University endowments – Giving # 2

“If a rich man is proud of his wealth, he should not be praised until it is known how he employs it.”

— Socrates

This is follow-up to my earlier post “Giving.”

On a recent day of sailing, my friend and host conveyed that he too had doubts about donating to rich universities.  Although he has given to Stanford over the years, he was now questioning that practice.  I pointed him to my recent blog post on giving.  He helpfully found an error, now corrected.  He also conveyed “your metrics of $/student and $/annual budget are very informative.  They both are much better measures of the size of an endowment than absolute dollars.”

This encouraged me to create the following table for the top universities in the U.S. as ranked by US News and World Report. (In it I’ve dubbed the ratio of Endowment/Annual Expenses the “Jake Ratio” and sorted the data on that variable.)

1) The top ranked large universities have large endowments.
2) When normalized by student count or annual expenses, Princeton has the largest endowment.
3) With a Jake Ratio of over 11, Princeton can stay in business for a decade or more without any revenues!

About Krist

Companion of Wally who is featured at More at
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