What is the endowment?
Simply put, the endowment is the university's savings account—it’s accumulated capital invested to generate interest. This interest and capital gains then become the optimal source of return that allows us to optimize our programs. Most important, interest from the endowment is the most desirable source of funding for supporting our most important asset—the intellectual capital that comes with the very best students and the very best professors and scientists.

Our endowment gives us long-term strength
Our policy of spending only a portion of the total return of an endowed fund and reinvesting the remainder in the fund's principal helps protect against the impact of inflation and adverse market conditions, enabling endowed funds to grow more quickly and generate a greater return in the future. As Carnegie Mellon's endowment grows, it will help ensure the strength and stability of our institution and better enable us to maintain our leadership position in education and research.

Increasing our endowment is our strategic priority
Despite strong market growth and investment strategies, Carnegie Mellon is undercapitalized compared to its peers. Carnegie Mellon's rise to leadership among national research universities has taken place in a remarkably short time. This rapid growth in achievement and reputation has not been matched by parallel growth in our endowment, our long-term assets. This puts a strain on our capacity to support fundamental programs at the same level as our competitors and hampers our ability to capitalize on new opportunities. Other universities are able to rely less on tuition income and sponsored research and more on endowment income and annual gifts.

Our competitors can invest significantly more of their endowment interest into student scholarships, fellowships and other support programs for learning. One way to measure and compare endowment is to examine endowment market value per student. As you can see, Carnegie Mellon is well below the average for our top competitors, making it more difficult to attract and retain the best students, despite the recognized strength of our academic programs.