Yale’s $25.4 Billion Endowment Declines in Value

The video discusses Yale University's $25.4 billion endowment, highlighting its positive investment return despite a decline in value. It explores the spending rates of endowments, comparing them to foundations, and emphasizes the importance of maintaining endowment value for future students. The discussion includes the challenges of low returns and the need for strategic spending to preserve purchasing power.

What was the value of Yale University's endowment as mentioned in the video?

• $20.4 billion

• $25.4 billion

• $30.4 billion

• $35.4 billion

How does the spending requirement of foundations differ from that of endowments?

• Foundations are required to spend 5% annually, while endowments have more discretion.

• Foundations have no spending requirement, while endowments must spend 5% annually.

• Both foundations and endowments must spend 5% annually.

• Foundations must spend 10% annually, while endowments have no requirement.

What is a common method used by colleges to determine their endowment spending rate?

• Based on the previous year's returns only

• An average of investment returns over three to five years

• A random percentage decided annually

• A fixed percentage set by the government

Why do universities prefer not to spend down their endowments significantly?

• To compete with other universities' endowments

• To increase their ranking among universities

• To avoid paying higher taxes

• To ensure funds are available for future students

What challenge is mentioned regarding the future returns of endowments?

• They are expected to be consistently high

• They are expected to be low, affecting spending power

• They will be unaffected by economic changes

• They will double every decade