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Endowment questions and answers
Endowment comparisons work when the reporting labels stay with the numbers. The directory uses the FY2025 NACUBO respondent table for size ordering. Institution profiles can use newer official releases and explain their portfolio scope. These questions address the differences that most often affect a reading of an annual report or a size list.
How is the largest endowment determined?
The size lists sort respondents by FY2025 market value in NACUBO's published table. That common-year source makes the order reproducible. It includes U.S. and Canadian institutions and affiliated organizations that volunteered to participate. A university's later official report can show a newer balance without changing its place in this historical survey ranking. See the top 100 table for the common-year order.
Why does a profile show a different figure from the list?
The profile may use a newer fiscal year or a different reporting category. An institution can disclose endowment net assets, the market value of its managed pool or the resources held by a supporting foundation. Those figures can differ even on the same date. Wesleyan's profile, for example, identifies operating reserves invested with its endowment. The label explains what belongs in the total.
Is growth in endowment value the investment return?
No. Closing value also reflects gifts, spending and transfers. A larger balance can follow a large contribution even when the investment return is modest. A smaller balance can follow a substantial distribution. NACUBO distinguishes its change-in-market-value column from investment performance. Percentage performance must come from the institution's return calculation, with its period and fee basis.
Can all of an endowment be spent on any university need?
Individual gift terms can restrict the activity supported. Money for a named scholarship or academic position does not become unrestricted because the investments are pooled. A board-designated fund has different restrictions from a donor-restricted fund. The financial statements' composition note and spending policy explain those distinctions. A headline total does not measure unrestricted cash available for the next operating budget.
Does a 5% spending rate mean 5% of this year's closing value?
Only if that is the policy's stated base. Many institutions use a trailing average of several years of values, and others combine prior spending with an asset-based component. Baylor College of Medicine describes a 28-quarter average. Reed describes a 13-quarter average. Their percentages cannot be applied to a different denominator without changing the measure.
Why do appropriation and operating-support amounts differ?
The endowment account can authorize support that reaches another account before a department spends it. A distribution can support capital activity as well as operations. Budgeted support is also different from an audited completed-year amount. Holy Cross' FY2026 summary, for example, separates its full endowment appropriation from the support included in operating results. Its profile preserves those labels.
What does a peer-return chart compare?
It compares the institution's sourced return with NCSE's size-band average for a matching horizon and ending date. The FY2025 NCSE return table covers periods ending June 30, 2025 and is net of external management fees and expenses. A June 2026 return or an April fiscal year-end covers another period. If matching inputs are unavailable, a numerical comparison would answer a different question.
Is a peer allocation the institution's allocation?
No. A size-band mix summarizes survey respondents. It is useful for seeing the average reported exposure of a group, while the institution's own allocation requires a dated source. Targets are different from actual weights. The profile graphics label those bases and identify rounding differences. A 100% total confirms completeness of the displayed categories; it does not establish that two portfolios hold the same investments.
How should Canadian institutions be compared?
The survey table converts Canadian institutions' values to U.S. dollars under its published convention. Their official accounts can use Canadian dollars and a March or April year-end. Exchange rates and portfolio scope can affect the apparent difference. McGill and McMaster keep their official currencies and fiscal dates. U.S. June-year-end peer returns are not assigned to their April periods.
Can a system, its campuses and foundations be added together?
The sum can double-count assets. A system total may include interests also reported by a campus, and a foundation can report alongside its university. The directory's totals describe the selected respondent rows, without claiming a consolidated statewide asset figure. The state pages retain each respondent's name and location, while profiles explain separate organizational and investment scopes.
Which institutions face the federal endowment excise tax?
Section 4968, as changed by Public Law 119-21, applies to qualifying private educational institutions. For tax years beginning after December 31, 2025, the law requires at least 3,000 tuition-paying students in the preceding year, with more than half located in the United States, and student-adjusted endowment of at least $500,000. State colleges and universities described in Section 511(a)(2)(B) are excluded. Supporting organizations require their own legal analysis under the related-organization rules.
What are the new tax tiers?
The rates on net investment income are 1.4% for student-adjusted endowment from $500,000 through $750,000, 4% above $750,000 through $2 million, and 8% above $2 million. The base uses assets other than those used directly for exempt purposes and the law's student-count rules. The profiles assign an institutional tier only where an institution discloses it. A survey balance alone does not establish liability or a rate.
What does a nonprofit filing add?
A Form 990 record can identify a legal filer and provide its assets, revenue and expenses for the filing period. Those amounts are often broader than endowment investments. A foundation and a public university can have separate tax identifiers, and public universities may have different filing obligations. ProPublica's structured nonprofit records are used with the named filer and tax period attached. They do not replace the institution's endowment report.
The directory links the individual reporting cases. The glossary defines the accounting and investment terms used in those profiles.
Sources for reporting and tax conventions: NACUBO respondent notes, NCSE return table, NCSE spending table and Enacted private-college tax provisions.
