Greedy Yale Can't Get Enough $$$

The Curmudgeon truly loves his alma mater, Yale University. Why, if it weren't for Yale, we might still have to work for a living!

Yale, however, has become a greedy little pigmeister. (Or maybe it always was.)

Recently, we received word through various alumni communications that Yale has launched a five year, $3 billion "Yale Tomorrow" campaign. The purpose of the campaign is "to expand [Yale's] capacity to contribute to a global society through its scholarship and graduates" and to make Yale an "international university."

The problem we have with this is that Yale already has an $18 billion endowment, second among universities only to Harvard's $29 billion fund. In the past year, Yale earned a tidy 22.9% return on its endowment, which we can ensure you is more than the Curmudgeon earned on its investments.

While Yale has done an outstanding job investing its endowment, it's pretty cheap when it comes to putting that money to work, spending something less than 4% a year (like most colleges, we might add) to support the University.

In contrast, most tax-exempt foundations are required by law to spend at least 5% of their funds each year on the programs they support. If Yale were to spend five percent of its endowment on the University, that would be $900 million per year, and with investment returns consistently exceeding 10%, it would still see its endowment grow at a hefty rate.

(This isn't a Yale only problem. It seems that many large private colleges have become so enamored with endowment envy--"ours is bigger than yours"--that they've lost focus on what to do with all those piles of money. Changing the law to govern them under the same standards as large foundations might help them get better focused.)

Each year, the Curmudgeon dutifully cuts a decent-sized check to Yale, and we'll continue to do so. But, over time we've started to wonder whether Yale is really worthy as it hordes its billions. There are plenty of needy organizations out there whose budgets are stretched to the breaking point as they do their good deeds (many of whom we also support with annual checks).

We're not convinced by the Yale Tomorrow campaign. Sure, Yale would like to catch Harvard, just because its Harvard. But Harvard is a bigger school, and Yale is still far out in front of the rest of the pack in terms of endowments.

We'll keep giving to Yale--for now. But we're not planning on giving any more than we have in the past. We're certainly not going to give something extra simply because Yale suddenly says it needs another $3 billion. We'd urge our fellow alumni to exercise restraint as well--consider all the other needy organizations that are out there doing good work.