Harvard University, the U.S. university with the biggest endowment, recently faced a huge test. In the case of Harvard, it was reportedly the refusal to comply with the Trump administration’s demands that led to the administration announcing a $2.2 billion federal grant freeze. In 2024, Harvard has the biggest endowment in the world, valued at $53.2 billion. The overall structure and conditions of these funds make it impossible to fill that gap and serve as a replacement for federal help.
Today, the endowment exceeds the gross domestic product of nearly 100 countries. It serves as an ever-evolving set of agreements with contributors who come in with particular purpose. Yale University comes in a close third behind Harvard, with an equally strong endowment of about $41.4 billion. A 2024 report by the National Association of College and University Business Officers found that the median U.S. college endowment now stands at just $243 million. By contrast, Harvard’s finances are second to none.
Liz Clark, vice president of policy at the college business officers group, emphasized that much of Harvard’s endowment originates from donations, including those from alumni and community members. The caveat of donor stipulations means that over 70% of the annual distribution must go straight to specific programs or departments. That only leaves 30% of board spending approvals discretionary at the board’s discretion.
“The university will not surrender its independence or relinquish its constitutional rights,” stated Harvard’s official X account in response to the administration’s demands. This position illustrates the institution’s dedication to preserving the surrounding community’s ability to make decisions independent of outside influence.
Catharine Bond Hill, former president of Vassar College, noted that while the endowment can be viewed as a “pot of money” for annual spending, it is critical to understand its intended use. “They don’t give it as a pot of money to be spent this year,” she explained. Rather, donors unconditionally give money with a reasonable expectation that their donations will be used to advance the very initiatives they were promised, year after year.
The various types of investments that make up the endowment—from stocks and bonds to real estate—only adds to the confusion. According to Hill, while Harvard can utilize this financial asset for various needs, “the endowment can be burned through quickly.” Yet, this reality creates difficulties when external funding sources dry up.
Cecilia Orphan is an associate professor of higher education at the University of Denver. Photo by Flickr User National National Science Foundation Chair, Dr. as important for supporting basic, innovative research. “It is very difficult for a university like Harvard or Columbia to conduct that kind of cutting-edge research without that kind of infrastructural support that is separate from the actual research itself,” she stated.
The National Science Foundation’s stated mission is to ensure the U.S. global competitiveness in STEM fields. Right now, federal grants are frozen, making this effort particularly difficult. This funding is indispensable to allowing cutting-edge research to happen. To do this, it relies on both endowment distributions and federal support.
As Hill eloquently explained, the effect of losing such a massive revenue source is like a family experiencing the sudden and complete loss of their primary breadwinner. “If there’s a major source of revenue that has disappeared…you’d have to decide how you were going to allocate your spending priorities,” she said.
The confounding issues with Harvard’s endowment expose the complicated dynamic between private funding and federal support. Donor intent plays an incredibly powerful role in determining how endowments can be spent. Clark acknowledged that donors donate for different reasons, whether it be funding scholarships to students or a specific type of research.