A Closer Look at Our Piggy Bank

Emory University’s position as a leading private university in the south has been cushioned by a massive endowment which schools of equal or greater ranking are nowhere close to. The history behind it all is well known to most Emory students and staff, and possibly to most Atlanta natives, as we are frequently referred to as ‘Coke University.’ After being kicked out of Emory, Robert Woodruff years later decided to give Emory a huge donation that they took gleefully. And after years of investing, and years of Coca-Cola success, Emory sits pretty with over 6 billion dollars in their endowment. Where does all this 6 billion go to? Well sadly (I think), only a small percentage of this endowment will directly benefit us as students and faculty on campus.

Source: http://www.emory.edu/home/giving/general-index-endowment.html

After doing some research on ‘The Emory Endowment’, the most important facets of Emory became obvious. Under the ‘Why Support Emory’ tab, the three main heading which came up were: Scholarships, Research, and Faculty. Donors have the opportunity to see the cutting edge technology and engagement that we as a community are striving for, through well designed features and news about our AIDS research, our highly sought after study abroad trips, and the millions of dollars spent each year on loans, grants and scholarships. By the looks of this website, one would think that Emory’s main goal is to develop a holistic sense of success on our campus; so that outsiders will become more enamored and give their money, but also that alumni would reflect and see what great heights Emory students and faculty are reaching.

According to the NYT “Some Colleges Have More Students From the Top 1 PercentThan the Bottom 60. Find Yours.”, Emory is #2 among Elite Colleges to enroll the highest percentage of middle to low income students. That’s great, because it means that Emory has a lot of money dedicated to the Scholarship umbrella of its operational budget, (or students are more in debt after leaving college). However, what’s interesting to note is that Emory is nowhere near  close to managing its ‘diverse’ acceptance list as there is a major gap in where these alumni are now. About 1.8% of students at Emory came from a poor family but became a rich adult.

How does a 6.7 billion dollar endowment fix that staggering  statistic? Although as an institution we brag about the great things that Emory students and alum have accomplished, there is an elephant in the room when it comes to where these students end up 4 years after leaving the Emory bubble. Our (Emory’s) pockets are padded well, but the hands that distribute and control are a bit lopsided.

This makes me question what Emory’s gauge of success is. Is their priority to see how best to keep the news and attention within the university itself, or is it to properly equip over 1000 students each year to go out and dominate in which ever field they pursue?

 

 

A Tale of Fatter Pockets & Lesser Mobility

 

Public universities are primarily funded by a state government while private schools are run as an educational non-profit institution. Private universities do not receive funding from a state government but instead is primarily funded by donations and gifts.

A school’s endowment is essentially a fund that has been given to them through the government, donations, and gifts. This money is then invested and a small percentage (usually 4-5%) of  the returns on investment is what a university can now use to run their day-to-day operations.

Source: http://powershift.org/sites/wearepowershift.org/files/Understanding_University_Endowments.png

We hypothesized that a school’s endowment could be a strong indication of the quality of education the students received. However, we do realize that a school’s return on investment is not solely spent on prospective and current students, but also on other operational budgets that are necessary for a smooth running system.

It has been often stereotyped that private universities have an overall better quality education and as a group, we wanted to look at the role of endowments in this deception. Do public universities tend to have less money in their operating accounts than private universities? We chose universities which topped the ranks for highest endowment for both public and private schools and decided to compare their endowments

From the graph above, the blue bars represent public institutions while the green bars represent private institutions. As is obvious from the graph, private schools tend to have a larger endowment than most public schools, with the exception of a few schools such as University of Michigan and Texas A&M University that have a larger endowment than 50% of the ‘richest’ private institutions.

One would have made the assumption that private schools would have a larger endowment, because of prestige but we see that history also is a major contributor to sizable endowments. For example, although Emory may not be in the top ranking private schools, it still has a large endowment due to its historical connections with Robert Woodruff, past president of Coca-Cola. And also Harvard, an outlier on the graph, has a hefty endowment due to its prestige, as a top ranking school with generous alumni.

However, if we look at the income mobility of the students who attend these schools with hefty endowments, most are nowhere near the top of the list. The lapse in results poses an issue to us as a group, as we begin to question the allocation of this 4-5% return on investment to these schools. Do most schools see mobility rate as a marker of growth and excellence in their academia community? If so, would more of their operational budget be spent on improving curriculum and opportunities within the college that exposes students to better, higher paying jobs?