A UC Merced professor was featured in a short documentary segment about college endowments and how Ivy League schools stay rich.
Professor Charlie Eaton appeared in the CNBC segment called “How the Ivy League Stays so Rich: College Endowments,” which pursues a number of answers to questions including why tuition continues to rise when schools have massive endowments, according to CNBC.
Endowments at U.S. universities total more than $616 billion worth of assets, according to the documentary, and most of those are found at a few affluent schools. For example, Harvard University has $39.2 billion, which compares to Facebook’s $41.1 billion and Amazon’s $41.2 billion.
The schools on average spend just 5 percent of their endowments every year while tuition continues to rise, the documentary says.
“My concern is people seeing these institutions as islands of wealth that aren’t accessible to ordinary people,” Eaton says in the documentary.
He goes on to say that when the economy takes a downturn, schools pull back on their endowment spending. “If there’s a downturn in the economy, I wouldn’t count on Harvard University stepping up to enroll more low-income students,” he said.
The documentary covers the history of endowments and when philanthropy began to take off in America. Then it takes a look at how the money is spent and how the schools, which are treated like nonprofits, are taxed.
The roughly 22-minute documentary is available at www.cnbc.com.