U.S. colleges and universities increased spending from their endowments to help stabilize operations and support their students, faculty and missions in fiscal year 2025, ending June 30, according to data released this month by the National Association of College and University Business Officers and Commonfund.
The 657 institutions and affiliated foundations that participated in the study represented $944 billion in endowment assets. The median endowment size was $254 million, and more than a quarter of participants had endowments of $100 million or less.
Participants reported a 10-year average annual return of 7.7% on their FY25 endowment assets, up from 6.8% the year before. The one-year return for FY25 was 10.9%, down from 11.2%.
Participating institutions withdrew $33.4 billion from their endowments during FY25, up 11% year-over-year and an increase over the past two years of more than 17%. Here's how endowment spending broke down:
- Student financial aid — 47.4%
- Academic programs and research — 17.7%
- Endowed faculty positions — 10.8%
- Operation and maintenance of campus facilities — 7.6%
- All other purposes — 16.6%
On average in the FY25 study, participating institutions used their endowments to fund 15.2% of their annual operating expenses, up from 14% in FY24..
Although returns were strong, endowments did not receive as many donations as in recent years. New gifts for all participants declined by 9.2% to slightly less than $14 billion from FY24's $15.4 billion. Some institutions saw much steeper declines: Those with assets of less than $50 million reported a decline of 26.5%.
Investment Returns
Across all study respondents, institutions with assets of more than $5 billion reported the highest return, 11.8%, while those with assets between $101 million and $250 million reported the lowest return, 10.5% — all returns net of fees.
The highest one-year returns came from actively and passively managed global equities and actively and passively managed developed non-U.S. markets, each delivering returns of about 17%.
In a period of steady returns, three-year returns jumped to 10% from 3.4% in last year's study — FY22's -8% return having dropped out of the calculation. Five-year returns also improved, rising to 10.2% from 8.3%.
The comparatively level returns reported for FY25 across the various size segments, the study noted, may owe to good performance across asset classes and strategies. U.S., non-U.S. and global equities, along with emerging markets, posted the best gains,and private strategies were close behind.
Fixed income delivered its strongest returns in recent years. Not a single allocation produced a negative return in FY25, the data showed.
Endowments from all institution types reported similarly strong returns. Institutionally related foundations and combined endowment/foundations each reported average returns of 11.1%, while public colleges and universities reported a 10.9% average, and private institutions reported 10.8%.
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