Endowment spending
Ryan DukemanSeveral reports in the past year have rightfully pointed out that Princeton (along with Stanford, Yale and Harvard) earns enough in investment returns on its endowment each year to more than cover annual operating expenses (with significant amounts of money left over to spend on capital projects or put back into the endowment) and that the University could therefore make tuition 100 percent free for everyone and still make a massive profit. By the numbers, Princeton’s annual rate of return on endowment investment has been between 15 and 20 percent for the past few years, and has averaged, 10.5 percent per year over the last 10 years (a period that includes the worst financial crisis in modern times). Last year, the 19.6 percent return equated to $2.8 billion, and in future years a similar rate would yield an even higher absolute number.