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The 17 Richest Colleges in the U.S.

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Investment performance for college and university endowments fell sharply in fiscal year 2022, along with a dip in overall asset values, according to NACUBO–TIAA’s FY 2022 study, released in early 2023.

Even with the drop in endowment returns, institutions in the study reported that they spent some $2 billion more in fiscal 2022 than they had in the previous fiscal year to fund various needs.

The average return for all college endowments in fiscal 2022 was -8%, well down from the 30.6% overall average return in fiscal year 2021. But the study’s data also showed that overall returns averaged 7.5% over the past three years, 7.3% for five-year returns and 7.8% for 10-year returns.

The study, which covers the fiscal year July 1, 2021, through June 30, 2022 (the most recent data available for all institutions), comprised responses of 678 institutions whose endowments assets had a total market value of $807 billion, about 4% lower than levels at the end of fiscal year 2021.

The market value for the largest endowments declined by 3.8%, while the average decline for the smallest ones was 9.6%. The study said this significant difference likely came about because of varying allocations to private markets, in particular, venture capital and private equity strategies.

Smaller endowments, it said, tend to allocate far more to public equities and public fixed income, but both asset classes struggled in fiscal 2022 as interest rates increased. In contrast, large endowments with extensive exposure to private markets were better able to withstand the volatility.

Surveyed colleges and universities reported spending $25.9 billion from their endowments in fiscal 2022, up from $23.9 billion the year before. Forty-six percent of this spending supported student financial aid.

Academic programs and research received an average of 15.6%, endowed faculty 11%, campus operations and maintenance 10% and all other purposes 17%.

Changes in endowments’ market value do not represent the rate of return for institutions’ investments. Rather, the change in the market value of an endowment from fiscal 2021 to fiscal 2022 reflects the net effect of withdrawals to fund institutional operations and capital expenses — about three-quarters of participants said they used endowment money to fund some portion of their operating budget — as well as payment of endowment management and investment fees, additions from donor gifts and other contributions, and investment gains or losses.

See the accompanying gallery for the 17 largest college endowments, according to the NACUBO-TIAA study.