With $11.1 billion endowment growth, students and faculty call for revised funding priorities
After University sees third-highest rate of return since 1970, students and faculty members called for Yale to reallocate its funding to better support childcare, public health courses and faculty hiring.
James Larson, Senior Photographer
After the University’s Oct. 14 announcement that its endowment had skyrocketed to $42.3 billion during the 2021 fiscal year, students and faculty weighed in on University services that they feel remain in dire need of funding.
The University’s endowment had a 40.2 percent rate of return during the 2021 fiscal year, Yale’s highest rate of return since 2000. Although students and faculty members were broadly optimistic that the increased endowment could ease the financial burdens of the Yale and New Haven communities, some also expressed concern that the University would be reluctant to spend meaningful endowment funds on investing in the city or School of Public Health, hiring new members of the Faculty of Arts and Sciences, or covering student services like laundry and printing.
“It feels like Yale has X billion dollars to say that it does, and to occasionally buy some first years lobsters and ice sculptures, but when undergrads and New Haven at large have issues, Yale suddenly can’t use the funds to help efficiently and in the way the community asks,” Abigail Grimes ’23 told the News. “If the money isn’t for Yale, what’s it for? Having the funds to prevent harm and not doing so is violence at the end of the day.”
University spokesperson Karen Peart told the News that endowment distributions to the University’s operating budget have increased at annual rates of 4.7 percent and 6.9 percent over the past 10 and 20 years, respectively.
“The endowment contains thousands of funds established for specific, legally restricted purposes; only 24% of spending from the endowment is unrestricted and available for general purposes,” Peart wrote in an email to the News. “An additional 25% is specified to support teaching and research, with 19% directed towards facilities and operations and 18% towards financial aid. The remaining endowment funds are designated to support various departments or programs.”
Logan Roberts ’23, the financial accessibility director for the Yale College Council, said that high endowment returns are “good for everyone” as long as they are allocated “correctly,” but expressed concern that student issues often go underfunded and unaddressed. Roberts pointed to lowering the costs of student laundry and printing services as concrete steps the University can take to ease the financial burden on students.
In light of the recent endowment return, Roberts said, students struggling financially is a “policy choice” on Yale’s part.
“I think there was a good faith effort to invest in first-gen and low-income communities and support first-gen and low-income students, so I do want to make that disclaimer,” Roberts said. “I’m heartened to see that they’ve gotten this return, but I’m skeptical that students will actually see the fruits of it in their daily lives, which is concerning.”
While Roberts acknowledged that the endowment cannot be liquidated and spent at will, he said that the scale of student demands was relatively small when compared to Yale’s assets as a whole.
Peart explained that endowment distributions support the University’s ability to cover the full financial need of undergraduate students and offer universal need-blind admissions.
Professor of Economics John Geanakoplos told the News that the endowment returns give Yale “a tremendous opportunity to excel.”
“I hope that Yale keeps its eye on the ball, and that is scholarly research and inspiring teaching,” Geanakoplos said. “That’s the mission of the University. Yale’s FAS faculty has gotten smaller relative to its peers. We had a goal to reach 800 FAS faculty, and we’re now at 676. Because of 2008, we set our sights lower from 800 to 700. There’s no reason any longer with this new endowment to lower our sights.”
During his tenure as FAS Chair, Geanakoplos authored several reports on COVID-era spending, arguing that the hiring and salary freezes the University instituted during the pandemic were inconsistent with the endowment smoothing rule, which warns against the University making abrupt changes in spending.
Geanakoplos added that the University needed an “excellent and diverse” 800 FAS members, a goal that could not be met without paying faculty competitive salaries.
Alex Chun ’24 recalled being excited to witness the increased endowment return, suggesting that the investment return could be a way to celebrate the “remarkable career and legacy” of David Swensen GRD ’80, who was Yale’s Chief Investment Officer until his death in May 2021.
“As an aspiring venture capitalist, I was particularly thrilled to hear from Matt Mendelsohn, the CIO of the Yale Investments Office, that the endowment had particularly strong returns in venture capital,” Chun said. “With Mendelsohn in charge of Yale’s VC portfolio, I would love to see the Yale Investments Office allocating a larger percentage of the endowment in private capital every year.”
Chun added that he hoped the increased endowment would directly benefit the student body through financial aid, research grants or academic programming.
Several students, however, were alarmed by the University’s high rate of endowment return after a year that has seen many communities economically disadvantaged by the COVID-19 pandemic.
Jesus Ramos ’25 told the News that he was “shocked” when he heard about the high endowment return.
“During a year where so many people lost their livelihoods and struggled financially, Yale continued to gain money despite the circumstances,” Ramos said. “It seems almost ridiculous that an institution such as Yale was able to benefit from the pandemic while so many people, especially those from communities of color and low-income communities, were greatly impacted, whether that meant losing loved ones or their form of income.”
Krishna Mudumbi, a postdoctoral pharmacology researcher in the School of Medicine, said that the endowment growth itself is not concerning. However, he said he hoped that the higher returns translate into greater resources put towards the University community.
“I have no issue with Yale making money… but my wish would be to see that some of it is put towards childcare,” Mudumbi said. “It’s very difficult for parents who both have to come into work, and there’s no shortage of days that we need help with our children.”
Mudumbi, a father of two young children, noted that “crisis care” assistance was made available during the pandemic, which enabled him to hire at-home babysitters for a certain number of days. Still, he said that Yale’s childcare facilities have long been unaffordable for postdoctoral researchers, who do not receive childcare stipends.
Jackson Higginbottom YSPH ’20, a program administrator at the Yale School of Public Health, told the News in early October that he did not think a reasonable amount of Yale’s endowment was directed towards YSPH.
“If you’ve talked to any YSPH student, you’ll hear how they feel neglected by the University,” Higginbottom said. “While our large lecture classes are held in the School of Medicine, most of our department classes are taken in the windowless, basement of LEPH. We don’t have a dining hall, special housing, or dedicated study spaces outside of the lobby of 47 College St.”
Higginbottom noted that only 0.6 percent of Yale’s endowment was directed towards YSPH as of December 2019.
For some members of the Endowment Justice Coalition, a student group that advocates for Yale to divest its endowment from the fossil fuel industry and other areas that the group deems unethical, the size of Yale’s endowment is problematic in and of itself.
“In my opinion, the purpose of the endowment is not to be spent but to continue to protect and maintain its structures of wealth hoarding,” Garrett Frye-Mason ’23, a member of the coalition, told the News. “The Yale administration frequently remarks that the University does not spend the endowment because it is saved for ‘a rainy day.’”
Frye-Mason said, however, that this claim was “rendered ridiculous” by Yale’s high rate of returns after the “rainy day” of the COVID-19 pandemic.
University Provost Scott Strobel told the News in April 2021 that the pandemic had cost Yale over $325 million as a result of lost revenue and additional COVID-19-related expenses.
Josie Steuer Ingall ’23, another EJC organizer, suggested that Yale’s reluctance to spend its endowment was evidence of wealth-hoarding as “an intellectual project,” arguing that the University acquired capital in order to differentiate itself from other institutions of higher learning.
“Especially as higher education has become more cutthroat, more competitive and more clearly positioned as a commercial product in the neoliberal era, I think the way that Yale continues to differentiate itself is with the sheer volume of its money,” Steuer Ingall said.
Steuer Ingall suggested that Yale already had sufficient funds to provide for future generations at the school while still spending money on academic programming, student healthcare infrastructure and increased contributions to New Haven.
Yale’s voluntary contribution to New Haven was $13 million this year, and University President Peter Salovey has expressed optimism about increasing the voluntary payment during his tenure.
Grimes also emphasized the importance of funding mental health care through Yale’s endowment, describing the current system as unacceptable.
Peart, however, pointed to the creation of the YC3 program last spring, as well as the addition of six full-time positions within Yale Mental Health and Counseling, as evidence of the University’s investment in mental health and wellness access.
“These continued efforts demonstrate Yale’s commitment to providing a more accessible, less intimidating path for students to seek help right where they live and study,” Peart said.
Grimes wrote an opinion piece in the News about her experience with Yale mental health services in March 2021.