Penn’s endowment sees 12.2% annual investment return, grows to record $24.8 billion

Penn’s endowment increased by 12.2% for the 2025 fiscal year, growing from $22.3 billion to $24.8 billion.

The growth represents an improvement from the endowment’s performance over the past several years — including a rise from a return rate of 7.1% in 2024. The fund is comprised of over 8,900 individual endowments and provided about $1.12 billion in annual budgetary support for the University through scholarships, faculty positions, research, and health system operations during FY25.

Penn currently has the seventh-largest endowment in the United States, behind Harvard University, the University of Texas System, Yale University, Stanford University, Princeton University, and the Massachusetts Institute of Technology. While Penn’s returns surpassed those of Princeton and Yale this year, it fell slightly below those of MIT, Stanford, and the University of Michigan.

According to the University’s Office of Investments, Penn’s endowment achieved an annualized five-year return of 11.4% and a 10-year return of 9.2%. The FY25 results signal a continuation of the endowment’s steady performance since 2022 and coincided with a 13% rise in the S&P 500 during the same period. 

Penn’s spending from the endowment this fiscal year marked a nearly $61 million hike from FY24, when the University spent $1.06 billion from its endowment.

Penn is expected to face a 4% federal excise tax on its endowment income starting July 1, 2026 — a move that University officials have warned could significantly hinder its ability to support student financial aid, faculty research, and capital growth.

The 4% tax bracket applies to schools with a student-adjusted endowment between $750,000 and $2 million. Penn’s current endowment tax is derived from the 2017 Tax Cuts and Jobs Act, which levied a 1.4% excise tax on private universities with endowments of more than $500,000 per student.