by Kevin Weinman
September 17, 2015
AAmherst College’s $2.1 billion endowment is immensely important to our community. Currently, more than half of Amherst’s annual operating budget is funded from the endowment, one of the very highest rates of any college or university in the world. The endowment provides $30 million more to the College’s budget than tuition, room, board, and fee revenues combined. In the 2015-16 school year, the College will spend about $50,000 per student from its endowment to fund financial aid, faculty compensation, faculty and student research, student activities, staff and support activities, and facilities.
Recently, several commentators in prominent media have questioned how colleges invest and spend their endowments, and others have called for changes to the tax-exempt status of colleges and universities with large endowments.
We reached out to Kevin Weinman, Amherst College’s chief financial officer, to understand more about how Amherst uses its endowment.
QUESTION: What is the endowment?
Amherst’s endowment is a corpus of financial resources intended to serve the institution in perpetuity. The College’s endowment originated with gifts from generous alumni and friends. Since then, the endowment has grown through continued generosity from donors and gains from the prudent investment of endowment funds. As a result, Amherst’s endowment now totals $2.15 billion, or $1.2 million per student, making it one of the 10 largest endowments per student of any college or university.
QUESTION: How is the endowment invested?
The endowment is managed to generate significant investment returns and at the same time to protect the College from the effects of economic downturns. The end result is a diversified range of investments that include a mix of public and private equities, bonds and cash.