Although endowment size is a relative measure of a college's financial strength and stability, there are many other factors that influence the quality of a school. For example, public universities generally have lower endowments than private institutions, but public universities receive annual taxpayer appropriations that can make up for a lower annual endowment income. In general, over time, universities earn an average of 4% per year on their endowment investments. So, a $100 million endowment investment may subsidize annual operations by $4 million per year. | Although endowment size is a relative measure of a college's financial strength and stability, there are many other factors that influence the quality of a school. For example, public universities generally have lower endowments than private institutions, but public universities receive annual taxpayer appropriations that can make up for a lower annual endowment income. In general, over time, universities earn an average of 4% per year on their endowment investments. So, a $100 million endowment investment may subsidize annual operations by $4 million per year. |