Comparing Higher-Ed and Foundation Endowments with at Least $10 Billion in Assets Under Management

When U.S. Sen. J. D. Vance proposed a bill last December that would increase the excise tax from the current 1.4% to 35% on the net investment income from the endowments of secular, private, nonprofit colleges and universities with at least $10 billion in assets under management, his office said it would apply to the endowments of 11 schools. They are Harvard, Yale, Stanford, Princeton, the Massachusetts Institute of Technology, the University of Pennsylvania, Northwestern, Columbia, Washington University in St. Louis, Duke, and Vanderbilt.

These top higher-education endowments, it said, hold a combined $270 billion in assets.

Six private philanthropic foundations, which are also nonprofit, held at least $10 billion in assets as of the end of 2022, according to FoundationMark projections. They are the Bill & Melinda Gates Foundation, the Lilly Endowment, and the Ford, Robert Wood Johnson, William & Flora Hewlett, and Bloomberg Family Foundations.

At the top of the “FoundationMark 15,” these six endowments collectively hold a total of more than $163 billion. The current excise tax on the net investment income of private-foundation endowments is 1.39%.

Overall, as reported by Inside Philanthropy’s Michael Kavate yesterday, “Foundation assets could soon reach double the value of the combined endowments of the top 700 richest U.S. universities, whose assets totaled $807 billion as of June 2022,” citing the most-recently available data from the National Association of College and University Business Officers and TIAA.

Foundation assets were at an all-time high of $1.5 trillion last December, FoundationMark finds. “Even as the sector grows more top-heavy, its overall assets are swelling partly due to the sheer number of institutions, with more than 125,000 private foundations, compared to fewer than 5,000 colleges,” Kavate notes.

This article first appeared in The Giving Review on January 30, 2024