Phi Beta Cons

The Oddities of Restricted Endowments

The New York Times has an interesting article on endowments over the weekend. An amusing anecdote:

When Stanley J. Seeger gave Princeton $2 million for Hellenic studies nearly three decades ago, the gift’s income paid for two courses in modern Greek and trips to Greece for five.
But the Seeger money, which must be spent only on matters Greek, is now worth $33 million, multiplying through aggressive investing like the rest of Princeton’s endowment. So the university offers Greek, Greek and more Greek — 13 courses this semester, including “The Image of Greece in European Cinema” and “Problems in Greek History: Greek Democracy,” as well as trips to Greece and nearby areas for more than 90 students and faculty members last year. The history department recently hired its second Byzantine specialist. And the fund paid half the cost of a collection of 800 rare coins from medieval Greece.

Also, apparently there is significant variance in the degree of restrictions universities face:

Aides to the Senate Finance Committee, which sent out a query in January about endowment practices to the 136 wealthiest colleges and universities, say they have received 131 responses and have begun to scrutinize them. The responses, some of which universities have made public, show that at some, including Harvard and the University of Texas, 80 percent or more of the endowment is constrained by donors’ wishes. But the responses do not begin to detail the variety of these restrictions.

Another source says that, on average, about 50 percent of funds are restricted at private schools, 75 percent at wealthy public schools — meaning that it would be very difficult for the government to decide what the “right” amount is for colleges in general to spend on reducing tuition.

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