Dive Brief:
- About 30 of America’s top colleges and universities control 52% percent of the nation’s endowment wealth — more than $260 billion according to Forbes Magazine.
- Schools with higher endowments have more resources to spend on faculty, advanced learning technology and development and serve as an example of how wealth generates performance and generates more wealth.
- Combined with nonprofit property tax exemptions Congress is asking elite universities to justify, many of the nation’s top institutions are on a short-term path to potential inquiry, but unchecked, long-term financial invincibility.
Dive Insight:
While many of the nation’s colleges and universities are looking towards enrollment as the key to financial growth, the Washington Post’s review of college tax breaks reveals real estate and fund managing may be significant factors in building institutional wealth while maintaining quality of service and academic offerings.
Some experts say elite colleges may be under a federal microscope for getting wealthy from tuition and tax savings on property and endowment investments, but it appears that the federal government is an active partner in the cycle of wealth building. Recent comments from U.S. Education Undersecretary Ted Mitchell suggest that institutions building alternative revenue streams would be favored for federal support in the remaining months of the Obama Administration, something which bodes well for some colleges’ current financial strategies.