From Rdan’s Sallie Mae post I got the urge to hunt because vtcodger mentioned greed.
Greed? Yes, I have recently learned that one person who works to manage the endowment fund for Harvard got a bonus for last year performance that was less than the year before of $2M. Imagine that! The endowment is so large and produced so much, that $2m could be handed out like a tip. (Of course, this is second hand knowledge.)
So let us see how Harvard is doing.
The fund is currently valued at $34.9 Billion.
Harvard University’s endowment earned a 23.0 percent return during the fiscal year ending June 30, 2007.
From fiscal 2001 to fiscal 2007, for example, scholarships and awards to students from University funds increased by over 94 percent, to $302 million from $156 million. Endowment dollars distributed for overall Harvard programs rose more than 70percent during the same period, from $615 million to $1.04 billion.
$1.04 billion or 3%. Only 3%. Yet:
Since its inception, HMC has averaged an annualized rate of return of 13.3 percent.
The industry average is: the median for the 151 large institutional funds as measured by the Trust Universe Comparison Service (17.7 percent), as well as the 20.9 percent that marks the top 5 percentile.
Granted, I’m sure and as they say there are restrictions. However, Harvard says they are trying to spend 5% annually. They note tuition only covers 2/3 of the cost. Well if they really tried to get to that 5%, they would have another $705 million for it. At their tuition of $47,215, that’s 14,932 students. The total enrollemnt is only 25,017 including part-timers.