Higher Education Funding Disconnect: Spending More, Getting Less

Source: Jane Wellman, Change, November-December 2008

The rich and famous are much in the news these days–colleges and universities that is, the ones with endowments in the hundreds of millions or more and whose run-up in assets has raised questions about their non-profit status from both state and federal lawmakers. The U.S. Senate Finance committee wants to know, for example, why institutions that are reported to average 20 percent annual increases in the market value of endowments of $500 million or more still need to raise tuition and fees every year. And the Internal Revenue Service is preparing for intensive audits of more than 400 institutions, looking at revenue-generating activities housed within them and how those activities fulfill the public or charitable purposes of the institutions. Meanwhile, legislation has been proposed in Massachusetts to levy state taxes on the Commonwealth’s wealthiest non-profit private institutions.

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