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March 2009

19.1% Acceptance Rate for Class of 2013

The Daily Sun is on the horn, releasing the admissions data for the University on the first day it became available:

With the selection process now complete for the Class of 2013, the University has announced an admit rate of 19.1 percent for early and regular decision. This represents a 1.3 percent decrease since last year, bringing the admit rate below 20 percent for the first time in the history of Cornell.

The University received 34,381 applications, the largest amount ever, and a 4 percent increase over last year. The admissions office received 33,073 applicants for the Class of 2012, 30,382 for the Class of 2011 and 28,097 for the Class of 2010.

For this admissions cycle, 3,311 students were waitlisted, while 22,434 were outright denied admission.

Couple of quick thoughts:

-- Per our annual tradition, we estimated an acceptance rate of 18.6 percent earlier this year. So only off by half a percentage point isn't too shabby. Of course, I would contend that I we would have been closer to the mark had the University decided to not increase the entering class size by 100 students.

-- The total application count increased somewhat to 34,381 from the 34,200 previously reported. I suspect some of that increase may be attributed to recruited athletes and 'development' VIP admits.

-- The regular decision acceptance rate stands at 17.2 percent versus the 37 percent acceptance rate for early decision candidates.

-- Just as occurred last year, there is a gap between the total number of applications, on one hand, and the total number of accepted, waitlisted, and rejected students on the other. If the same lesson from last year holds, we can assume that 2,069 students applied to Cornell but did not select a college to which to be considered for admission.

-- The implied regular decision yield for the Class of 2013 is 36 percent, for an overall expected yield of 48 percent. Frankly, the 36 percent yield figure strikes me as a bit optimistic, even if it reflects the yield enjoyed last year. Why? First, because I don't think that schools like Harvard and Princeton will want to depend as heavily on the waitlist as they did last year, meaning that there will be more cross-admit battles that Cornell will have to deal with. Secondly, because I think the current economic climate will leave a lot of families thinking long and hard about the benefits of a Cornell education vis-a-vis their in-state flagship.

-- I wonder if the University is secretly hoping to over-enroll again this year, as well. Last summer, Cornell over-enrolled by 130 students, with an entering class size of 3.180 relative to a target of 3,050. This year, with a target of 3,150 students, it would be awfully convenient for the University's budget to enroll 3,250 students.

-- As we all know, acceptance rates tell you nothing about the strength of the student body, nor the quality of the undergraduate experience.

Matthew Nagowski | March 31, 2009 (#)

Cornell's Debt -- Cheaper Than Harvard's!

The Sun is running a decent article on the University's taxable bond issue last week.

We learn that Cornell was able to raise $250 MM in five year notes at 4.35% and $250 MM in ten year notes at 5.45%. We also learn that the University is set to raise another $305 MM in non-taxable debt through the State Dormitory Authority this week, in a long-planned offering designed to provide further working capital for the University's ongoing construction projects.

The good news is that when compared to Harvard's bond issue in late December, Cornell will enjoy a lower interest rate 'spread' relative to Ten Year Treasuries. In fact, the premium that Cornell ends up paying for its debt -- 270 basis points -- is much more in line with Princeton's (at 264 basis points) than Harvard's (with a 345 basis point spread over Treasuries). Keep in mind that while both Princeton and Harvard are rated Aaa by Moody's (the highest grade possible), Cornell is one notch below at Aa1.

Bond Issue

Of course, even though Cornell may be enjoying cheaper rates than Harvard, this doesn't mean that Cornell is seen as less of a credit risk than our counterparts in Cambridge. For one, Harvard raised their debt in December, when credit markets were decidedly a bit more jittery. And two, Cornell only raised one-third as much debt as Harvard did. As I suggested a couple of weeks ago, all things equal, Cornell will enjoy lower rates due to the smaller size of its debt issue. This fact is reflected in Vanderbilt's issue of $250 MM (only 50 percent of that of Cornell) last month -- where slightly better rates were enjoyed despite Vanderbilt's marginally worse Aa2 rating.

Still, one can't help but marvel at the amount of indebtedness the University has taken upon itself in the past month -- its debt load will basically double overnight, from $800 MM to over $1600 MM. And an important measure of fiscal health -- the ratio of expandable resources to debt (e.g. 'coverage') will be halved. This comes after more than 12 years of stable debt and asset levels, and is why Standard & Poor's downgraded the University's credit rating.

Cornell's Debt

For more information on the history of Cornell's debt financing, I would recommend perusing the latest financial report of the University.

While the irony of the University needing to raise more debt in a time when debt has been broadly chastised as a source of the world's economic woes is not lost on us, I do feel that these actions reflect the necessary financial stewardship by Day Hall.

After all, institutions of higher education can afford to take a long-term view of their finances, and the time is ripe to continue to make investments in basic research and education. The opportunity cost of not continuing to invest in an institution as successful as Cornell is greater than ever.

Matthew Nagowski | March 31, 2009 (#)

Evan Barlow is My Hero!

Now. How does one pronounce Bemidji?

Matthew Nagowski | March 29, 2009 (#)

Skorton Recommits Cornell to Land Grant Mission

With the University's budget (and priorities) in a state of flux due to the ongoing fiscal tsunami, it is reassuring to hear President Skorton make continued commitments to Cornell's historic relationship with the State of New York and its role as a land grant institution.

In his open forum with staff regarding ongoing budget challenges, Skorton really hits this point home:

When asked how the economy is affecting the university's relationship with the State University of New York (SUNY) system, Skorton said that state cuts, Cornell's fiscal adjustments and SUNY's budget issues make for a difficult situation, but "regardless of funding I will not walk away from our relationship with the state, because we're not the state's land-grant university only if we receive $170 million. We're the land-grant university -- period."

And the same sentiment is reiterated in a press release touting Cornell as an economic engine for the State:

"As one of the state's leading entrepreneurial universities with a $2.8 billion budget, Cornell is a critical resource in this period of economic upheaval to help the state to financial recovery," Cornell President David J. Skorton said. "Even while we're making fiscal adjustments to deal with the current economic situation, Cornell is the economic engine that supports our community as we continue to be a leading economic engine for the state.

But I think the most interesting quote is found in a recent interview with the Alumni Magazine, where Skorton positions Cornell as uniquely able to lead the state, country, and the world out of the depths of the current crisis:

Skorton also believes that the current crisis offers an opportunity for Cornell to play an important role in the economic recovery—and beyond. "We have the assets to be extraordinarily helpful as the community, the state, and the country dig out from their problems," he says. "Isn't this one of the places where we ought to be tackling the thorniest problems? What other entities in society have this breadth of expertise and inquiry? This is our time to be part of the answer to problems that don't just go away."

Skorton has started to provide the visionary language needed to lead and inspire, but it remains to be seen just what type of strategic changes are in store that will serve to "reconfigure" the University to face our collective challenges.

Matthew Nagowski | March 19, 2009 (#)

Why Cornell Might Win the Dance

With the news that the Big Red Basketball team is going dancing in Boise (of all places, Boise!), PayScale -- the salary comparison website -- is running a promotional gimmick that squares off all 65 teams in the Tournament based on the average pay of their alums five to fifteen years in their careers.

You can read the full methodology here, but the good news is that Cornell does a lot better than it did last year when we lost to Stanford in the first round; we lose to Duke in the finals:

The thing to remember is that this doesn't attempt to control for the relative differences in the alumni bodies at the different schools. Something tells me that a lot of agriculture and architecture majors -- two programs that Duke doesn't have -- are bringing the Cornell average down. After we control for the fact that Duke isn't interested in the safety and sustainability of our various food sources, Cornell might very well edge outs its Tobacco Road competition.

And if we can't beat Duke in the rat race, at least we can beat them on the lacrosse field -- Cornell lacrosse is set to square off against Duke this afternoon.

Matthew Nagowski | March 17, 2009 (#)

Wrestling Goes Big Time

Back in January I wrote about how Cornell was quickly transforming itself into a big-time sports school, and the winter season has certainly lived up to its promise. Men's Basketball recaptured the Ivy Crown last weekend, while Men's Hockey continues to be competitive in its quest for another ECAC title and an NCAA bid, hosting RPI this weekend in the ECAC quarterfinals. Gymnastics recently secured its second straight Ivy title, and the men's and women's tracks teams won the indoor Heps thanks to the assistance of future Olympic gold medalist, Jeomi Maduka '09.

But perhaps the greatest excitement is for wrestling, where the team has a legitimate shot of winning a national championship this year. And while there is no intended disrespect to the nationally relevant Polo or the Crew teams, Cornell has not won a team championship in an NCAA sanctioned sport since the 1977 lacrosse team.

So that's why the Wall Street Journal, better known for its coverage of arcane financial and business matters than its sports beat, has picked up on Cornell's unlikely rise to become a national wrestling powerhouse:

Cornell's rise to the top wrestling ranks is part "Field of Dreams," part fund raising, and part the story of two unlikely champions. Head Coach Rob Koll, an NCAA champion and the son of a three-time NCAA champion, is wrestling royalty, but he has charted his own path.

Though his dad had been the coach at Penn State, Mr. Koll opted to attend the University of North Carolina, a school never known for wrestling. After a career capped by an undefeated season and a stint as a graduate assistant, he was hired by Cornell as an assistant coach. Four years later, in 1993, Mr. Koll, who looks and sounds much like Coach Taylor on NBC's "Friday Night Lights," gained the head job at age 28.

Soon after, wrestling alumni hatched plans for a new facility on campus. The idea of a building devoted to a single nonrevenue-generating sport -- even one fully funded by alums -- was "not a slam dunk," says Andy Noel, Cornell's athletic director and a former wrestling coach himself. But Cornell's president at the time was Hunter Rawlings, who had been president at Iowa. He backed the plan.

The $6 million Friedman Wrestling Center, named for Stephen Friedman, a former wrestler who went on to become chairman of Goldman Sachs, opened in 2002. The building -- the only stand-alone wrestling facility in the country -- was the biggest step in raising the program to national prominence. "If you build it, they will come," Mr. Koll says. That same year, Travis Lee won his first of four EIWA titles for the Big Red.

Matthew Nagowski | March 12, 2009 (#)

My Case In Point

Regarding whether or not we are wrapping ourselves in Ivy, I submit to you the press release concerning the new eCornell logo:

The new mark supports a bold Ivy League presence and furthers the pursuit of delivering world-class learning experiences in the online environment - extending the global reach of Cornell University. (Emphasis added.)

I was previously unaware that the for-profit, completely virtual, wholly-owned subsidiary of Cornell University fielded varsity athletics teams.

(Note: I previously criticized eCornell three years ago.)

Matthew Nagowski | March 11, 2009 (#)

Private-School Prominence, Public-School Pedigree

Well, it’s Monday. And unfortunately the fallout from Ann Coulter’s blatantly untruthful, anti-CALS quips against Keith Olbermann (and his own, sophomoric rejoinder to her tirade) continued over the weekend.

IvyGate has a couple of threads dedicated to the nuances of the pecking order of the Ancient Eight, HuffPo has close to 600 comments on the topic, and the conservative echo-chamber (which is too vile and scary to even warrant a link) is gleefully painting Olbermann to be a fraud despite all outstanding evidence to the contrary. Meanwhile, even the editors of the Cornell Review have opened a schism among their ranks; one called Coulter’s remarks “inexcusable” while another lauded them as “funny and made in jest.”

On one level, it’s a wholly embarrassing squabble between two talking heads that shouldn’t merit a second glance from dignified parties.

But on another level, I think it exposes something deeply revealing about the nature of Cornell – the inherent tension that exists between the school’s private-school prominence and its more public-school pedigree, or as Isaac Kramnick has so aptly labeled Cornell, “this Ivy League school with its Big Ten soul.”

As longtime readers will know, from the early days of this blog I have oft-derided invoking the Ivy League label when discussing anything other than our athletics associations, and I cringe every time a student columnist or a Cornell press kit invokes the label in some sort of prestige-seeking way. (Thankfully though, we’re not the worst in this habit...) I have even gone as far to suggest that Cornell may be better served in another sports conference.

The truth is that there is something inherently pathetic and bourgeoisie about championing by association. For instance, the website for the AEM program loudly proclaims that its students are ‘Ivy League Smart’, but I’m not quite sure what that means. And if you don’t believe me, look no further than Andy Bernard on The Office.

I suppose one could say that this all just part of Ezra's University -- parts of Cornell are known to be deeply, stridently bourgeoisie -- the upstart in the club who is known to not exactly follow all of the established social conventions: that you shouldn't be boastful, and even more importantly, you shouldn't call out your boastful associates in public for fear of bringing more ridicule to yourself. And Olbermann and Coulter play Andy Bernard's part perfectly. It's funny because it's true.

But Coulter’s erroneous comments (which she genuinely seems to believe) likely struck a nerve among many contract college students and alums for the very reason that we have likely heard the same backwards argument before – just never from a fellow alum. I can still remember being rudely and nonsensically chastised by a high school friend’s mother for attending the ‘non-Ivy’ Cornell after turning down two more selective institutions for the ILR School. (And God only knows how the students who came from out of state to study natural resources or nutrition or labor economics must feel.)

The sad thing is that the Ivy League was likely the last thing on our minds when we made our decision to enroll. I know that in my mind it boiled down to educational opportunities, distance, location, and character of the student body.

Likewise, there is something sadly anti-democratic and un-American about deriding Cornell’s land-grant roots. In many ways, Cornell’s contract with the State of New York is its greatest asset, providing a plurality of interests, but a common sense of pragmatic purpose on our unique campus. The failure to recognize the importance of Cornell’s public mission – and its myriad contributions to global nutrition, third-world development, labor standards, human development, and the like – speaks to just how backwards we have become as a society.

The challenge is that Cornell can more than stand on its own merits, but a combination of external expectations and internal insecurities can so easily distract our attention. Especially at this point in history, perhaps we should start focusing on the things that matter.

Matthew Nagowski | March 09, 2009 (#)

Trustees To Issue Bonds; Time to 'Reconfigure' University

The Board of Trustees met in Ithaca this weekend, in meetings that were certainly filled with tension and gravitas. Stemming out of the meetings, the University announced the intention to raise further operating capital through the issuance of $500 MM in taxable bonds this spring.

The fact that the bonds are taxable to investors is important, as tax-free bonds tend to have a lot of federal regulations attached to them -- proceeds from taxable bond issues can be used in a much more flexible fashion. As reports the Cornell Chronicle:

"The raising of the $500 million in working capital is really a very intelligent thing to do in a time of financially constrained markets," said board chairman Peter Meinig '61, BME '62. "The fact that Cornell's credit is so good makes it attractive to us to sell those bonds."

This is the first time in recent memory that the university has issued taxable bonds, although it has regularly issued nontaxable bonds to fund construction projects, Meinig said. "Interest rates are relatively low. From an issuer's point of view, I'd say it's a good time to issue bonds."

It will be interesting to see the price associated with these bonds, and other bond issues by similar schools will serve as a good basis of comparison. Princeton floated $1 billion in bonds in January, with ten year notes yielding 4.95 percent, and Harvard floating $1.5 billion in December at 6 percent for its ten year notes. (It should be noted that yields are pegged to the spread above Treasuries, and rates generally fell between December and January, so Princeton can be seen as raising funds that were maybe 60 basis points (0.6 percent) cheaper (aka less risky) than Harvard.)

But both Harvard and Princeton are AAA rated; by contrast, Cornell is a slight notch below at AA1 -- but its debt is still defined as "high grade and high quality". Still, Cornell will likely enjoy lower rates due to the fact that it seeking less funds than Harvard and Princeton. For instance, Vanderbilt recently issued $250 MM in bonds and obtained a price of 5.25 percent -- more in line with Princeton's price than Harvard's -- despite being rated a notch below Cornell at AA2.

Additionally, the Trustees also announced a decision to lower the endowment's yearly dividend, a no-brainer in light of the steep (and ongoing) declines in the market. But I think the real news is yet to come, and is foreshadowed in Sorton's closing paragraph to the community:

But a new reality is at hand for higher education, as well as for the rest of our economy. We are at a defining moment in Cornell's history. It is time to reconfigure the university in ways that not only guard our excellence and breadth, preserve our accessibility, meet our responsibilities to the local community and the State of New York, but that also consolidate our academic and administrative functions in imaginative and cost-effective ways.

Much like the consolidation of Theoretical and Applied Mechanics into the SIbley School, what other departments and academic units can be "reconfigured" across the University? I suspect that future changes coming down the road will not only make financial sense, but will result in stronger educational and research offerings. But more on that later.

Matthew Nagowski | March 08, 2009 (#)

Going Dancing

Food for thought: Until this year, no team other than Princeton and Penn has represented the Ivy League at the NCAA tournament in successive years.

Well, Cornell changed the history books this year. And we did it with a 24 point pounding of the Quakers.

Congratulations to Steve Donahue, Ryan Wittmann, Louis Dale, Jeff Foote, and the rest of the Big Red.

Matthew Nagowski | March 07, 2009 (#)

Deep Thought

I wonder how generous Olbermann and Coulter have been in their giving to dear alma mater.

If they have been less than loyal alums, I suggest they jointly endow a professorship together in political communication. It could be half sponsored by the Communication department in CALS, half by the Government department in Arts.

Matthew Nagowski | March 06, 2009 (#)

The Olbermann Response

It's interesting to note that Keith still can't stop himself from tooting his own horn... claiming to have graduated when he was 20, and in seven semesters no less. That must mean he is smart!

I did like the use of the diploma as a prop, though. It really highlights the fact that there is really just one Cornell. He should have also called Coulter out on the erroneous SAT scores.

We also need to fact check Olbermann a bit. Keith may have paid one-tenth the total tuition dollars of Coulter due to the rampant inflation that existed in the late seventies and early eighties, but the cost differential between the contract and endowed colleges wasn't all that different from where it is today. Thanks to the University Library's wonderful archives of the Daily Sun, we know that endowed tuition was $4800, compared to in-state contract tuition of $2025. This in 1979, the year that Olbermann graduated.

This all being said, the whole spat is childless and incredibly immature for a bunch of grown adults. I'm glad that we're making productive use of our time to help solve the ridiculous number of problems facing us at this current moment in history.

P.S. We would be better off in the Big Ten. Some people need to learn how to stop wrapping themselves in Ivy.

Matthew Nagowski | March 06, 2009 (#)

Ann Coulter Is An Idiot

So we have Keith Olbermann '79, a rising star among the liberal chattering class. He was one of the first vocal critics of the ineptitude of the Bush administration, and oh, he likes to reference his alma mater a little bit less than a certain fictitious character on an NBC sitcom.

And then we have Ann Coulter '84, who could only be described as a tired and aging conservative has-been, desperately willing to write about anything to give herself a little bit of attention. And so she decides to make ridiculous and unfounded comments about the Ag school in the mother of all ad hominem attacks on Olbermann.

The bottom line, though, is that Olbermann's liberal grandstanding and slightly over-the-top references to his alma mater shouldn't serve as the basis of an attack of the Ag School. And if I was the Cornell Review, I would disown her on the principle of denigrating an absolutely stellar institution.

(But also on stupidity and raging lunacy, while we're at it.)

I would venture to say that the students at Goodling's law school at Regent University are far more impressive than those at the Cornell agriculture school -- the land-grant, non-Ivy League school Keith attended.

I wouldn't mention it, except that Olbermann savages anyone who didn't go to an impressive college. As it happens, he didn't go to an impressive college, either.

If you've ever watched any three nights of his show, you know that Olbermann went to Cornell. But he always forgets to mention that he went to the school that offers classes in milking and bovine management.

Indeed, Keith is constantly lying about his nonexistent "Ivy League" education, boasting to Playboy magazine, for example: "My Ivy League education taught me how to cut corners, skim books and take an idea and write 15 pages on it, and also how to work all day at the Cornell radio station and never actually go to class."

Except Keith didn't go to the Ivy League Cornell; he went to the Old MacDonald Cornell.

The real Cornell, the School of Arts and Sciences (average SAT: 1,325; acceptance rate: 1 in 6 applicants), is the only Ivy League school at Cornell and the only one that grants a Bachelor of Arts degree.

Keith went to an affiliated state college at Cornell, the College of Agriculture and Life Sciences (average SAT: about that of pulling guards at the University of South Carolina; acceptance rate: 1 of every 1.01 applicants).

Coluter's idiocy doesn't even deserve a response, but this state school alumnus will correct a couple of Coulter's Ivy-league errors for her, just for good measure. Last time I checked, all of Cornell's colleges preached the importance of fact-checking.

First, all of Cornell is considered a land-grant institution. Ezra Cornell was given land in Wisconsin as part of the Morrill Act. The proceeds of this land are now part of Cornell's private endowment.

Secondly, all seven undergraduate colleges of Cornell are a member of the Ivy League in that students can compete in the oft-hyped sports conference of the same name. All eight schools subject themselves to the same rules and regulations when it comes to admissions and academic qualifications, but the similarities end there. Cornell and Harvard are two very different institutions, just like Brown and Penn.

And since Coulter wasn't on a varsity athletics team at Cornell, I can't see why she is hyping her own connection to said athletics conference.

Finally, Coulter needs to have some of her numbers re-examined.

For instance, the Ag school has an average SAT score of 1360 and has an acceptance rate of 1 in 5 students. (Not that acceptance rates matter.) And Coulter even dumbs down her own college by close to 100 SAT points -- Arts and Sciences has an average SAT score of 1415, not 1325.

There are a lot more errors and lapses into idiocy in Coulter's article, but a stronger person than your truly will need the patience to comment. Perhaps Olbermann himself will even have the wherewithal to fashion a rejoinder in defense of our alma mater.

Matthew Nagowski | March 04, 2009 (#)

More on Endowment Risk

The Times Dealbook is running an intriguing article on the college endowment bubble, even if it doesn't make the connection to the larger tuition and student loan bubble that MetaEzra first made last spring.

It's a nice follow-up to yesterday's discussion on the relative value of endowment dollars, and suggests that college endowments may have taken on a bit more risk than they could afford to over the last decade. The basic point is that investments in illiquid private equity, real estate, and hedge fund interests will cause further degradation of an endowment's value as the liquid portions of the fund need to be sold to fund current revenue needs:

In the short term, unless it boosts its liquid returns, Harvard is going to have to raise a lot in donations or eat up its liquid assets to fund university obligations and its private equity commitments. This results in a spiraling decline in Harvard’s liquid assets as each year they go lower to meet these needs and more and more assets become tied up in private equity. This assumes the markets stay where they are in the next three years — there are scenarios where liquid assets do worse (like yesterday), or better, of course.

This is likely why Harvard recently sold $1.5 billion in debt, and unsuccessfully tried to sell $1.5 billion of its private equity portfolio. It needs to cover short-term funding obligations rather than liquidate illiquid assets at fire-sale prices. In essence, Harvard is more like a hedge fund than ever — trading for short-term gain with the same risks involved.

It's impossible to tell how much more dire Cornell's situation is than Harvard -- a similiar percentage of Cornell's endowment (33 percent) is thought to be locked up in real estate and private equity. On one side, Cornell depends a lot less heavily on investment revenue, but on the other side, Cornell has a lot less in liquid assets to burn through to support its operating budget.

It's no use speculating though, and at the end of the day, I think the basic philosophy of an endowment may need to be re-examined. Endowments have tried to 1) provide a steady stream of income to their institutions, 2) act as a reserve to depend upon when other revenue sources are in decline, and 3) serve as a source of future revenue growth.

But the last point seems antiethical to the first two given the amount of risk it can introduce to a university's operating basis, the results of which are currently coming home to roost. Because its associated spending on research, faculty, and financial-aid is often vital to the long-term health of an institution, endowment income should be a source of income stability and its principal should serve as a counter-cyclical hedge. It shouldn't be seen as a source of revenue growth for a university.

Some may see that as a problem -- why shouldn't an endowment enjoy the gains of the market? But don't forget, a university can effectively "outsource" its market risk in a risk-free fashion to its benefactors -- those alumni succesful in the market will naturally want to endow professorships, develop research programs, and build residence halls in their name. So much like a retiree's nest egg, I think stability can be a feature, not a bug.

Matthew Nagowski | March 03, 2009 (#)

Rethinking the Concept of Endowment

BusinessWeek is running a compelling article that questions the emphasis placed on university endowments. What good is endowing a gift, it asks, when you can get the same yearly benefit for only five percent the cost?

A particularly illuminating anecdote with Cornell and David Skorton is highlighted:

By force of circumstance, some richer schools may be coming around to the virtues of spending the money as it comes in instead of socking it away. They have always solicited donations for the "general fund," but this could become a higher priority. Cornell University President David Skorton, at a lunch meeting with reporters on Feb. 27, said that when he tried to hit up one generous graduate recently for $1 million to endow a scholarship, the alum said that all he could commit to was giving $50,000 per year for the next four years. That's equal to the income that $1 million would throw off at a 5% return. Not a bad alternative to an endowment gift, really, especially if it's renewed.

Of course, the benefit of an endowment is that it provides a store of wealth that can be drawn upon when times are dear to smooth out an institution's investments over time -- especially when the resources available for philanthropy are in decline. And it is precisely times like these when higher education should be making aggressive investments for the future.

But as we noted in January, it's not necessarily evident that more endowment is always a good thing. Measuring wealth as endowment relative to operating budget, Princeton is eight times wealthier than Cornell, but it's unclear to me that Princeton is any more productive at conducting research and educating students than Cornell.

The article also makes the good point that investments in endowment are prioritizing the education of future students over current students :

For example, it's often said that endowments help future generations of students, and that's true. But [as a Yale legal scholar] points out -- that by saving donations rather than spending them now, universities are giving advantages to future students at the expense of current ones.

If we assume that living standards continue to rise, that amounts to taking from the poor to give to the rich.

Matthew Nagowski | March 02, 2009 (#)

Other Recent Posts

-- WSJ: Cornell Wins NYC Tech Campus Bid (EBilmes)

-- Barrier Update: City Approves Nets (DJost)

-- Big Red Cymbal Guy (Nagowski)

-- New York Times Survey on Campus Recruiting is Flawed (KScott)

-- Barrier Update: Legal precedent suggests City of Ithaca will not be held liable for gorge suicide (DJost)

-- Despite MSG Loss, Big Potential for Big Red Hockey (EBilmes)

-- City Council Will Vote on Suicide Nets (DJost)

-- An Encounter on the Upper East Side (Nagowski)

-- Showing Off Your School Spirit (Nagowski)

-- Chipotle Ithaca? (KScott)

-- Cornell at the ING NYC Marathon (KScott)

-- Crossing Over a Fine Line: Commercial Activity on Campus (KScott)

-- Milstein's Downfall (Nagowski)

-- Can any Cornell-associated organization really be independent of the University? (Nagowski)

-- Slope Media Revisited (EBilmes)

-- Slope Media Group Approved for Byline Funding (KScott)

-- Occupy AEM? (KScott)

-- New campus pub to be good for both Greeks and non-Greeks (Nagowski)

-- Gagging the Election (Nagowski)

-- The Changing Structure of Rush Week (Nagowski)

-- Ivy League Humility in the Midwest (EBilmes)

-- Of Median Grades and Economics Minors (Nagowski)

-- Homecoming Recap (Nagowski)

-- My Cornell Bookshelf (Nagowski)

-- The Sun's Opinion Section Has Suddenly Gotten Good (Nagowski)

-- Remembering the 11th (Nagowski)

-- Cornellian Tapped as Top Economic Advisor (Nagowski)

-- Cutting Pledging, and the Good Which Comes With It (EBilmes)

-- Why Cornell Should Not Close Fall Creek Gorge (Nagowski)

-- Welcome to the Class of 2015 (Nagowski)