Princeton University says its endowment grew by $1.6 billion, or about 12.5 percent, in the fiscal year ended June 30, bringing it to a total of $23.8 billion. The Princeton University Investment Co. (PRINCO), says it has earned 7.1 percent on the endowment over the last decade.
Princeton’s hefty endowment puts it among the top five wealthiest schools in the nation, just below Yale and Stanford, which claimed endowments of $27 billion and $26 billion last year, and Harvard, which had $37 billion.
Good performance means a good paycheck for PRINCO’s employees, who are compensated partly based on the long-term performance of the fund. For 2014, the most recent year for which public IRS tax forms are available, PRINCO reported paying $3.9 million to its top executives for managing the fund.
These large endowments are tax exempt, and universities have been criticized for hoarding these immense piles of wealth. Last year federal lawmakers led by Utah Senator Orrin Hatch wrote letters to colleges with endowments of more than $1 billion, criticizing them for raising tuition in excess of inflation.
Princeton responded by saying that its endowment funds tuition costs for many students, and noted in announcing its latest financial returns that this is still the case.
“The university relies on earnings from the endowment to cover more than half of its operating budget, as well as to help fund its highest priority strategic initiatives,” said Provost Deborah Prentice. “For example, these earnings enable the university to provide generous financial aid that makes it possible for any student who is admitted to attend, regardless of ability to pay and without the need for students to take out loans.”
The university says endowment funds cover more than 80 percent of the undergraduate aid budget and that Princeton has made an effort to increase the socioeconomic diversity of its student body. About 22 percent of the freshman class received federal Pell grants (given to students who need financial aid), which is triple the number as of 2008.
Princeton University, Princeton 08544. 609-258-3000. Christopher Eisgruber, president. www.princeton.edu.