Pressure Builds on Colleges to Spend Assets

Lawmakers and other experts are increasingly asking: Should wealthy universities be spending a greater share of their endowments? The Chronicle of Higher Education reports.

Under a plan that has been floated in the Senate, wealthy colleges would be required to spend at least 5 percent of their endowments a year, a requirement that is similar to the rule that governs private foundations.

But passing such a rule for colleges is complicated by restrictions donors have placed on endowment gifts and other issues, such as the involvement of trustees in spending decisions, the newspaper notes.

Even so, a few institutions are looking for ways to increase the amount of the endowment they spend. Stanford University plans to spend 5.5 percent of its endowment in its 2008 and 2009 fiscal years, for example.

Plus: In an opinion article, two college trustees argue that forcing endowments to spend more quickly might help in the short run but would be a recipe for long-term weakening of a major national asset.

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