ENDOWMENT

Do you know what an endowment is?  An endowment is a collection of gifts or donations.  Endowments are intended to last forever because only the interest is used for current expenses.  Organizations, like universities, amass these endowments.   The larger the endowment, the more the university has to spend.  It is their income over and above the tuition they collect. 

You would think that charitable donations to universities would not make a big dent in our overall economy.  Well, take a look at the following and see what is going on.  Harvard University right now has about $36 billion in endowments.  That's how much money they have that is invested and from which they draw interest and have available for expenses.  That's $36,000,000,000.00.  Yale University has about $28 billion;  Stanford University about $24 billion; Princeton University about $22 billion - that's $110 billion for these four schools.  MIT has about $14 billion; University of Pennsylvania about $11 billion; and Columbia University about $10 billion.    I hope you get the idea.  There are literally, hundreds of private universities in the U.S.  A penny here and a penny there and before you know it, it adds up to a tidy sum.

The new tax laws just enacted, now levy these endowments with a 1.4% excise tax on amounts over $500 thousand per full time student.   I think all of the above, and many more, fall into that category. 

For your edification, the local universities stack up like this:  Xavier University almost $170 million and under 7,000 students; Miami University almost $450 million and 24,000 students; University of Cincinnati almost $1.5 billion and 45,000 students.   
🏫