News

After 19% investment return, endowment climbs to $12.4 billion

Treasurer says performance enables MIT to catch up on building repairs

MIT’s primary investment pool generated a return of 19.2 percent in the 2014 fiscal year, during which the Institute’s endowment rose to $12.4 billion, the MIT Investment Management Company announced last Friday.

Israel Ruiz SM ’01, the executive vice president and treasurer, called the returns “impressive” in a report on MIT’s finances for the 12 months that ended on June 30. The performance was the highest reported since 2007.

Ruiz said that MIT’s financial position has allowed it to pay for construction and renovations that are part of a broad plan to “renew” the campus.

MIT’s endowment was first reported to cross the $10 billion mark in 2012. MIT has the sixth largest college endowment in the country, after Harvard, Yale, the University of Texas system, Stanford, and Princeton.

A fraction of the gains from investments go toward the $3 billion it takes to keep MIT running each year. The rest comes mostly from federal research grants. Tuition from undergraduates, graduate students, and others contributed about $320 million in the last fiscal year, according to Ruiz’s report.

“In fiscal 2014, MIT expected Federal research funding to be under pressure and result in overall reduction of research volume,” the report reads. “The Institute exercised expense control in administrative areas, while investing in education and research activities.”

About half of the $3 billion was spent on salaries, wages, and employee benefits.

The Task Force on the Future of MIT Education, co-chaired by Ruiz, recently recommended that MIT expand its fundraising, suggesting that MIT might procure donations from not just alumni of the undergraduate and graduate programs, but also former postdoctoral students and people who have taken online classes via MITx.

MIT is currently in the “quiet phase” of a fundraising campaign expected to bring in billions of dollars from alumni and other donors over several years.

The task force also suggested making money from technology licensing. Another proposal was to invest in MIT inventions and startups through an MIT-based venture fund.

6 Comments
1
Anonymous almost 4 years ago

MIT should work harder on cutting costs before going after more people begging for donations. I am very grateful to MIT, and wish the best for it, but I would be very reluctant to donate after all of the wastage that I see here: I don't want my donations being spent to pay for lights left on all over the place, heating running full blast while there is a door open, and overly generous stipends (good graduate students go where the best research is done, not where they make the most money).

2
Michel Johns almost 4 years ago

MIT should cut the costs any how. And over all I love studying in MIT. I had a dream of to be in MIT from my childhood and now I am here.

3
Sam Jhonson almost 4 years ago

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4
Anonymous almost 4 years ago

1

Where do you get the idea that MIT has overly generous stipends? We are a bit above the national average (http://www.glassdoor.com/Salaries/graduate-student-salary-SRCH_KO0,16.htm) but when you consider cost of living in Boston vs national cost of living that should hardly be surprising. According to Forbes (http://www.forbes.com/places/ma/boston/) Boston's cost of living is 21 above that of national average while our stipend is only 11 greater than national average.

5
Anonymous almost 4 years ago

4:

Stipends have risen from $1980/month in 2004 to $2771/month in 2015: an average annual increase of over 3.5, despite average national inflation over that period being only about 2.5. All universities increase their student stipends to keep pace with each other, so it is not surprising that stipends are high everywhere. Despite living in my own studio apartment while at MIT, the stipend is still enough to have allowed me to accumulate quite a bit of money.

MIT may be one of the top ranked universities in the world, but I wish people wouldn't allow that to make them feel so comfortable. I'd love to see plots of the ratio of money spent on research and non-research activities at MIT over the past fifty years, or a measure of research output versus total spending. I'm quite sure they would show that MIT is getting bloated. We need to cut down on non-research spending, reduce the number of administrative staff, and stop throwing away money on lights, heating, and other waste.

6
Anonymous almost 4 years ago

5:

Okay lets say that MIT only changed stipends to match inflation, so in today's dollars that would be $2490 rather than $2771 as you quote, so that is a savings of $281/grad student/month. or 21.9 million per year. In FY2013 the MIT operating budget was 2.9 billion. So cutting grad student pay would only save about 0.7 percent of the operating budget.

I am not arguing that MIT couldn't reduce waste, hardly so. I see wasted money quite frequently (do we need to have ridiculously expensive furniture and what not), but I am just saying that grad student stipends wouldn't help much.