Wealth and Want Part 1: Multi-Billion Dollar Endowments

US higher education reflects and reinforces a world of increasing inequality, injustice, and inhumanity. This system (or some would call it an industry) should function as a conduit between good K-12 education, good jobs, and the wellness of all its citizens, whether they attend or not. But increasingly, it does not. 

The first installments of the Wealth and Want series examine the concentration of wealth in the US higher education system.  And this article focuses on loosely regulated university endowments. While many American schools struggle to provide basic amenities and academic resources, elite universities boast endowments that rival the GDPs of small nations. And they pay little in taxes. 

The Endowment Elite and Ill-Gotten Gains

At the pinnacle of higher education wealth are Harvard ($49B), The University of Texas System ($44B), Yale ($40B), Stanford ($36B), and Princeton ($34B). These institutions have amassed endowments that provide a steady stream of income for investments, scholarships, and research initiatives. How their money is invested is rarely known.  

Endowment managers at elite schools typically make more than a million dollars a year. The most elite schools pay their managers $5M-$10M a year, with compensation largely based on returns. But those managers still get hefty salaries even when they lose money.

There are more than 120 schools with endowments greater than a billion dollars. But the 20 richest university endowments together hold more wealth than the other 5000 or so other higher education institutions combined. 

Elite endowments are often the result of centuries of fundraising, donations, and strategic (sometimes shady) investments. For many of the most prestigious schools, it began with land theft and generations of forced labor. 

For other wealthy schools, it was the result of philanthropic robber barons like Johns Hopkins (who also held captives), Andrew Carnegie, Leland Stanford, John D. Rockefeller, Cornelius Vanderbilt, and James Buchanan Duke who made their wealth through mass exploitation of people and the planet. 

For wealthy flagship state universities, it also came from land theft. In the case of the University of Texas, its wealth largely came from, and to some degree still comes from the exploitation of fossil fuels that jeopardize the planet.

Historical Context and Structural Inequality

• Land Theft and the Founding of Institutions: The establishment of many American universities, including Ivy League institutions and those founded under the Morrill Act, was often intertwined with land theft from Native American tribes. This practice, often referred to as "land dispossession" or "Indian removal," was a key component of Manifest Destiny and the expansion of European settlement across the continent.
• Ivy League Universities: Institutions like Harvard, Yale, and Columbia were granted land by colonial governments, which often acquired these lands through treaties that were coerced or violated. They also used enslaved labor to build and maintain their wealth.  
• Funding Models: The funding models for public higher education often favor larger, research-intensive universities. This can lead to underfunding for smaller, less prestigious institutions, particularly those serving marginalized communities.
• Endowment Inequality and Profits Over People and Planet: Endowments are a powerful tool for wealth accumulation and institutional advantage. The concentration of endowments in a few elite universities can exacerbate existing inequalities and create a self-perpetuating cycle of privilege.  These endowments have also engaged in shady investments that perpetuated worker oppression, genocide, and environmental destruction. 

Related links:

Pay and Chief Investment Officers: Good Money while It Lasts

Tax Wealthy Private Universities Now (Paul Prescod, Jacobin)

Thinking about climate change and international study (Bryan Alexander)

[Editor's Note: This article first appeared at BryanAlexander.org.]

Greetings from London, where I’m attending a CIEE event on international study. It’s good to be back in this city, if only for a few overscheduled days.

I’d like to share notes for my talk here. Since I gave it without slides, the only images I’ll share are screen grabs and photos I took, like this one of the unsuspecting audience:

 

To frame my quick talk, recall my old question: how can higher education best respond to the climate crisis?

I began with a big picture overview: the specter of global warming as a grand civilization crisis. I noted the sheer size and complexity of the problem. It impacts everything, including climate change. I mentioned the many ways colleges and universities can react and be influenced by the crisis, then focused down to the question of international study. How can we reduce the carbon footprint of study abroad? What are the available options? 

I didn’t get to show this Climate Reanalyzer image, but described it.

One option is to consider alternatives to flying. Students can take trains to destinations. This can work well in Europe, coastal China, America’s east coast, and… not many other places, given the limited availability of train infrastructure. We can also turn to ships and boats, but similarly that also only works in a limited sphere. Using these options a study abroad program would have to re-localize or regionalize its scope.

A second option is to go virtual. We already know how to do virtual trips through combinations of web content, live video, and asynchronous video. There have been examples of immersive experiences in virtual reality for a long time. Now extended reality (examples: Hololens, Magic Leap, Vision Pro) offer even greater immersive possibilities. So student can have *some* experience of another part of the world. Yet this runs into all kinds of problems, such as yielding a much narrower and shallower experience, not to mention cost and digital divide challenges.

(I told the crowd a little about my own experience with decarbonizing professional travel)

A third option is for study abroad to embrace climate change at a programmatic level. First, students can study global warming through themed internships, exchanges, formal classes, and just cultural immersion. Host groups can identify climate-relevant opportunities, from civil engineering projects to solar installations, agricultural experiments, and more. Imagine an economics major working with a company attempting to decarbonize operations, or a political science student interning with a government wrangling climate policies. As I keep saying, climate change is deeply transdisciplinary.

Second, students could travel abroad for non-climate topics, but explore global warming in that content. Imagine, for example, a student spending months in Madrid to work on their Spanish language and culture understanding. They can keep an eye out for how climate appears there: consumer behavior, popular attitudes, new regulations, emerging products and services, even the language used. This will take some preparation on the “sending” institution’s part, perhaps through a climate change literacy program.

As with anything involving climate, or higher education, there are quality questions. How can we assure that such experiences are good and germane? How do supporting faculty and staff learning climate issues and their applications in these contexts? Institutions of all kinds – colleges, nonprofits, companies, governments – will have to do this carefully. Realistically, some might not.

I wrapped up this quick sketch with advice to the audience, recommending that everyone in the study abroad world not only get up to speed on climate change, but look ahead to changes in this topic. We might expect (for example) rising governmental or cultural pressure against flying. We should also anticipate developments in air travel technologies, such as the emergence of new jet fuels and the return of airships. Study abroad might take to the skies once more.

…and that was a lot to do in 15 minutes, but I managed in 14. “Like drinking from a firehose” observed the program’s moderator.

Afterwards, there was a good deal of interest from conference participants in conversation. I raised climate during question and answer periods for some other sessions, and presenters took the topic seriously. I got the impression that this was a topic either new to them, or one they hadn’t hashed through out loud. I hope my quick presentation was a useful contribution.

At a meta-level, I’ve been traveling a lot this summer, reaching locations on two continents via car, train, and aircraft. I’ve also done a series of virtual events. I am by no means satisfied with my own professional carbon footprint, and am working on it. 

From yesterday afternoon’s walk.