Endowment data

[Denzera]

<p><em>sigh</em> I hate having to do this.</p>

<p>Buddy, I’m a consultant to financial services firms and investment managers. I practically do benchmarking for a living. Although I don’t believe any educational endowments are among our clients, I’m not an ignoramus. Neither are several of the other professionals on this board. You can stop taking such high-minded offense.</p>

<p>

The 15% figure is an average over the last 10 years and includes negative returns at and around the millenium. Most years were FAR greater than 15%.

You have the burden of proof for such claims. Where is your data?</p>

<p>edit: Oh wait, you don’t have any. You have conjecture and paranoia:

I stand by my assessment at 15% for an endowmwnt of this size. If Col is not earning this they should fire their portfolio manager. The data for Columbia for the last decade should be available if you want to take the time to dig it out. I dont.

So, to make up for your laziness, you just go attack anyone who disagrees with you. Solid debating technique.</p>

<p>

And most businesses wont even consider an investment that is anticipated to return less than 15%. Get your facts straight.

Most investments businesses make are over multiple years. And if you are talking about a CAGR, there are many businesses (Retail comes to mind, as does Transportation) which would be perfectly happy with much less than that.</p>

<p>Except that we are talking about educational endowments, which operate similarly to a hedge fund albeit more risk-averse. “Businesses” are irrelevant.</p>

<p>

I simply dont understand why anyone would defend increases in tuition or any tuition at all when a school is earning a billion a year on its endowment.

Because it’s spending that money on educational activities. This is not Exxon-Mobil we’re talking about. It is statutorially a nonprofit. For every excess like Bollinger’s house, we spend twice as much training more social workers (go take a look at the new school of social work building). There are a ton of capital expenditures on top of the usual operational expenditures. You simply have no idea what goes into a school’s capital budget, and if you do you are willfully misrepresenting and oversimplifying.</p>

<p>

It should be obvious that at 5 % or less (which includes your amounts spent in excess of tuition, including rapidly increasing administrators salaries and benefits) schools are not doing enough to defray tuiion expenses.

The average amount paid by EFC at Columbia has been going down the last few years, as increased aid has covered any increases in COA. While more “could” be done, growing the principal from which the endowment throws off money is a long-term winning strategy, since because they are beating the market, there will be more money in the long term for every dollar we keep in the fund.

There is no justification whatsover for increasing tuition and fees at 4-5 % per year

Except, you know, that the school’s educational mission and research aspirations expand as fast as the available funds. There are always way more ideas for spending money than there is to cover it. An excess of money is a ludicrous thing to complain about when there are shortages in so many other institutions.</p>

<p>From your most recent post,

And dont forget that Columbia is also contunually adding to its endowment through pervasive fund raising efforts. Why raise it if you’re just going to horde it and arent going to use it?

I’ll give you a hint: They’re not buying yachts with it. They’re not sitting around eating Godiva chocolate and telling each other how sweet their scam is. By law it has to get spent, and get spent it does - on operational and capital expenditures. More professors. New buildings. New labs. New research grants. New “Centers”. New departments. More students admitted. More housing. Modernized housing. Better facilities management. Better technology throughout the university. And, yes, [more</a> financial aid](<a href=“http://www.studentaffairs.columbia.edu/finaid/enhancements/]more”>How Aid Works | Columbia Financial Aid and Educational Financing).</p>

<p>Oh, and that new Manhattanville campus you might have heard about. I hear they’re not giving those away, either.</p>

<p>Finally,

or for using one student’s tuition to pay another’s financial aid.

If you are against different people paying different real amounts to attend based on their means, then you are against financial aid as a concept. Every price point for each student is based on supply and demand. Because educational opportunity is considered the great equalizer in our society, the school (And the federal government, which supports the concepts financially and legislatively) tries their best to offer services to desired students of any financial means. What that means is differential price points. It’s somewhat euphemistically referred to as “financial aid” when in fact what is happening is the top price tag keeps going up while the bottom price tag keeps dropping (and hit zero for students making under $40k this year, $60k at harvard). </p>

<p>Unless you’re going to argue that Columbia is somehow not doing right by its students in the manner in which it spends its money, it sounds like you are against the notion of financial aid and the notion of equal access to education. So I don’t see what you’re whining about here.</p>