- Researchers attempted to evaluate the demographic makeup of who manages endowments of the country’s wealthiest 25 private and 25 public colleges, but less than a third shared their investment information.
- Sixteen of the country's wealthiest private and public colleges shared information. They invest at least 5% of their assets with management firms that have women and racial or ethnic minority owners, according to a new report from the Knight Foundation and the Global Economics Group, a business management consulting firm.
- The endowments of the 50 surveyed colleges total $587 billion. The 16 participating colleges hold $314 billion in assets, over half of the larger group's collective funds.
Risk adjusted returns don't differ in a statistically significant way between White male-owned firms and firms that are owned by women and people of color, according to a separate Knight Foundation study. And having a diverse group of decision-makers has proven to boost performance, according to research from McKinsey & Co.
Of the 16 institutions that participated in the new report, 12 provided data for researchers to analyze. Each invests more than 5% of its U.S.-based assets with diverse-owned firms, with 11 investing more than 10%.
Princeton University and Duke University invest over 20% of their U.S.-based portfolios with diverse-owned firms.
The remaining four institutions self-reported their information, with investment through diverse-owned firms ranging from 19% at Harvard University to 38% at Stanford University.
Participating colleges and higher ed systems include:
- Columbia University.
- Dartmouth College (self-reported).
- Duke University.
- Harvard University (self-reported).
- Michigan State University.
- Princeton University.
- Rice University.
- Rutgers University.
- Stanford University (self-reported).
- University of California System.
- University of Chicago.
- University of Colorado.
- University of Illinois.
- University of Pennsylvania (self-reported).
- University of Texas System.
- Vanderbilt University.
Due to the small sample, the report published the collected information without making any broader inferences about 50 of the country's wealthiest colleges.
"At the same time as we are grateful for the transparency of some institutions, we also want to alert the public to the opacity that remains," the report said.
But some colleges are working toward transparency.
"Duke has been disclosing this information for several years," said Candice Rosevear, principal at Global Economics Group. "And the University of Texas system actually had its data publicly available, so we could include them despite not getting a direct response."
Six universities provided additional information on who they planned to invest with in 2021 — University of Chicago, University of Colorado, Columbia University, Princeton University, Rice University and Rutgers University. That group made $1.7 billion in uncalled commitments, assets promised to a firm for future investment. Some 36% of those assets were committed with diverse-owned firms. Princeton invested 100% of its commitments with diverse-owned firms, accounting for roughly half of the group’s 2021 increase.
Among the colleges that participated, diversity was clearly front of mind, Rosevear said.
"They are the leaders in this effort," said Rosevear. "Some of them even admit that their numbers aren't where they want them to be."
She is optimistic that more colleges would participate if the survey was repeated down the road, citing responses from many institutions that declined to submit data this time.