Comment Re:Endowments (Score 2) 274
The reply that you replied to was trying to point out that the article doesn't even understand how endowments work.
Yes, they go towards salaries. The person who donated $10M said they were donating specifically for that purpose. The university cannot touch that money for any other reason. They money does not, usually, go towards new buildings. There is a specific division tasked with raising funds for capital projects. They also go towards scholarships - which does go directly towards tuition. The university has to either pay a fee or hire fund managers directly. They get a great return on investment, so their fund managers usually know what they're doing. Endowments are not a bank account. They are an investment put in place so that the funding of something occurs from the capital gains. A $1B endowment can maybe get $200M on a good year and that goes and pays a lot of professors (directly resulting in lower tuition costs) and scholarships (directly resulting in lower tuition costs). Some of the capital gains are put back into the fund to repair losses from other years. The ratio is way over 50% directly benefitting the students.