Hi Dan, you forgot to mention that havard University still applied for Covid relief funds even though they gave 50billion USD in endowment. They received 10s of millions of dollars in relief funds.
I'm still trying to wrap my head around the fact that an actual, real-life place is legitimately called "Hoboken", and it's not just an intentionally stupid name someone came up with to put in the Mafia videogame.
@@MaxwellTornado mf i live there and you bet your ass its a real place. not even the goofiest town name in new jersey. we have Mahwah, Ho-Ho-Kus (the hyphens are in the name), Brick, Ogdensburg, and Moonachie. there are 65,000 people living in hoboken and it rules
Another important fact is that non of these universities pay property taxes because they are "nonprofits". Yale owns 54% of the land in New Haven. In 2019 they had a $40 billion endowment while the New Haven Public School system was over $20 million in debt. The property taxes Yale would have owed the city would have covered this.
Additionally this idea of a raining day fund needed for something like covid is really just bullshit. During covid Yale fired almost all of their non union and non faculty staff like kitchen workers and janitors. While obviously they would be doing less work during covid they are a $40 billion nonprofit
A few years ago the dean of Princeton was interviewed on a podcast, and the host asked him since their endowment was so massive would he ever recommend to a donor to give the money to a smaller institution because the money would make a bigger difference there. He said no because he couldn't guarantee the money would be spent well. Princetons endowment currently sits at 34.1 billion. Mf you aren't spending that money well. These ghouls will never willingly give a thin cent to anyone but themselves.
"well spent" means invested. Remember, they're finance ghouls. They see the purpose of an endowment as growing exponentially to be as large as possible, not to actually facilitate the running of the school.
Sooo.... students have to pay a lot for colleges while colleges get a lot of money they don't spend on education. Does this mean that colleges now are in business of collecting money instead of education?
Tell me you know nothing about economy without telling you know nothing about economy. Any cost can rise if, say, the gas price is risen, and not all businesses control gas prices
@@ivandankob7112yah know, generally i am against this medication being used for shallow cosmetic reasons, but i think ozempic might be good for you as deep throating that many capitalistic boots can't be good for your health. you're not looking at the big picture, you need to zoom out more.
@@ivandankob7112They could pay to run the university for decades without taking in any tuition. Therefore, they could keep tuition the same and take a cut in their income while providing the same services.
They'll argue that their costs are increasing in order to remain competitive with rival schools.. an arms race of excessive spending and exclusivity bullshit. It's insane how much good all that endowment money could be doing in the world, but no, that's the purpose it's serving. I will NEVER donate to a college, they take more than enough from their students and their families.
Yea it’s insane how the nation has just accepted the racketeering of college tuition. At this point, criticizing tuition hikes is about as effective as criticizing congress for their self pay increases. It’s disgusting
Hi Dan, you forgot to mention that havard University still applied for Covid relief funds even though they gave 50billion USD in endowment. They received 10s of millions of dollars in relief funds.
"Why would we put a small percentage of our massive endowments towards free tuition when we literally have people lining up and competing to pay us? We're a nonprofit, not a charity." - Universities, probably
Lol, college franchising already exists, many of them are operational in China, Middle East, and Southeast Asia. So, nope it is not novelty, for quite some time now.😅
@@gregtomamichel973Money itself “works”. So those who profit off of the management from the endowment have an incentive to find ways to maximize it’s value.
As a person that grew up around Berea College and has a Mom that currently works there, it’s great to see them represented as a college that puts their funding towards the students instead of saving it for massive projects.
yeah i went to a community college and right before i started they told us that textbooks were free forever. if they can do that, far more elite schools can, too.
These days I wouldn't even consider Harvard to be just a university. I would think of it as a massive business conglomerate, with their hands in the banking, insurance, medical, and publishing fields.
Having worked at an endowment, I can say these really are important questions that not enough people are asking (especially with regards to the biggest endowments)
A lot of people are asking them but you won't see those people working at endowment departments because... the endowment departments don't want to hire people who desire change to the infinite money machine.
To add some perspective, the combined amount of endowment money of all US universities is 839 billion dollars (i.e., $839,000,000,000). The total number of college-aged Americans is about 22 million (taking a 4-year age bracket). If you divide the endowment by the people of college age, each one could get a lump sum of $38,000. That would be enough to pay tuition for a year or two, but no more than that. If only half of those 22 million attend college, you can give them 76,000 dollars each, which may cover 3-4 years of tuition at an average school, but then the money is gone. So, it's a ton of money, but not enough to give freebies to everyone.
Thank you for covering uni board of trustees and how these are increasingly being run by private equity types. A topic that deserves way more attention (uni boards set tuition and determine operating budgets).
Right. I wish the university students who attend these institutions would speak up about this more considering they and their peers are in the direct line of fire.
that's the hopeful, loving part of your humanity speaking. your cynical side knows that makes perfect sense, because why would those greedy, chalk-handed pigs feel a need to do anything that actually helps people?
It's only strange if you assume their reason for being is to educate people instead of provide a cushy, elitist place for a bunch of faculty and alumni to hang around.
The problem is that we allow non-profits to act like normal profit seeking corporations. The regulations for non-profits should stipulate that beyond a reasonable amount of reserves excess funds should go towards the stated mission of the organization, OR lose their non-profit status. This level of hoarding resources while keeping their tuition at levels that only the rich can afford isn't the behavior of a non-profit organization that has a mission of offering higher education to the best students they can.
i like that the channel is aware enough to have a person other than dan back up the actual facts because you have a very clear jokey-serious distinction
It is wild to think that the US News Rankings might literally result in billions of dollars in economic activity in trying to game those rankings to universities advantages.
Good Work always makes you feel a mix of feeling amused and incredibly pissed off at the same time. Thanks for talking about this topic which is criminally under reported
I'm a scientific researcher and PhD student in the fields of electrochemistry, molecular physics, materials science, and chemical engineering. My fields aren't nearly as expensive to work in as the likes of biological and medical sciences, but I still think it's deeply sad how these endowments could go to internally funding nearly all of a university's research without the need for external grants, paying off all tuition for students, run nearly all of the necessary facilities on campus grounds, pay all of the workers a living and thriving wage, and then still have plenty left over, for decades if not centuries. Finances are a perpetual stress for everyone, and universities do nothing but hoard without purpose. It's both infuriating and disheartening.
The endowments are huge, but they are not that huge. These larger universities likely have yearly budgets in the high 100's of millions or billions. If they put the whole worth of the funds towards paying those costs they would run out of money within a decade or two. The profits of these funds can go a long way towards reducing or eliminating tuition, but they are far from actually being able to pay for the operating costs of these universities.
@@evancombs5159 depends on the school. At smaller institutions like liberal arts colleges and tier 3-5 universities, you are absolutely correct. But at tier 1 and tier 2 universities, both public and private, they have enormous incomes from companies, real estate, contracts, alumni donations, and a whole host of other sources of cash flow. Take Johns Hopkins for example. JHU is quite literally the landlord of the NIH, a huge contract hub for the DoD and DoE via the APL, and have academics who sit on advisory boards for a number of companies in medical devices, energy, and construction. Now, their administrators are also paid exorbitantly while their staff are paid between minimum wage to a livable but not thrivable wage. Tuition is an enormous profit for the university, on top of the overhead from grants that the professors write and win-- overhead ranges from 40% to 65%, depending on the department. Beyond cutting tuition, the university is able to cut significant costs of operation. I will agree with you that it will not be able to pay the costs in full on endowment alone, but I would expect a lion's share to be covered at least.
shoutout to the guy in 5:29 doing peace sign to the camera. Was wondering how people react like everything is normal when our baige coat guy is out in the street.
Financial Aid Administrator at a large university here - it's important to note that Berea College is a work college, which is a sector of the Federal Work-Study program. So while they do not charge their students any tuition, each student is required to work a job on campus to pay for their education
Great point! Why don’t you recommend to the board at your large university that every student have the option to free tuition covered by the massive endowment so long as they work a job on campus for it! I’m sure they will be thrilled and accommodating to the suggestion
College tuition is getting way too expensive for middle class to afford even with financial aid program. In 1992 College Tuition = BMW 325I , Now = BMW M5 ( Cost per year )
Also, you don’t HAVE to go to Harvard, Yale, etc. there are plenty of great schools that don’t cause you to go into insane levels of debt. You go so that you can tell people that you went.
*Yes, yes, you do.* If you're rich and your kid is not the best student, has modest intelligence, or just wants to be lazy then they absolutely need the networking opportunities. No price is too high to make sure they are hobnobbing with the right (rich) people. It's a ticket to staying rich and, if you are savvy enough, the elite, upper class.
"Elite" universities are about rubberstamping the next generation of elites. That's why they have "legacy admissions." One would have to be very foolish to believe that Harvard teaches better science or engineering than Berkeley.@@x--.
@@user-bq2ek1xf7iWhy imagine? The U.S learned that lesson. When those poors graduate the good colleges without massive debt. Then they do radical stuff like effectively enact changes in the status quo that benefit the other filthy poors. The rich decided that radical actions from educates poors cannot happeb again. Hence schools harvest vast piles of money for the sake of stability in the economic hierarchy.
I had no idea the private college greed was THIS BAD overseas. In my country they are also little "non-profit" ghouls with no soul, but HOT DANG NOT IN THE MILLIONS OF DOLLARS. that is scary.
Freakonomics did a great multi-part series about elite colleges and why they don't follow the typical supply and demand rules of markets. Basically, as he said, their value partly comes from their exclusiveness so deans are hesitant to start eroding that. There was one example of a school that opened new campuses abroad but they're an outlier.
Behind closed doors these schools plan out how to encourage more students to apply to them knowing they won't accept any of them, just to increase how "selective" they are
Is Good Work hiring? Actual accountant and academic here - hell I'd even I'd donate some services. Fun, business-oriented, truly informative - Good Work is an actual force for good.
BREAKING: We are bringing our journalistic talents to the New York Comedy Festival on November 8th for a special business conference. Tickets can are available for purchase and flexxing on your coworkers 👇
This topic is fascinating, and basically still mysterious. Like Brown's fund gets 50% annual return and when people ask htf they do that, they answer is "oh well we are very smart and just invested in things that have higher returns" .... WHAT???
colleges have basically become banks and investment funds. and administrative costs are so high because people join the board or some random titled position at the school and get a big payday for being friends with people in high places.
I have to take one exception with our WSJ reporter here. At 14:30 when she is talking about private equity financiers on college boards she states, “it’s not illegal, it’s not wrong for them to do it”. I would contend those are two different things. It may not be illegal, but it absolutely is wrong, and it should be illegal.
Another fun college endowment fact: the Harvard endowment bought a lot of questionably legal forest in Romania some decades ago, and is now selling it off to Ikea who logs the pristine old growth
Among these top-tier institutions, students from the top 1% in income distribution make up a larger share of enrollment than all of the bottom 50% combined. These endowments aren’t necessarily going towards bringing in more kids from modest means.
Wow, I could've bought a coffee shop with one year's tuition and I would actually have a job four years later instead of a large, thick piece of paper that I literally haven't looked at once!
Agreed, that's one of the reasons why I didn't consider going to UT. My family didn't make a lot of money, and because of that, private universities ended up being a better deal. If I remember right, UT would have cost like $10k per year, but the financial aid offered from other private universities I got into knocked their tuition down to like $5k to $6k
I keep hearing that the Ivies should just expand, but I don’t think that’s the solution. If the US population keeps growing while Harvard classes stay the same size, the prestige/signaling value of a Harvard degree only increases. Everybody involved (Harvard, the alumni, the students who made the cut) wants that. The Ivies don’t exist to educate the masses, they exist to pedigree the elite. We’re not going to change that.
Here's an idea: ban pointless, non-major colleges and bring back vocational training. Smaller fees, easier use of endowments and those programs have better long term financial outcomes for grads. We could literally reseed the middle class with all the money sitting around being hoarded.
Yup, business has spent decades coasting on the rather well trained boomer working class. They're getting ready for retirement and millenials were pushed to take programming coarse. Who is gonna fix all the stuff the boomers built?
One thing i would like to know is if these restricted donations are taxed. I know for churches if you donate for a specific purpose (without the ability for the church to reallocate those funds) that donation is taxable.
