There is Enough, There Always Has Been: The Endowment and Us
Nov 28, 2021

Sheen Kim

Image Credit: Robert Gill

A deeper look into the endowment, what makes it, how to make it different.

Dartmouth College warned its community members that it would suffer greatly during the pandemic.

  1. Dartmouth College projected $91 million lost in revenue.

  2. It used this prediction to justify intensifying exploitation of workers, massive budget cuts, lack of affordable housing, and its general disregard for the most imperiled in its radius: what the college called “rebudgeting.”

  3. Dartmouth College’s endowment then increased by $2.5 billion.


The endowment of a given university is “an aggregation of assets invested by a college or university to support its educational mission in perpetuity.” It is a pot of funds, some gifted via massive fundraising campaigns, and the remainder made from investments into the most profitable, exploitative ventures in the world. For reference, FY20’s endowment asset classes consisted of 20-35% global equities; 20-30% hedge funds and venture capital/private equity; 5-15% natural resources; 3-12.5% fixed income; and 0-10% real estate. The college presents the endowment as its protective ward—the logic being that endowment frugality is what allows the school to survive. By drawing on the barest minimum from the big pot that is the endowment to actually use, the “school” in its most alienated, financialized form can survive “in perpetuity.”


Dartmouth and its peer Ivies are the masters of this “survival”, and all have endowments that range in the billions. Universities’ public relations departments somewhat deceptively translate this endowment into material gains for its audience: the bigger the endowment, the more financial aid the university can offer, more BIPOC faculty hired, more investment in life-saving technology, and so on and so forth.


To be clear, this is not completely false. More absolute money does translate into more “gains.” But the money that actually goes to the functioning of the school, or the livelihoods and labor of its employees and students, is a mite compared to the gains of investors, trustees, and high-ranking university officials alongside financial keepers—and comes to function as placation. The former two, specifically, do not gain in pay raises, nor do they directly receive money from the endowment, but instead gain from Dartmouth’s myriad investments.


The “functioning” money at Dartmouth College, called the “operating budget,” is decided at the annual spring meeting of the Dartmouth Board of Trustees, a group consisting of the President of the College, the Governor of New Hampshire, and 24 other trusteeships, some of whom represent a variety of massive businesses or investment companies. At this meeting, the Trustees vote on an operating budget for the entire year, set tuition costs, and decide other such numbers that we as students will be beholden to. For the 2022 fiscal year, the Trustees voted on a $1.2 billion sum. For comparison, FY2021’s budget was $1.13 billion, while FY2020’s was $1.089 billion.


The operating budget is a seemingly-innocuous sum that becomes the sole figure against which the schools’ annual expenses and profits are compared to. When reports say the college “broke even,” it means that it recouped the $1.2 billion (or similar) sum. When the college reports it spends over half of its money on employment costs (~500-600 million) and the rest on academic and facility costs (~400-500 million), it means it spends the bulk of the operating budget, and not the totality of money that the college has control of. When the college claims it must tighten its pursestrings, complains of massive losses, or laments that it has to tap into its restricted gifts, they do so with the relatively smaller $1 billion sum in mind. This leaves us with the question: what of the remaining billions?


The budget, further, is not fully funded by the endowment, and is often anything but. At Dartmouth, the endowment usually only accounts for ~20-25% of the OB. This year, at the same meeting, trustees voted to “draw on” $335 million, or 5%, of the FY21 endowment. Other sources of funding for items subsumed under the operating budget, such as financial aid, comes from sources such as the Dartmouth College Fund or the $3 billion “Call to Lead” campaign. It has been a trend over the last decade for Dartmouth to withdraw only around 5% from its endowment for a given financial year; the last two fiscal years (FY21 and 20), drew $289 and $271 million respectively from the endowment, both about 5% of the endowment at that time. This leaves us with the question: what of the remaining billions? It is a question that is rendered unanswerable in the language that the institution offers to us.


Dartmouth College profited at an incredible scale during the pandemic. It received a 46.5% endowment return for FY21, an increase from $6 billion to $8.6 billion—a massive increase when the average has been 12.8% in the past ten years, and a slap in the face to the great many who had their livelihoods affected by pandemic austerity. (For scale, the endowment as it is now breaks down to approximately $1.35 million per student.)


As students and community members that have seen the worst cruelties of the pandemic while watching wealth funnel into the coffers of those at the top, we continue to hover around this figure akin to fruit flies on ripe fruit. Multiple opinion articles on The Dartmouth’s page consist of critique of the school’s finances or the policies that these finances would have made room for. Student Assembly members themselves, among others, have pointed out how even a small increase in drawing on the endowment—from 5% to 5.5%—would have spared millions that could have led to dorm improvements, mental health resources, greater pay, and more. The Dartmouth YDSA’s statement on the endowment gains puts it best: “WE WERE RIGHT, THE DARTMOUTH COMMUNITY SUFFERED FOR NOTHING.”


The increase, after a year of what has been mass death and exploitation both near and far, is a grand indictment of not only Dartmouth College, but those worldwide to whom the wealth of the masses flows continually upward. As workers around the world lost $3.7 trillion, the world’s biggest billionaires alone gained $3.9 billion: theft at a beautiful and massive scale.


Well-documented are the struggles that Dartmouth community members, ranging from the undocumented workers who maintain Upper Valley farms to tenured professors, have faced and will continue to face. Even better documented are the solutions that they offer to problems, regardless of endless calls by a bourgeois administration for feedback, feedback, feedback. Dartmouth pits those that depend on it into this endless loop of “feedback,” praying for the quick graduation of restless students so they can return to an exploitative norm.


Dartmouth College, to its credit, has been consistent in its messaging about the endowment: they will not draw more upon it. It is not meant to be drawn on, and it will never be meant to be drawn on: “The money is restricted in its use by donors”; the endowment is meant to be preserved for “future generations”; that refusing to preserve the endowment would lead to “fewer students[...] fewer jobs[...] less financial aid[...] fewer faculty.” The College is patronizing in how it treats those condemning it for letting crises happen time and time again: how dare we think that the endowment is some “regular bank account”? How could we not know that the endowment is more than 6,000 funds, many of which “used in accordance with the wishes of donors”?


Say that is so, and pretend for a brief moment that hoarding massive amounts of wealth in hedge funds is acceptable. In its current state, the endowment is 80% restricted—leaving 20%, or $1.7 billion unrestricted. Ignoring the endowment completely, Dartmouth has openly mentioned that its liquid operating reserves as of December 2020 exceed $400 million, including a $50 million “revenue stabilization reserve” from unspent revenue from non-endowment investments. Of less note, the school has money elsewhere, such as an annual renewal fund (currently at $39 million), and an endowed infrastructure renewal fund ($130 million) created in March 2021. The specific numbers matter much less than the fact that even at the barest levels, the money is there, and shares that same upward-flowing characteristic as has the global flow of wealth. The school’s finances are hoarded, scattered into dispersed topics. The school already has money, and has mastered methods to create more money when it finds it necessary. What it does not find necessary is the mass precarity of its students, and the Upper Valley community that maintains it.


It is difficult to sum up what a failure the school’s response has been to all that has happened in the pandemic, and how frantically it often scrambles to fix issues that are rotten from the core out. The school, rather than listening to student calls for fundamental policy chances such as leniency and removal of a forced medical leave policy after the death of three undergraduates, instead partnered with a mental health nonprofit and gave students a “chance to be heard.” Some of the newest dorms were allowed to get to the point of developing mold, which was only acted upon after discovery by a proactive student. Dartmouth tuition has continued to increase, with trustees agreeing on a $78,010 sum, up 2% from last year, for some examples.


We speak of scales: the sheer amount of money universities have made during the pandemic as exemplified by endowment gain, and in doing so, how they have left students, community members, and workers worldwide in peril.


Student DDS workers who faced wage cuts, unstable hours, and awful working conditions during the pandemic have now received a small pay increase, raising their wages to ~$12-13 an hour—one that still pales in comparison to local jobs (such as $16 at Boloco and $17 at Five Guys), and is not enough in a college town with ever-increasing rent. 37% of the Class of 2020 took out student loans, leaving each student with loans on average $23,580 in debt. Undergraduate students, during the pandemic, had to rely on a fund that ran out in April of 2020, and then had to shift to entirely student-run funds: namely, the Dartmouth Student Union’s mutual aid fund.


We do not only talk of undergraduates, but also graduate workers: those who, at Dartmouth, have the lowest average stipends in the Ivy League, ranging at a middling ~$30,000, of which half often goes to rent; no form of vision care; an extremely expensive healthcare insurance; and lack of accessibility and flexible transportation. We talk of professors and other employees at the school who continue to have their resources cut: entire departments told to cut 1.5% of their budgets, adversely affecting less-funded departments and department pays. Those in need of childcare face waitlists as long as 12-18 months, with a single subsidized child care center (Dartmouth College Child Care Center) on campus, costing ~$56,000 for an infant and preschooler on average and leaving those unable to pick up their children at odd hours. We speak of everyone in the Upper Valley, as money thrown out in housing stipends by the school causes rents to rise to extravagant rates; as the houselessness epidemic expands; as the costs of living rise and people are forced to work multiple jobs to survive. We speak of the undocumented farm workers that carry the entire agricultural economy in the Upper Valley; the subcontracted, exploited labor that Dartmouth uses.


Dartmouth College is nothing without its students, its faculty, its workers, and those in the community that keep it afloat. Consider Dartmouth’s embarrassing drop down to an R2 school back in 2016 that led to the scramble to create the Society of Fellows (a project postdoctoral cohort, stipended slightly better than the normal graduates), a drop which would have likely seen some withdrawal by investors. A bottomless pit of labor allows the school to underpay its workers, and to give it just enough leverage to claim that it gives enough, even as costs continue to rise through its own actions. And all the while, it can manufacture wealth for those that have far too much of it already.


This is not a call for Dartmouth to “do better.” It has “done better” through certain changes, such as financial aid coverage shifts, raising of minimum wages, increased hiring, and so on (all, however, “unrelated to its returns”). This is a note that the college has enough—it always has—and that more will not come willingly. Students, tenants, and workers have been organizing all over the nation and world to win what they are rightfully due, and reveal a better future at hand. People are increasingly rejecting paltry solutions and gifts such as public claims of divestment (of which Dartmouth still leaves vague whether it continues to occur through college-subsidized student investment clubs) and meagre pay increases. Anger is growing, and demands are swift, precise, and ignored—but we continue to approach a situation where they can no longer be the latter.


This general scene can be best exemplified by the Kellogg strikes of October and November 2021: union members have reported that Kellogg spends $10 million a day to keep strikers out, with $390 million spent after 39 days of striking. The negotiation was only for $60 million; they are not opposed to spending money, they are opposed to the very idea of the masses having power.


In an interview with the Dartmouth Alumni Magazine from 2015, then-Dartmouth College Executive Vice President and Chief Financial Officer said: “The new environment is to think more substitutionally than additively.” This mentalité has, for the most part, continued intact. But the environment has been nothing but additive for those at the peak, and we refuse to substitute bleak future for bleak future.


It is time to come to the conclusion that the massive hoarding of wealth as people die, face housing insecurity, work endless and multiple jobs to simply survive is unethical; that this hoarded wealth actually comes from the people; that the college endowment is a grotesque amalgamation of such wealth; and that, then, the endowment is a representation of the forces that which we must organize against.