Poland’s very ex-foreign minister was recorded without his knowledge a couple of years back, dishing obscenely on all things Polish. His critique of the Polish university system has just been released.
“You know, [American universities] understand what all those [Polish] rectors — those d**kheads and layabouts — over here fail to comprehend — that, you know, the main financing for universities can come from … endowments. It’s just that you need to have a database,” [Radosław] Sikorski reportedly said…
He was allegedly responding to [his dinner partner], who said: “I saw those f**king [American] campuses, all of it, those budgets at those universities, the five billion that Stanford has annually…. Five billion is the money they have to spend. One third is from endowments, one third from grants, one third from invested funds. So five billion is, f**k, huge business.”
UD‘s not quite sure if this guy’s division of Stanford funds, and yearly availability of those funds (he doesn’t talk about what they actually spend, and universities like Stanford are famous for hoarding their endowments), is anywhere near accurate, but she wonders if he knows how paltry a number five billion is for Stanford. Its wealth is vastly, vastly greater than that. She also wonders if either of these guys, who are basically complaining about public funding of universities in Europe, knows how much government subsidy Harvard, Princeton, and Stanford receive.
August 25th, 2017 at 12:18PM
On the contrary, what he’s talking about is precisely what Stanford actually spends (or spent – it’s ~$6 billion now).
August 25th, 2017 at 2:33PM
I’m not a fan of his, but Radek is basically right about the scale of the Stanford budget: http://facts.stanford.edu/administration/finances. He’s a little off, however, about the income streams. In the past, a typical division would be 1/3 endowment income, 1/3 sponsored research and non-endowment gifts (e.g. annual giving), and 1/3 tuition. Now at most of the high-endowment schools it’s closer to 50% endowment income, since you can only squeeze the students’ parents so much and sponsored research is also not infinitely expanding, and is in fact shrinking. Also, at some places, the endowments are so huge that you have to spend at least some of it. He’s also right that American university endowments are the envy of European state-funded flagship schools. The Dean of Arts of a top Irish university told me once how much he welcomed American junior-year-abroad students, since their fees were off-budget found-money that he could use for new projects. It you have to get excited about finding $15K here and there, then things are tight. Of course, the U.S. endowment cash cow is only possible because donors can write off their contributions, a concept that doesn’t really exist most other places and which is a hidden government subsidy, of course. It’s also due to the exquisite grooming of their alumni, starting from the moment of admission, to give and give more. It’s a little more than just a database, Radek.
August 25th, 2017 at 3:00PM
Mr Punch, Polish Peter: Thank you for the corrections and for the details.
August 26th, 2017 at 3:14PM
Question. If all the athletic buildouts are as financially efficacious as claimed by the project’s shills, then why don’t uni endowments use their money to invest in said project? I’m not aware of any endowment that has engaged in stadium, arena or athletic facility financing. Why the hell not? Notre Dame 1/2 billion dollar stadium upgrade is paid mostly with bonds, none of their $10 billion endowment has been utilized. Wall Street fees for ND’s bond financing has to be tens of millions alone. That’s money that can be used for scholarships. If anyone has some insight, it would be appreciated…..
August 27th, 2017 at 3:28PM
So is “dickhead” a literal translation from the Polish? Inquiring minds….
August 28th, 2017 at 2:15AM
Anon: Not having seen the original Polish text, it’s hard to say how that’s being translated, but Polish has a rich array of colloquial expressions involving anatomy and activities that are made more colorful with prefixes and declension.
August 28th, 2017 at 6:53AM
Polish Peter: LOL. Lovely way to put it! UD
August 29th, 2017 at 4:24PM
Charlie, Notre Dame’s bond rating is Aaa and they paid only 3.4% interest when they sold $400 million of bonds a couple of years ago. Although 2016 was a bad year for their investments, they are betting that they can make more by holding the dough and investing it rather than cashing some out to build the stadium.
It also depends on how much of the endowment is restricted by donors to certain uses (student scholarships, faculty chairs, book purchases, etc.). There really is no such thing as “an endowment”–many institutions have hundreds or thousands of separate funds.
August 29th, 2017 at 6:33PM
@TP, if ND admins think they can find better investments than their own stadium, then how do they induce any bond purchaser to invest in ND bonds? Financial institutions are looking at the same “better” investments as is ND.
The U of California also has the same bond rating as does ND. The way it was done was by pledging student loan cash flow to the bond investors. Reference the UC faculty study entitled They Pledged YourTuition. I’m pretty sure ND used the same mechanism.
Point is, athletic buildouts aren’t financially efficacious. That’s why NFL owners demands public financing for their venues. It doesn’t matter if it’s a called an endowment or not, I know of no university that puts its own money into their athletic construction. I’m going to guess that the institutional bond holders have far more resources than does a uni such as ND, and have the capacity to bear the risk…,