The federal government doesn't seem to be in a very good position to criticize the way university endowment associations support higher education.
Some members of Congress are considering a law that would require endowment associations to expend a certain percentage of their assets each year. The goal, they say, is to address rising tuition costs at universities across the nation.
Lawmakers apparently are getting a lot of complaints from their constituents about high tuition costs and, in classic form, have decided to pass the buck to someone else. Rather than look at increased state and federal support for higher education, they are pointing the finger at the private endowments that support universities.
The measure might focus on private universities with huge endowments, but it also could hit public universities, like Kansas University, whose endowments have topped $1 billion. For public universities, endowments have been a lifeline in recent years as the percentage of their budgets funded by the state has plummeted.
These endowments are successful because they are managed for long-term stability. They pay for such things as endowed professorships year in and year out regardless of the annual return on their investments. Endowment officials know there will be lean years, so they plan ahead and make sure they have enough cushion to meet their obligations.
Come to think of it, considering the current federal budget deficit, members of Congress might learn a thing or two from university endowment associations.
Rising tuition is a great concern in this country, but Congress' complaints about endowment funds might speak more loudly if those funds were handling government money rather than private funds. Endowment funds have been given to universities by generous donors who often want their money to address a specific need. It could be a building or a professorship, but, in many cases, that need is to provide scholarships for worthy students. In that way, endowment associations and their donors already are addressing the rising cost of tuition.
There is little question that tuition at some universities, especially some of the nation's elite institutions, is out of reach for many students. The fact that tuition for Kansas students at KU has more than doubled in the last decade should be of no small concern to our state leaders. But attacking, and perhaps damaging, private endowments that make up for what government sources are unwilling or unable to supply, is an insulting and dangerous approach.
Comments
Mr_Missive 5 years, 7 months ago
Endowments across the country are a scam. I bet 90% of the people that give money think they are giving it to KU -- little do they know. Why do endowments scream when someone designates how the money will be spent? Because they want your money to spend how they like versus how you think it should be spent. I have been on a University's Endowment Board and resigned for all the reasons someone would resign from Enron's board.
LogicMan 5 years, 7 months ago
"by generous donors who often want their money to address a specific need"
Actually, almost always, rather than "often". Not a bad thing, in my mind, except having some undesignated funds does give organizations flexibility to target a few special needs.
toefungus 5 years, 7 months ago
This must be done. Endowments should spend their money to keep tuition down. As taxpayers, we are subsidizing the entire system. Education of students should be the primary mission, not granting board positions to country club members and children of distinguished alumni. Write in support of this idea.
ralphralph 5 years, 7 months ago
Is there an accounting available, showing the use of funds?
Wilbur_Nether 5 years, 7 months ago
toefungus wrote "As taxpayers, we are subsidizing the entire system."
Hence the term "public education." As a voter and a citizen, I am embarassed at the lack of support our legislature demonstrates for education at all levels in this State.
Godot 5 years, 7 months ago
There is no reason the endowment should not spend everything over a minimal return on investment, say, over 8%. Even in "down" years, which I note the endowment has not had in a long time, the cushion from growing the fund at 8% per year, year after year, would more than be sufficient to maintain the money printing behemoth.
Regarding biting the hand that feeds us, really, Dolph, do you not think that the taxes lost on the contributions made, and the taxes not charged on the massive returns on the funds, would not make up for the meager 4 % of the funds the endowment spends on the university?
bernadette 5 years, 7 months ago
The state of Kansas provides only 24 percent of KU's budget.
lucky_guy 5 years, 7 months ago
BigDog 5 years, 7 months ago
Wilbur_Nether (Anonymous) says:
toefungus wrote "As taxpayers, we are subsidizing the entire system."
Hence the term "public education." As a voter and a citizen, I am embarassed at the lack of support our legislature demonstrates for education at all levels in this State.
Wilbur do you realize that 66% of the states entire budget is spent on K-12 education and higher education? How much is enough?
kneejerkreaction 5 years, 7 months ago
Endowments are a scam. The "researchers" who receive a lot of the endowment money are nothing less than highly eduated salespeople that try and befriend old people to get their money. KU's matching federal research grant was taken away due to lack of innovation, rightly so, which only makes the slimy salespeople go even harder to the private sector.
I've seen white papers written by researchers that look more like the work of a cut and paste artist....a googlesearcher, not a researcher doing innovative work. Then, they insidiously inserted the name of the person who they were trying to scam, into the report to make it look as if it were all about them and whatever cause they had donted their money for.
Commenting has been disabled for this item.