A university’s endowment is often a little-understood but vital component of an institution’s stability and success. Rensselaer is building its financial foundation to continue an unprecedented Institutewide transformation.

By Peter Dizikes
Photos by Scott Barrow

A healthy and growing endowment is a university’s lifeblood — a foundation that allows a school to compete and thrive. Yet the endowment is often one of the least-understood components of a university, an abstract number harder to remember than hockey scores, SAT statistics, or annual tuition.

With a renewed emphasis on building the endowment, Rensselaer is bringing it to the fore by demystifying this vital financial resource and making it relevant to the Institute’s plans for continued growth.

An institution’s endowment is the accumulation of funds and assets that underwrites major projects and secures long-term financial health. Rensselaer’s endowment now stands at around $750 million, up from $531 million in 2002, but it still ranks 90th nationally, well behind other technological research universities. MIT, for instance, ranks 6th with an endowment that stood at $8.3 billion in 2006, while Carnegie-Mellon is 69th at $939 million. Cornell boasts a top-20 endowment of $4.3 billion, while the University of Rochester ranks 35th with $1.49 billion.

“We know that to continue to be a really excellent institution, our endowment has to continue to grow,” says Donald Fry, Rensselaer’s vice president for institute advancement. “A strong endowment positions a university to respond to new and emerging opportunities, and places those programs on more secure financial footing.”

Another common yardstick of higher-education resources is the endowment-per-student figure. Rensselaer has about $113,000 in endowment per undergraduate student — a healthy figure, but less than many universities with whom it competes. MIT’s endowment-per-undergraduate ratio is at least 10 times as large, and Rochester’s more than twice as large.