Posted August 23, 2024. Updated March 31, 2025.
TL;DR
- Columbia University’s $14.8 billion endowment, the fifth-largest in the Ivy League, is actually 6,450 separate funds managed as a single pool.
- It is designed to last indefinitely, with only the proceeds and appreciation being spent—typically 4.5% or less annually.
- About 68% of the endowment’s value is restricted for specific uses, like named scholarships or endowed chairs.
- The endowment is largely managed by external fund managers, leaving Columbia with little control or knowledge over specific investments.
What is an Endowment and How Is It Used?
An endowment is a portfolio of funds that supports the University’s activities into perpetuity. It’s not a “rainy day fund”; only a portion of the returns, not the principal, is meant to be spent each year (Columbia’s endowment spending rule prescribes 4.5% of total value). For the fiscal year ending June 30, 2024, Columbia’s draw from the endowment was $648.4 million, about 5.2%.
Benchmarking Endowments
As of June 30, 2024, Columbia’s endowment stood at $14.8 billion, making it the fifth-largest in the Ivy League, but the second-smallest per student. If we were to add Barnard and Teachers College to these figures, the ranking in absolute size would not change but we would be the smallest endowment in the Ivy League on a per-student basis by a considerable margin. For comparison, Princeton’s (the largest per-student) endowment draw covers 72% of its $2.4 billion budget, while Columbia’s covers 14% of its $4.7 billion non-hospital-system budget.
Endowment Investment Performance and Governance
Columbia’s endowment operates as a “fund of funds,” meaning external managers handle the investments. For example, this means that Columbia might hire BlackRock (among others) to manage the funds, which then invests in other funds that in turn invests in companies. For some of the broadest-based funds, this might include relatively small holdings in hundreds, if not thousands, of companies.
Over the past decade, the endowment has averaged an 7.4% annual return after accounting for the yearly draw. It is managed by the Columbia Investment Management Company, overseen by an independent board drawn from serving and former Trustees of Columbia University.
Where the Endowment Is Invested
As of June 30, 2024, Columbia’s endowment was allocated as follows:
- 31% global equities. Typically public equity funds, which are pools of different stocks managed by an external manager, where investors like Columbia have no say (and often no knowledge outside of quarterly reporting cycles) of which specific stocks are bought and sold. Columbia does occasionally invest in single stocks, such as Warren Buffett’s Berkshire Hathaway, but these are rare. For context, the total value of the single-stock holdings declared in its latest Form 13-F is approximately $47.4 million, of which 87% is Berkshire Hathaway, and which in total makes up 0.35% of the endowment.
- 26% private equity. Investment funds that transact in private companies, which are also typically multiyear “blind pools” where investors have no say in where and how the money is invested.
- 28% hedge funds. Typically investment funds that transact across a range of different types of investments, such as stocks and bonds, but also exotic financial instruments such as futures, derivatives, and swaps. Similarly, investors have no say (and often no knowledge outside of regular reporting cycles) of which specific instruments are bought and sold.
- 12% real assets. Typically real estate investments. This does not include Columbia’s campus buildings or apartment buildings housing its faculty, staff, and students. (Those add up to approximately another $6 billion).
- 2% fixed income. Typically bond funds, which are pools of many different bonds, where investors have no say (and often no knowledge outside of quarterly reporting cycles) in which specific bonds are bought and sold.
- 1% cash.
Endowment Restrictions and Uses
The endowment is split into 32% unrestricted and 68% restricted funds. The most recent draw funded:
- 24% student support. Typically financial aid.
- 31% faculty and research. Typically pays for salaries in endowed faculty chairs, but also research activities and even doctoral student support.
- 26% multipurpose/other. Not defined.
- 19% unrestricted. At administrator discretion.
About Restrictions
Columbia’s endowment, though managed as one pool, is composed of 6,450 distinct funds, each with its own purpose. We estimate that 40% or less of Columbia College’s financial aid comes from named endowed funds, and endowed professorial chairs often bear the name of the donor.
Restrictions can vary widely—from general purposes like “teaching the Core Curriculum” to highly specific ones. For example, the author of this explainer, while in business school, received a small endowed scholarship bequeathed by a donor who fled the Soviet Union and specified that the recipient “must not profess the doctrines of Communism.” Columbia deemed the business school an appropriate home for this scholarship.
Endowments are governed by the New York Prudent Management of Institutional Funds Act (NYPMIFA), which ensures donor intent is respected. Modifying restrictions without explicit donor consent is rare—and is provided for only when the original endowment or its intended purpose has become wasteful, impractical, unlawful, or similar—and usually involves a court process and the New York State attorney general.
Advisory Committee on Socially Responsible Investing (ACSRI)
Established in 2000, Columbia’s ACSRI provides non-binding recommendations on ethical investment policies. The membership is drawn from faculty, staff, administrators, alumni, and students (the latter nominated by the Student Affairs Committee of the University Senate).
In the past, they’ve influenced policies on thermal coal, tobacco, and private prisons. However, due to the external management of the endowment—where Columbia does not necessarily have decision rights or even visibility into what its external fund managers do—the actual impact of these policies is unclear.