Endowments Per Full-Time Student

The 2022 NACUBO-TIAA Study of Endowments (NTSE) results provide a wealth of data for understanding university wealth. A table I’ve been spending time with is one that gives the fiscal 2022 endowment value per full-time-equivalent student.

The table provides endowment data on 635 institutions, drawn from the 678 institutions that reported data for the NACUBO study. As the Feb. 17 press release that announced the report notes, fiscal year 2022 was a particularly bad year for university endowments. In fiscal ’22, the average endowment lost 8 percent of its value. This compares to average gains of over 30 percent in FY21.

While total endowment size gets the most attention, a better measure might be endowment per full-time student. Universities with large endowments spread over many students are more constrained in how they utilize these funds. University wealth is a determinant and measure of institutional resilience, flexibility, impact and ambitions. The larger the per-student endowment, the longer time frames (measured in decades) colleges and universities can plan for.

What I’m curious to understand is how wealth interacts with, drives and determines institutional strategy. Which way does the causal arrow point?

Are institutional strategies determined by the goal of wealth creation, or does wealth drive strategy? And what do we mean when we say a school is wealthy?

Is a university’s wealth like a person’s wealth, or are better analogues to be found in other nonprofit organizations (museums, foundations, etc.) or for-profit companies?