Why should colleges and universities build enormous endowments, anyway? Vance Fried, a business professor at Oklahoma State and author of the new book Better/Cheaper College, says they shouldn’t. His Pope Center article on the topic has a lot of thought-provoking gems:
Excess endowments are a non-productive use of society’s limited resources.
Unlike most human beings, who prefer consumption in the present rather than the future (a fact that creates the interest rate), the trustees view themselves as having a time preference of zero.
The task of preserving financial wealth for future generations is for a trust company, not a college. Colleges and universities best serve future generations by devoting their resources to their educational mission in the present.