In the course of finding the previous book, I also had a citation to this new one published this year. I got this one from Interlibrary Loan, since it was not available in Colorado.
Bruce Kimball is in the Department of Education Studies at The Ohio State University. Co-author Sarah M. Iler got her Ph.D. from OSU, and she is currently teaching at Columbus State Community College.
In the preface, they note that several foundations declined to give them grants to support the research, since the foundations thought it should be written by economists, instead of historians of the american education system. They showed them. They were able to get research funding from a variety of sources.
The book essentially covers the years 1869 to the present. That is roughly when colleges began the work of building up an endowment, but the term didn’t become regularized until about 1920. Between 1870 and 1920, a college might consider buildings, equipment, property, trusts, and other financial holdings to be part of an endowment, but those items may or may not be considered endowment today.
The Ivy League schools plus other high prestige private universities (such as the U of Chicago, JHU, MIT) discovered the benefits of the “Free-Money Strategy” as covered in chapter 2. Charles W. Eliot popularized the idea with his annual reports to colleges in the late 1800s to the early 1900s. His father lost a family fortune in the panic of 1857, so that taught Charles the importance of saving money with sound financial strategies.
I skimmed most of the book, since it dealt with the history of how elite colleges developed their endowments with alumni drives, annual fund drives, and ways to influence politicians to give people tax breaks when they donate to colleges. I wanted to read chapters 9 through 11, since they looked at the college cost situation from 1980 to the present. Much of the chapters discussed two theories. One called “cost-disease theory” and another called “revenue-cost theory.” The revenue-cost theory seems to have won the day to explain the spiraling costs of colleges these days.
The conclusion of the book provided a nice overview. I liked the line on pages 274-275 where it was noted that rich universities “are acting like they exist to protect their endowments, instead of the other way around.” (From a law professor, Paul Campos, who stated this in a NY Times article in 2020.) Yes, this does seem to be the case. Colleges work very hard to build up a huge endowment, but to what end. Where should our higher ed spending go? Would a dollar be better spent going to Harvard to add to their 40+ Billion dollar endowment, or would that dollar be better spend helping an HBCU or to a community college scholarship for a first generation college student?
This book has me thinking that if I give to colleges in the future, I should have that money go to less wealthy institutions.
