[FoRK] wealth disparity amongst institutions of higher learning

Ken Meltsner meltsner at alum.mit.edu
Tue Dec 8 13:18:05 PST 2015

Cynically, I suspect this is an attempt to justify changing the tax
code to grab or redistribute some of that wealth since they're running
out of less-politically sensitive sources.

Less cynically, it could be viewed as an attempt to bring universities
into the same framework as other non-profits where there are limits to
how much can be accumulated, how much needs to be spent on what sorts
of activities, etc.  This has already been done to churches -- they're
taxed on non-religious/charitable activities, I believe, although
defining which these are is an ongoing nightmare.

A nit pick or two: endowment per undergrad is the wrong number.  It
should be, at the very least, endowment per student (grad +
undergrad), especially at institutions like Harvard University where
the total enrollment is several times the undergrad enrollment.  I
don't know if the numbers quoted were already corrected to include
only the part of the endowment associated with the undergraduate

Agreed that 15% return is a historical outlier.  The long term average
of 1-3% over (some measure of) the inflation rate* is probably a
better one.

*  Inflation rate is problematic because IIRC a university has two big
costs: energy and people.  And these do not follow the same curves as
the CPI or other market basket numbers.

Ken Meltsner

On Tue, Dec 8, 2015 at 12:45 PM, Gregory Alan Bolcer <greg at bolcer.org> wrote:
> On 12/8/2015 12:34 PM, dan at geer.org wrote:
>>   | Minus the payout rates which fluctuate between 4.2 and 5.1% on average
>>   | from 1998 through 2014, so your numbers are high by 30%.
>> Ain't my numbers; am the CRS' numbers.
> Yes, I cited them from the same document.
> Greg
> --
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