Is an institution's "endowment" the total amount of money they currently have today or is it the total amount they receive every year?
For example, Harvard has an "endowment" of 50 billion dollars. Is this 50 billion dollars the total amount of money they have accumulated so far since they opened in year 1636? Or is the 50 billion dollars the total amount they will receive every year through things like fixed yearly donations from rich connections? (So year 2024, they get donated another 50 billion dollars/ year 2025 another 50 billion dollars and so on.)
Also, how do institutions calculate endowment? Is it only the amount of free cash they have idle in an bank account? Or do they add the value of assets like real estate/building values to their "endowment" number?
Finally, since an institution like Harvard is operated like a business, is the bottom line, the Revenue-Expenses, is the "Net Profit" number added to Harvard's endowment? Or is Harvard's business and "endowment" 2 completely different entities?
From what I understand, $50B is the total AUM.
An endowment is all investable assets accumulated over time, not the amount they receive every year. The amount of profit the endowment's investments make over a year are either used to fund projects/salaries/taxes for an institution or are put back in the endowment to be re-invested next year.
AUM. Harvard is an LP to many funds you see mentioned on the PE forum
Are you a fkin idiot to ask if Harvard gets $50b a year? You know how much money that is.
Use some common sense before asking these questions. Sad to see how the talent in finance dropped so heavily with these kinds of people getting in
Ouch
Haha yeah it’s not $50B per year. Pretty sure it’s $50B per day. With over $18 trillion dollars per year, Harvard has the 2nd highest GDP in the world, ahead of China.
I mean yeah, $50B a year would barely be the GDP of Estonia.
Quidem autem tenetur repudiandae impedit culpa. Pariatur magni quam molestias et accusamus. Neque recusandae nulla in tempore ad odio in. Autem aut debitis quia nostrum voluptatibus quas dolore.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...