Mission Endowment Fund: Fill & Download for Free

I think other than Alexandra Martirosian there are a lot of things that are falsely stated across answers here.Before I get into some of the dark secrets I’d like to point out a few things.Elite colleges—and I mean other than legacy students, athletes, etc that make up a small portion—don’t discriminate against certain ethnicities. It is silly to think that because you are Asian you won’t get into them. A high portion of a lot of these schools are Asian. Almost all of the peers in my math classes were Asian. (There is an exception to this rule, and that is probably Harvard who frequently accepts about 30% for their incoming class from legacy alumni.)Given the extremely tiny portion of students that score high, a great SAT score gets you into almost all of the colleges you are applying to, whereas a high GPA with a low SAT score will probably not get you into any of them. If you don’t believe me, you don’t have to, as only approximately 3,000 to 6,000 kids score higher than 1,550 each year on the test.Race and ethnicity may matter, but this is really an extension of point 1, where it is such an incredibly tiny portion of a demographic that makes up the school. It never subtracts or displaces a kid that “deserved” to get into the school. Socio-economic disadvantage is real. People need to get over treating it as if it is some kind of fairytale. Nobody is going to convince that the kid who had parents that were drug-addicts for all of his life has an equally easy time accessing the same resources that a privileged white kid does who lives in the suburb his or her whole life. We have equality, but certain kids need equity.If you look at the profiles that a lot of these colleges accept, you’ll find that they end up choosing an extremely competitive class for their profile.Maybe I missed a few things, but now for a few of the dark things I have.Berkeley has a very ugly mathematics building. People often talk about it sticking out like an ugly sore blue-gray abomination wrinkled in a square shape lifted up like a tower nobody wants to see.Here it is, beautiful Evans Hall.I should mention that other than the clocktower, Evans is the tallest building Berkeley has. I think it goes up about 40 meters or so.It’s got a great history—it served as the take-off point for the entire west coast’s ARPAnet access—,namely, starting the internet’s existence.If you go up far enough, and I don’t remember exactly what floor this begins, but you will see this in the classroom.See how small that window is opened?When you go up to a far enough floor, the windows only move that much. They won’t open any farther than that.It is intentional.Berkeley’s Evans Hall has a dark story behind it. A series of them. Almost every year, at least one person has jumped from the top, or the roof to their death.I remember my first year there, I saw caution tape around the front entrance of the building. I thought to myself, “they must be renovating something!”Later, finding out through the school’s newspaper that somebody had found the access to the roof unlocked, and had gone there to end his life.In fact, I know about a building in MIT that has a common story. In fact, the real darkness that falls upon these institutions is that they are a source of extreme stress for a lot of undergrads.Berkeley graduates a small number of mathematics majors each year. Maybe 100 students or so in each class of 5,000–8,000 kids.And these kinds of numbers trend similarly across a lot of the hard sciences.We can debate about which majors suffer more, which majors have a more difficult curriculum, which offer more options in life.But it is without a doubt a disproportionate amount of kids out of the hard sciences doing this to themselves.Berkeley, like other colleges that pride themselves on their rigorously prestigious science programs, don’t slack when it comes to handing out difficult midterms.Whether it is external pressures from home, or it is the school’s curriculum itself, or it is the quota system Berkeley has in place for their grades they can hand out.I want everybody at the future in one of these colleges to know; there is help.Like, there is actually always a solution. Being at one of the best institutions studying what some of the best before you have studied. It isn’t easy. It was never suppose to be.But it certainly never meant that you needed to feel like you were so unworthy to live that the only decision left is to take your own life.Please look for help.My other story about these universities revolves around endowments.Specifically, what do endowments do?More specifically, what regulations are there around endowments?Harvard’s endowment fund has about $40 billion dollars in it.There are articles written about this; where, schools are just becoming names that own hedge funds.Funny thing about endowment funds—they’re not taxable!There is a lot of criticism about them. Namely, the fact that schools have placed a lot of the money into something called “alternative investments”. Usually a funny phrase for “maybe real estate”, “maybe stock market”, or “maybe something else”.And, some schools, like Yale, have lost 30% in years such as 2009.The most interesting thing about most all endowments is that their main mission is to support the university, and then teach and research.Where they spend some percentage of the fund on that mission in order to have it self-sustain.Except, schools like Harvard started with maybe a few billion or so in the early 90s.And today, they have almost in excess of $40 billion.While they do show percentages of the endowment paying for things, the amount that goes into these globbed alternative investment categories is really unclear.And what is done with that money is equally unclear.The National Center for Education Statistics states that the cumulative worth of the top 20 schools with the largest endowments is a sum total of $542,240,202,000.$542 billion dollars. Untaxed dollars. Dollars that continue to increase each year.While tuitions increase for almost every single one of these schools. Costs go up.I think we are going to come to a point, maybe we have already crossed it, where we need to address exactly what goes on with these funds. With any concentrated asset in excess of half a trillion dollars that is controlled by 20 entities—20 powerful entities—I think it is a requirement for every trace to be transparent with no room left to the imagination.

I think that Steve gave a very good overview of the situation. I come from the other angle, however, and think that although universities should pay talented employees a solid salary, they have the right to expect that the people they hire will share a sense of mission for the university -- in MBA terms, this would be some intrinsic motivation in addition to the extrinsic motivation provided by the money. In other words, you trade off market-level compensation for a sense of purpose, as well as other benefits of university employment.Notably, David Swensen of Yale (obviously one of the best endowment managers out there, if not the best) shares this philosophy. His annual compensation was $1.3 million as of 2007, per this NYT article:http://www.nytimes.com/2007/02/18/business/yourmoney/18swensen.htmlMy personal opinion is that expert investment management is a skill like anything else, but because the skill itself involves money (and growing it), people assume that one's motivation for doing it must also involve maximizing one's own money. In other words, if you're good at managing money, it must follow that you want as much money yourself as possible. And since there are people out there in the wider world making huge amounts of money, something must be wrong with you if you'll take a lower-paying university job (even if that lower pay is still substantial by most measures). By contrast, if other equally talented, motivated people with different areas of expertise (even in fields like medicine or law, which can pay pretty well) decide to work for a university or nonprofit (or government, for that matter), I think people understand that, because they haven't tied that person's professional motivations so tightly to the acquisition of money.So, to return to the initial question, I think that the above thinking played into the furor -- when a university employee's compensation is so strikingly higher than that of any other employees, even if it's strictly tied to performance, it seems mercenary in a sector where other stakeholders might reasonably expect a sense of mission/purpose to replace some monetary compensation.

Going in reverse, even though I think that schools with enormous endowments need to spend more of that money for the benefit of society, most universities aren’t Harvard or Stanford, and they do genuinely need cash for operations. And even at the richer schools, there’s always something more that can be done to advance the mission of the university; no university president has ever said “that’s it, we’ve achieved perfection.” New professorships, new dorms, new research facilities, etc. all cost money.As to why universities ask for money from young alumni, the primary reason is to form a lifelong relationship with the university and establish the habit of giving. Your alma mater wants you to remember that you are part of a community, something greater than yourself; if that relationship is severed at graduation, the odds are low that it’s going to be rebuilt over time. Alumni events and magazines (many of which are thinly-veiled requests for money) help keep people connected after they’ve left campus, as does contributing with charitable donations. And moreover, if you start donating to your alma mater when you’re young, odds are that it will become a permanent part of your life, and as you grow older, your contributions will increase. In other words, your alma mater likely doesn’t need your $50 when you’re 24, but it does need for some of your fellow graduates to become the kind of people who give $10,000/yr, and a handful to be the kind of people who will one day leave enormous sums to the university. All things being equal, it’s easier for fundraisers to talk someone who currently gives $5,000/yr into donating $10,000 than it is to find a new $10,000 donor, etc. So the goal of fundraising is to start people young, keep them engaged in the alumni community, and hope that down the road, some of those relationships pay off enormously.