Courtesy of Amay Tewari

The University’s endowment soared to $42.3 billion during the 2021 fiscal year, the Yale Investments Office announced Thursday afternoon. The 40.2 percent return was the highest in two decades. 

During the 2021 fiscal year, the endowment increased by $11.1 billion, up from $31.2 billion as of the end of the 2020 fiscal year. This year’s 40.2 percent return rate was the third highest since 1970, and vastly surpassed last year’s return of 6.8 percent. Over the ten-year period ending on June 30, 2021, the University’s average annual endowment return was 12.4 percent.

“It was an extraordinary year for the endowment, which will benefit the Yale community now and for generations to come,” Matt Mendelsohn, the University’s Chief Investment Officer, said in a press release. “While we are pleased with this gain, we define success over longer periods of time, measured by our ability to provide stable and growing support to the university so that it can carry out its mission.”

Yale’s peer institutions have also posted record-breaking return rates at similar or higher levels. Among other Ivy League universities that have posted their 2021 fiscal year return rates, Brown University returned 51.5 percent, Dartmouth College returned 46.5 percent, Cornell University returned 42 percent and the University of Pennsylvania returned 41.1 percent. Other schools whose 2021 return exceeded Yale’s include Washington University in St. Louis at 65 percent, Duke University at 55.9 percent and the Massachusetts Institute of Technology at 55.5 percent.

On Thursday afternoon, Harvard University announced a 33.6 percent return on its endowment.

Some institutions, such as Dartmouth, have used their endowment growth to make immediate changes that impact the student body. Following Dartmouth’s Monday announcement of its record-breaking endowment growth, the school’s administration announced it would expand financial aid, increase student minimum wage and give bonuses to faculty and graduate students with stipends. 

“This year’s strong return helps position Yale to accelerate the implementation of our academic priorities, and to continue the university’s intense work to increase affordability and access for our students,” University President Peter Salovey wrote in an email to the News. “We are giving careful consideration to how we can additionally use greater resources in targeted ways to support faculty, students, staff, and our wonderful home city of New Haven.”

Yale’s investment strategy emphasizes long-term performance with careful balance of risk exposure and return, the press release reads. The University invests across asset classes, including absolute return, public equities, real assets and venture capital. Mendelsohn told the News that the endowment had particularly strong returns in venture capital, though the market’s general elevation benefited Yale.

The returns for fiscal years 2019, 2018, 2017 and 2016 were 5.7 percent, 12.3 percent, 11.3 percent and 3.4 percent, respectively.

The endowment is the University’s largest source of revenue. Last year, spending from the endowment accounted for 35 percent of Yale’s $4.3 billion operating budget, according to the press release.

The University targets an annual endowment spending rate of 5.25 percent, but the annual expenditures are determined by a spending rule designed to smooth short-term fluctuations in the endowment value, per the press release. The University does not spend more heavily during times of high investment returns so that it has support for future generations during “periods of stress,” the press release reads.

“The goal of Yale’s investment and spending policies is to be equitable in providing resources across the generations of the university’s students, faculty, and staff, now and far into the future,” Salovey wrote in the press release. “Strong long-term performance of the endowment allows Yale to remain vital for future generations.”

Still, both students and members of the New Haven community have repeatedly called on Yale to increase its voluntary contribution to the city, which currently stands at $13 million per year.

Additionally, students have staged high-profile protests calling on the University to divest from fossil fuels. In September, Harvard announced it would no longer invest in the industry.

Last spring, Yale unveiled new principles for fossil fuel investments.


Zhemin Shao covers the University's endowment, finances and donations. He previously covered the Office of Career Strategy. Originally from Seattle, WA, he is a sophomore in Silliman College.