After Penn, Yale University had the second fastest endowment growth at 209.4%, followed by Brown, Princeton, Columbia, Dartmouth, Harvard, and Cornell University. As of 2021, Harvard had the largest endowment at $53.2 billion. The universities’ endowments were ranked using data from the U.S. Department of Education.
University endowments consist of financial assets or funds that are donated to academic institutions. Endowment growth may be a result of investment returns, spending distributions, new gifts, and internal transfers, according to the Penn Office of Investments.
Endowment funds are used to support a range of University activities. Fifty-four percent of Penn’s endowment was used to support instruction, 24% for health care, 15% for student aid, and 7% for research, academic support, and other activities, according to the Office of Investments in June 2021.
Despite the COVID-19 pandemic, Penn’s endowment continued to grow from $200 million to $14.9 billion in 2020 and rose by a record 41.1% to $20.5 billion in June 2021. In 2021, Wharton received an anonymous $5 million donation in Bitcoin, the largest cryptocurrency donation in Penn history.
Much of Penn's endowment growth took place under the leadership of former Penn President Amy Gutmann, who served from 2004 to 2021 and quintupled the endowment during her tenure.
Her successor, Liz Magill, told The Daily Pennsylvanian in an interview upon her appointment that fundraising would be a top priority during her tenure, adding that "Philanthropy is about a human connection between two people who have a passion for an institution and a belief that it can change the world."
Between 1980 and 2016, the top 1% of university endowments grew from about $2 billion to $20 billion. Many elite universities invest in both private equity and hedge funds led by the universities’ alumni, according to The Washington Post.