The concept of a university with an endowment was unknown to me when I first came to the US in 2002. Almost all Australian universities are funded by the government, and the notion of directly supporting one’s alma mater through financial gifts was not something that I (or any of my colleagues, for that matter) even considered. After all, everyone indirectly supports universities through the taxation system.
So it never ceases to amaze me when I read of the endowments at America’s top educational institutions – Harvard with $34.9 billion, Yale at $22.5 billion, and Princeton possessing $15.8 billion – all (as far as I understand) the result of fundraising, much of it coming from alums.
A couple of interesting/sickening facts regarding the very wealthiest US universities:
- Harvard’s endowment grew $5.7 billion in 2007
- The interest on Yale’s endowment funds roughly 45 % of its yearly budget
As it turns out, aggressive attempts to grow endowments are not solely a private university phenomenon. With the top private universities able to lure the best faculty with higher salaries and more funding, taxpayer-funded state universities are following suit, raising their own endowment funds to create lasting sources of income in addition to state funds in order to remain competitive with the most well-funded private universities.
This all seems very strange to this foreigner. I’m curious to know how university funding works in other countries, particularly whether there is a culture of giving back to one’s institution after graduating. Does this happen everywhere but Australia, or is this a curiously American thing?
As an Indian, my university (Indian Institute of Technology) does solicit funds from alumni. I don’t think they are a significant source of funds at this point point but this is a direction they want to go in. Especially since funding from government has been relatively flat and expenses have increased and many alumni have hit the IPO jackpot in recent times.
At our university (Katholieke Universiteit Leuven, Belgium) I’ve never felt a culture of giving something back, and never heard about for the other universities in Belgium. The major funds for the education part of the universities comes from the government(s).
Farhat and Wouter,
Thanks for your comments. I’m grateful for your international perspectives on this issue.
My rigorous (n=3) study seems to suggest that the culture of giving is unique to the United States. I wonder what it is about the American university/college experience (compared to the experience of students elsewhere in the world) that leads so many US alums to give back to their institutions of higher education?
Hi Pete,
My experience of UK (more specifically, Scottish) universities is that they send out regular newsletters to alumni; these usually contain (amongst other things) information about recent projects and how alumni can contribute financially to them. I have no idea how substantial these types of endowments are in terms of the the universities’ overall budget – but I suspect it is nominal….?
I think it is more common for (usually deceased) alumni to ‘give back’ more directly to the students of their alma mater by funding annual scholarships…..
Maybe the “culture of giving back to one’s institution after graduating” is as much a question of tax policy and income distribution as strictly a cultural thing. As John F. Tierney is quoted in the NY Times paper you refered to, “when a donor gives them money, he is able to give more because he is not paying taxes” – and in that sense donations to private universitites in the US are a substitute for what we in many EU countries are familiar with as public funding via taxes. In welfare states with very high taxes and no tax subtraction from donations, it would be difficult to imagine the same culture of “giving back”.
Btw, there are some more information in the Wikipedia articles on “university”, “public university” and “private university”.