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Hamilton College’s endowment provides valuable financial support to the operations of the college, financial aid, and faculty and student endeavors.
In addition, the size of the endowment, per student, is a metric that students and families use when visiting colleges, as it is often an indication of the ability of a school to provide financial aid.
As of June 30, 2017, Hamilton College’s endowment was worth $954 million, a number that placed Hamilton’s endowment per student at 41st in the country, directly behind Claremont Mckenna, and several places ahead of the University of Pennsylvania and Northwestern University.
However, as of Dec. 4, 2017, College President David Wippman confirmed to
Spectator
Editor-In-Chief Charles Dunst ’18 that Hamilton’s endowment has recently passed $1 billion.
David Wippman, when asked for additional comment, said that “Reaching this milestone highlights the generosity of our alumni and friends. The endowment generates almost $40 million per year that supports financial aid and other key College priorities. But we are mindful that what goes up may come down, and that we must raise substantial additional funds to meet our goals for the College’s future.”
The last publicly available summary of Hamilton’s endowment was released on June 30, 2016, during a routine audit by accounting firm KPMG. Equity securities, both U.S. and international, composed the largest parts of the endowment.
U.S. equity securities accounted for about $255 million of the endowment, while international equity securities made up nearly $221 million of the endowment.
In addition, several other large categories of investments accounted for significant portions of the endowment. Investments lodged with hedge funds made up over $139 million of the endowment, and investments in the real estate industry accounted for $42 million of the endowment.
Furthermore, the college’s investment in the energy industry, which totaled around $35 million, has sparked controversy recently. Recently, students have circulated a petition calling for divestment, as they believe this investment to be concentrated in sectors of the energy industry that produce fossil-fuels and other negative externalities on the environment.
The major reason for Hamilton’s endowment sudden growth has been the high performance of the stock-market since President Trump’s election.
Howard Silverblatt, the Senior Index Analyst at S&P 500 Dow Jones Indices, estimated that the S&P 500, a market-value weighted index of 500 stocks, has grown $2.04 trillion since President Trump’s election last November.
Elizabeth Jensen, the Christian A. Johnson Excellence in Teaching Professor of Economics, told
The Spectator
that “First I’d remind readers about the difference between nominal and real dollars! So a $1 billion endowment today does not represent the same purchasing power that a $1 billion endowment represented in previous years.”
One of the reasons the index has soared during the period after the election was because of the hopes that President Trump would institute tax reform that would lower the United States corporate tax rate, which is among the highest in the world.
Within the S&P 500, the technology sector has grown the most since the election (by 30 percent), which had a market value growth of $1.09 billion.
This is because the technology firms such as Apple and Alphabet (Google’s parent company) have stashed billions of dollars overseas taking advantage of loopholes; the recently passed Republican tax bill could drastically change such loopholes.
Echoing President Wippman’s statement, Professor Jensen also said that “More importantly, I’d say that Hamilton is fortunate to be one of the private colleges with a sizable endowment per student, thanks to the generosity of donors over the years and careful management of funds.”
“I’d note that endowment income plays a major role in maintaining financial aid and our commitment to need-blind admissions — enabling us to strengthen commitments to diversity — and to covering educational costs of all students.
“Endowment income also helps us recruit and retain strong teacher-scholars who want to work with bright undergraduates; it lets us think about new curricular initiatives and pedagogies. And Hamilton uses those funds for other important purposes such as maintaining our physical plant, including the athletic facilities and buildings such as the museum and theatre/studio arts building,” she added.
“Endowment income lets us offer the type of education we believe in and strive to offer to qualified students.”
Consequently, endowment per student has increased since surpassing the $1 billion mark from $489,600 to at least $512,820. The College endowment, however, remains in the lower half of all NESCAC college endowments.
