Private University Endowments

by Harry on June 5, 2008

Via Larry Solum, an interesting article by Sarah Waldeck on private university endowments in the US. She analyses the data, arguing that it is more informative to look at endowment:expense ratios than absolute endowment sizes (on the ratio ranking, Harvard is #9 and Grinnell #1, whereas on endowment size Harvard is #1 and Grinnell #25). Waldeck points out that taxpayers subsidize these endowments (by giving substantial tax deductions to donors) and suggests that one reason universities benefit from largesse is that they find it easy to absorb large amounts of money and so are attractive to donors. They also, unlike foundations for example, have no obligation to spend the money! She is pretty convincing that there is no good literature defending the accumulation of endowments. But, like Solum, I am a bit skeptical of some of her proposals for taxing and regulating endowments. In particular, in so far as her aim is to lower tuition across the board, that seems a regressive measure: regulating endowments so that they lower tuition ends up reducing the price of an elite education for children of the wealthy (most of these schools already have incredibly low true tuition for children from non-wealthy families). Solum:

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The Spencer Foundation has just announced a small grants program, specifically to encourage philosophers to work on issues in education. The grants are up to $40k and the application process is relatively easy. This is part of a larger long-term Intitiative to help build Philosophy in Educational Policy and Practice. (Full disclosure: I’ve been working with the Spencer Foundation over the past couple of years to develop this intitiative, and am, with Mike McPherson, its co-director). One of the things I have noticed during my career is how many people who work in ethics or political philosophy start doing some medical ethics or bioethics, usually after being enticed, or invited, by medical schools to comment on various issues. Although there are numerous fascinating and difficult issues in the institutional world of education, it seems to me that far fewer normative philosophers get pulled into that arena, and the Initiative is an attempt to start to correct that. We’re especially hopeful that good philosophers who are nearing (and reasonably confident of getting), or have just gotten, tenure will explore this opportunity, even if they haven’t previously worked in this area.

One other comment. I kind of fell into working on educational issues, and did so before getting tenure. I probably would have done it anyway, but the strong encouragement of a couple of senior colleagues was a big help in assuring me that by taking up a neglected field I was not doing something that would be disapproved of. I suspect that some younger scholars worry, and usually wrongly, that philosophy of education and applied ethics generally might be frowned upon, so if you are a senior philosopher and have a junior colleague whom you think should take this up, it would be a good idea to tell them about it, approvingly, and directly.