In late January, I half-jokingly asked when Princeton and other universities would line up to start requesting bailouts. What a difference a month makes. From The Daily Princetonian:
The $787 billion stimulus measure that President Obama signed into law
on Feb. 17 may pour a significant amount of money into science research
at the University, even as administrators impose budget cuts across all
departments, Dean for Research A.J. Stewart Smith GS ’66 said.
In an earlier New York Times article, Dean Smith calls the money "a miracle." Considering how much of the endowment billions are tied up in things like real estate, it probably is.
Meanwhile, Business Week suggests abolishing university endowments based on an interestingly corporatist set of rationales. While it is hard to buy parts of BW's argument, they do dig up a rather interesting article from 1990 written by Yale Law Professor Henry Hansmann called "Why Do Universities Have Endowments?". From BW:
The article runs through 14 justifications for endowments and raises questions about all of them. For example, it's often said that endowments help future generations of students, and that's true. But Hansmann points out that by saving donations rather than spending them now, universities are giving advantages to future students at the expense of current ones.
For those interested, the full Hansmann article is available here.
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