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Comment by csa | Hacker News Reader

> Believe it or not, elite universities are reaching similar heights. MIT is at roughly $20M endowment per faculty member.

If you ran MIT, what do you think a good endowment amount per faculty member would be?

I’m not sure $20m is far off from optimal.

I might go down to $15m, with an annual draw down $750k so (5%) per year to cover burdened labor rate of average professor and certain percentage (half?) to go to “support” (i.e., everything else, including libraries, staff, maintenance, maybe grad student funding, etc.). Even that seems sort of on the tight side.

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$20M might be optimal if tuition was $0 and they didn't receive any research grants.

> if tuition was $0

https://sfs.mit.edu/undergraduate-students/the-cost-of-atten...

I couldn’t find the number quickly, but tuition is not a big funding source for the university. They are quite generous with tuition grants. This might not be true for the MBA program, but probably is for many/most other programs.

> … and they didn't receive any research grants.

Yeah. This is where I think one needs to look at exactly where expenses go. Grants don’t go as far as some folks think they do.

Anyway, what’s your number with things being as they are?

I’m still ok with $15-20m, and I am not particularly fond of university admins and the way they run things.

> tuition is not a big funding source for the university

Princeton reported a paltry ~$154.5M in net tuition and fees for FY2023, which seems low ($18K/student.) They claimed $20K "net cost after aid" for students on financial aid.

https://finance.princeton.edu/report-treasurer

https://www.princeton.edu/news/2023/03/31/princeton-trustees...

Indirect cost, how I loathe thee…

I'd go down to about $2M, which is where MIT was at a quarter century ago, when it was it's prime.

Being answerable to funding sources, tuition, etc. is a good thing. Having money to soon off from is not.

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