College endowments illustrate just how deeprooted inequality is in higher education.
U.S. college endowments held about $630 billion in fiscal 2019. But just a few schools account for much of that: More than one-third comes from the top 10, led by Harvard, the University of Texas, and Yale. By comparison, the assets of the approximately 100 historically Black colleges and universities (HBCUs) total just under $4 billion, with Howard University holding the most—$712 million as of June 2020.
The disparity reflects the structural inequalities in U.S. society. For years, the wealthy schools have churned out graduates who amassed large fortunes and made big donations to their alma maters. For much of the past decade, either Harvard or Stanford has taken in the largest haul. In fiscal 2020, Stanford raised $1.36 billion in donations and Harvard $1.2 billion, more than the entire endowments of most colleges. Also, larger endowments can take bigger risks in search of higher returns and are offered the chance to invest in fast-growing companies before they go public— opportunities not available to poorer schools.
Yale, with $31 billion, tripled its endowment over the past two decades thanks to a portfolio that includes hedge funds, private equity, and venture capital, which allowed it to get in on the ground floor of successful startups. At the other end of the spectrum, Florida A&M University, a 134-year-old historically Black college with an endowment of about $100 million, has barely enough to fund scholarships for some of the neediest students, let alone invest in risky venture capital.
The difference in endowments leads to an ever-widening gap in everything from the ability to give student aid and attract top professors to improving campuses and building cutting-edge science, technology, engineering, and mathematics (STEM) complexes. According to a 2018 U.S. Government Accountability Office report to Congress, the average endowment amount per student was $15,000 for HBCUs, compared with $410,000 for non -HBCUs of the same size.
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