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:
Tax Wealthy Private Universities Now (Paul Prescod, Jacobin)
