U. endowment dismal in context
The Daily Targum published an article last month, "U. endowment climbs despite economic woes," in which the author celebrated the fact that amidst the financial crisis the University's endowment suffered little relative to other colleges. Never mind that the article's title disingenuously suggested that our endowment actually increased — in reality, it only decreased less than others — but more problematic was that the underlying explanation of why the endowment suffered relatively less was never provided. That is, while the managers of our school's endowment fund deserve credit for only losing 15 percent as compared to the 20 to 30 percent lost at other institutions, the truth is that with less money to work with, our school was likely forced to make conservative investments. In other words, we did not have the luxury to risk losing anything, and more importantly, we were likely barred from entering into more lucrative but riskier investments that require higher amounts of principle.
While the article made reference to our endowment's total size — 508 million dollars — it never properly placed this number in any sort of meaningful perspective. Consider the following: Our University's funds ranks 105 in the country. This places it in the neighborhood of Berry College, Oberlin College and several other tiny liberal arts schools that enroll fewer students than can fit in Scott Hall on the College Avenue campus and may (or may not) be locatable on Google maps. To be fair, we also have an endowment analogous to some other large state universities, such as the Louisiana State University system, which enrolls more than 83,000 students across four public universities, none of which anyone would voluntarily attend.
Moreover, it is not that we only have a dismal endowment in comparison to the Ivy League — Harvard University's is an astonishing 50 times greater — which obviously benefits from having wealthy donors pay to ensure that their son or daughter get admitted on "legacy." Unfortunately, we also fail to compete with other similarly reputable state universities, such as Pennsylvania and Michigan State, both of which double our fund at 1.2 and 1.1 billion dollars respectively.
Pragmatically speaking, having a small endowment means having less money to spend on research grants, scholarships and other awards that make the University a more attractive place for top students and professors. But even if we were able to raise our endowment to a more respectful level, something akin to Pennsylvania State's, it would still only pay for roughly two percent of total expenditures. So why is this relevant?
The issue is actually much larger than budgetary concerns. As one of the oldest universities in the country, it is curious that we have not accrued a larger endowment. It is important to highlight this because in many ways an endowment tells a story about a university's graduates — it is an indicator of both their prosperity and their attitude towards their alma mater. More precisely, since an endowment is predominantly comprised of donations given by graduates of the institution, there are only two reasons why the University would fail to garner more money: Our alumni earn relatively less than those of other similarly reputable schools, or our alumni do not feel inclined to give back.
The first possibility is easily disproved. According to a 2009 report, by mid-career the average University alumnus is earning $93,000 as compared to the average Columbia alumnus earning $100,000 by the same point in time. This is especially impressive when you consider how much less our University alumnus invested in their education. Moreover, the average mid-career University alumnus earns nearly $9,000 more than their Pennsylvania State counterpart, who takes home $84,600. The disparity between endowments then is simply not explained by a similar disparity between income levels among graduates.
Of course, this leaves us with the grim conclusion that our University alumni opt to donate far less frequently than other university graduates with similar income levels. Unfortunately, as much as I would love to blame this on the abrasive nature of the Rutgers Telefund workers, I doubt this can explain away much of the disparity.
Sadly, something about our dismal endowment seems to make perfect sense when you consider the attitudes of many University students. Empirically speaking, it seems that all too often students at this University describe their success not "because of Rutgers," but rather "in spite of Rutgers." Many times the underlying sentiment appears to be "yes, despite that 200-pound ball and chain around my ankle that is Rutgers University, I made a name for myself in [insert field of study here]." The RU Screw pervades us, makes us cynics while we are here and likely makes us reluctant to give back later on.
Why is this worth pointing out? Because if there was ever a tangible indicator one could point to when making an argument as to why this University should stop accepting so many students, it is the endowment. This is not a new argument. As the number of students continues to increase, the quality of student life invariably goes down. Each time students get pushed off buses and are late for class, cannot find available tables at the library, cannot register for a class they are actually excited to take, or fail to secure a place to live within a reasonable distance from the school, there is another reason to be dissatisfied with their college experience. In other words, there is another reason to believe they somehow triumphed over — not with the help — of the University.
Simply put, if we accept less students we only lose the least competitive applicants. We get stronger enrolling classes with more available resources, placing students in a position to be even more likely to succeed. In turn, everyone at the University has a better experience, the way in which students view the school changes, and world hunger is ultimately solved (maybe the last bit is a stretch). At the least, when Telefund calls us 20 years from now we are far less inclined to say: "No thank you, I would much rather give to [insert graduate school here]."
If nothing else, the take away is this: Next time you hear "Rutgers ranks 105" in some given category, rather than assume this is somehow a positive sign, take a moment to ask what this actually says about our University and how it reflects what actually takes place here on campus. I assure you, it is better than simply debating about the tea party.
Eric Knecht is a Rutgers College senior majoring in economics and history.