in fiscal 2024, which ended on June 30, 2024. Washington University has seen its endowment balloon in recent years—at the end of fiscal 2021, the endowment netted a mind-boggling 65% return (the median return for college endowments that year was 27%), which brought its value from $9.6 billion to $15.3 billion. The endowment, now valued at $12 billion, generated an 8.7% return in fiscal 2024, following two years of negative returns in fiscal 2023 and 2022. There's plenty more in the budget bill that will impact universities. The bill brought a slate of changes to federal student loans, scrapped regulations for for-profit schools, changed Pell grant eligibility requirements—and that's just in the sections directly related to education. 'Changes to Medicaid funding, energy policy and other topics addressed in this new legislation may also impact the WashU community in the years ahead,' Martin wrote. 'We will be communicating soon about steps we will need to take to preserve university resources and become a more efficient and resilient organization.' More From Forbes Forbes These 26 Rich Private Colleges Just Got A Tax Cut From Republicans By Emma Whitford Forbes Unprecedented Student Loan Overhaul In 'Big Beautiful Bill' Passes House, Heads To Trump By Adam S. Minsky Forbes Here's What The Senate Budget And Tax Bill Means For Colleges By Emma Whitford
Bloomberg
07-07-2025
- Business
- Bloomberg
Notre Dame Loses Protection From Endowment Tax in GOP Bill
It looked like the University of Notre Dame would be safe from a Republican proposal to raise taxes on college endowments. But a loophole for religious schools was removed from the final tax bill, leaving the South Bend, Indiana-based school to pay a higher levy on its $20 billion endowment.
The Guardian
26-06-2025
- Entertainment
- The Guardian
Tate raises £43m from donations as it launches ‘ambitious' endowment fund
Tate has launched an endowment fund and secured £43m from donations in what it calls 'one of the most ambitious cultural fundraising campaigns of its kind in the UK'. Donations to the Tate Future Fund have come from individuals, foundations and Tate trustees, including James Bartos, Bloomberg Philanthropies, Nick Clarry, Mala Gaonkar, Anthony and Sandra Gutman, Jack Kirkland, Jamie and Michael Lynton, the Manton Foundation, Jorge M and Darlene Pérez, Manizeh and Danny Rimer, and Roland and Sophie Rudd. The aim of the campaign is to raise an endowment of £150m by 2030 to help support the Tate's exhibition programme and research in perpetuity. Donors are being solicited from Tate's extensive global supporter network. Tate's director, Maria Balshaw, said: 'There are a number of organisations in the UK that are working hard to create endowments, especially in higher education, but no cultural organisation has done an active campaign like this before. 'Many organisations in the arts sector would really like to have this kind of support. If you look to our North American peers, museums like MoMA, the Met or the Whitney all have very significant endowments. It is what protects them from the vagaries of economic change and allows them to think and plan long term.' The fund was announced by Tate's chair, Roland Rudd, at Tate Modern's 25th anniversary fundraising gala on Wednesday night, which was attended by more than 600 artists and philanthropists. The gala itself raised more than £1m from table hosts and guests, which will be used to directly support the Tate's artistic programme, its collection and its learning and educational activities. The gala followed Tate Modern's anniversary celebrations in May, when more than 76,000 people visited the gallery in a single weekend. More than 70% of those who visited were under 35 years old, and 2,000 of them joined Tate Collective, making it the largest arts membership scheme for young people in the world with more than 180,000 members, Tate said. Balshaw said the Tate's ethics committee helped 'advise on every kind of donation that we get'. Other cultural institutions have recently been urged by pro-Palestine supporters to cut ties with Bloomberg Philanthropies over the company's alleged links to illegal Israeli settlements in the occupied Palestinian West Bank. Sign up to Art Weekly Your weekly art world round-up, sketching out all the biggest stories, scandals and exhibitions after newsletter promotion In September, dozens of film-makers including Mike Leigh, Julia Loktev and James Schamus called on the New York film festival to drop the sponsor. In January, more than 20 artists taking part in an exhibition at London's Institute of Contemporary Arts staged a walkout in support of pro-Palestine demonstrators calling on the organisation to cut ties with Bloomberg Philanthropies. And in May, hundreds of theatre and arts professionals demanded Islington's Almeida theatre end its partnership with the company. Balshaw said Bloomberg Philanthropies supported 'a very wide range of arts organisations in the UK and across the world, and they are already very longstanding supporters of Tate. 'In common with all arts organisations and museums in this country, our ethics committee follows the principles laid out by the Charity Commission, so we are obliged to consider all donations with a presumption that we should accept the money if it's for public benefit.'
