[Last updated (2/9/2016, 11:46 a.m.) with information from a copy of the final letter.]
Universities with large endowments are once again coming under the congressional microscope. Unlike in 2007 and 2008, however, this time it’s just the private institutions — the 56 whose endowments were valued in excess of $1 billion as of the 2014 fiscal year — that will face scrutiny over the “tax preferences” afforded those endowments.
Two key congressional committees are sending letters to the institutions this week, demanding that they provide at least three years of financial data about their endowment-spending policies, the fees they pay to their money managers, and the share of endowment going toward student aid. Here is a copy of the letter. The letter’s questions also ask about the institutions’ “naming rights” policies for donors, and policies on conflicts of interest for college officials and trustees involved in investment decisions.
The demands come amid growing public debate over endowments’ tax-exempt status. The issue has been receiving greater attention in recent months in the wake of a report showing that federal tax policy favors wealthy institutions. The news media also focused on the issue following publication of an op-ed in The New York Times by a professor who questioned whether hedge funds, rather than students, were the primary beneficiaries of universities’ endowments. As the heat has been turned up on wealthy endowments, some college leaders have also publicly defended them.
One of the committees pursuing the information this time, the Senate Committee on Finance, is the same one that pursued colleges aggressively in 2008. The intensity of that inquiry lessened as endowment values fell during the Great Recession, although the chairman of the committee at the time, Charles E. Grassley, Republican of Iowa, continued to press the issue.
This round of scrutiny, which also involves the House of Representatives Committee on Ways and Means and its Oversight Subcommittee, has been in the works since at least the fall, which may explain why the letter refers to the 2014 fiscal year.
New data on endowment values for the 2015 fiscal year were released late last month.
Following is a list of the 56 colleges that are receiving copies of the letter:
- Amherst College
- Baylor College of Medicine
- Baylor University
- Berea College
- Boston College
- Boston University
- Bowdoin College
- Brown University
- California Institute of Technology
- Carnegie Mellon University
- Case Western Reserve University
- Columbia University
- Cornell University
- Dartmouth College
- Duke University
- Emory University
- Georgetown University
- George Washington University
- Grinnell College
- Harvard University
- Johns Hopkins University
- Lehigh University
- Massachusetts Institute of Technology
- Middlebury College
- New York University
- Northwestern University
- Pomona College
- Princeton Theological Seminary
- Princeton University
- Rice University
- Rockefeller University
- St. Louis University
- Smith College
- Southern Methodist University
- Stanford University
- Swarthmore College
- Syracuse University
- Texas Christian University
- Trinity University (Tex.)
- Tufts University
- Tulane University
- University of Chicago
- University of Notre Dame
- University of Pennsylvania
- University of Richmond
- University of Rochester
- University of Southern California
- University of Tulsa
- Vanderbilt University
- Wake Forest University
- Washington & Lee University
- Washington University in St Louis
- Wellesley College
- Williams College
- Yale University
- Yeshiva University
Goldie Blumenstyk writes about the intersection of business and higher education. Check out www.goldieblumenstyk.com for information on her new book about the higher-education crisis; follow her on Twitter @GoldieStandard; or email her at goldie@chronicle.com.
