Massive Accumulation of Endowment Wealth by the WorldҀs Best-25 Universities

An assessment carried out by AllAboutUni.com reveals that a massive accumulation of endowment wealth has been put together by the World's Top-25 universities [1]. AllAboutUni.com is an independent, global and interactive website where visitors can obtain information about universities (global rankings, student reviews, university news and campus pictures).

The WorldҀs Top-25 universities in 2008 (click here) are mainly located in the United States (18 out of 25) and are often private institutions (11 out of 25). This distribution is more pronounced for the WorldҀs Top-10 universities, where 8 out of 10 are located in the United States (US) and 7 out of 10 are private institutions (click here).

Total endowments for each of the universities were collected from Wikipedia.org (accessed on 29 October 2008), and non-US endowments were converted into US dollars (exchange rate of 29 October 2008). The endowments of two universities were not available: the University of Tokyo in Japan (ranked 19th) and the Swiss Federal Institute of Technology ր Zurich in Switzerland (ranked jointly 24th). The analysis is therefore based on 23 universities (18 from the US and 5 from other countries (United Kingdom (3), Canada and Japan) and is a conservative estimate.

The total endowment of the 23 universities was $170.2 billion, and ranged from $172 million (University College London in the UK, ranked 22nd) to $36.9 billion (Harvard University in the US, ranked 1st). The median endowment is $5.9 billion, with universities in the US having higher endowments (median of $6.1 billion, range $471 million to $36.9 billion) than those in the other countries (median of $2.2 billion, range $172 million to $3.4 billion).

Four private universities in the US had 56% of the total endowment wealth of the World's Top-25 universities: Harvard University ($36.9 billion - 22%), Yale University ($22.9 billion - 14%), Stanford University ($17.2 billion - 10%) and Princeton University ($17 billion - 10%). It is therefore no surprise that the private universities in the US have higher endowments (median of $7.2 billion) than the public universities in the US (median of $1.3 billion).

This accumulation of wealth by the World's Top-25 universities is quite astonishing. For example, the total wealth accumulated by the World's Top-25 universities is greater than the budget of the State of California ($111 billion in 2008-09) or it places these universities 41st in the country ranking of Gross Domestic Product (GDP) according to the International Monetary Fund (in front of Nigeria, Romania and Israel).

The accumulation of endowment wealth by universities has both positive and negative sides. A large university endowment supports the operating budget of the university and gives the university greater independence and resources which can be used, for example, to establish new research institutes or to fund scholarships. In the fiscal year 2008, distributions from the Harvard University endowment totalled $1.6 billion, contributing more than one third of the university's operating budget in addition to supporting substantial capital outlays (click here).

There are also a number of negative sides associated with large university endowments. One of these is that it gives the university an image of accumulating too much wealth and being greedy. Another is that it leads to criticism about the allocation of the endowment income (for example, Harvard University could allow its students to attend for free for just $300 million, which is a fraction of the 2008 endowment income (click here). Finally, it makes it impossible for other (less well endowed) universities around the world to compete on an even playing field with universities that have established very large endowments.

Background note:
[1] The analysis is based on a ranking of the WorldҀs Top-500 Universities produced by the Institute of Higher Education at the Shanghai Jiao Tong University (click here). Several indicators of academic or research performance are used to establish the ranking, these include staff winning Nobel Prizes, highly cited researchers and articles indexed in major citation indices. The rankings have been published since 2003, with the 2008 ranking published on 15 August 2008.

Eight EU countries not represented in the WorldҀs Top-500 Universities

An assessment carried out by AllAboutUni.com reveals that 8 of the 27 countries in the European Union (EU) are not represented in the WorldҀs Top-50 universities. AllAboutUni.com is an independent, global and inter-active website where visitors can obtain information about universities (global rankings, student reviews, university news and campus pictures). It publishes regular reports on universities around the world.

The analysis is based on a ranking of the WorldҀs Top-500 Universities produced by the Institute of Higher Education at the Shanghai Jiao Tong University (click here). Several indicators of academic or research performance are used to establish the ranking, these include staff winning Nobel Prizes, highly cited researchers and articles indexed in major citation indices. The rankings have been published since 2003, with the 2008 rankings published on 15 August 2008.

The eight EU countries that are not represented in the World's Top-500 universities in 2008 are: Bulgaria, Cyprus, Latvia, Lithuania, Luxembourg, Malta, Romania and Slovakia. In other words, small countries in Western Europe (Cyprus, Luxembourg and Malta) and countries in Eastern Europe (Bulgaria, Latvia, Lithuania, Romania and Slovakia). All of the other EU countries are represented in the list, with the top five being: Germany (44 universities), United Kingdom (42), France (23), Italy (22) and the Netherlands (12).

Overall, the Europe region is well represented in the World's Top-500 universities, with roughly 40% (n=210) of universities based in this region compared to 40% (n=190) for the Americas and 20% (n=100) for Asia/Pacific ( click here). However, when one looks at the Top-100 Universities, there is a predominance of US universities (58 universities versus 23 for Europe), and the United Kingdom performs better than other European countries (click here). In the Top-10 Universities, US and private universities are dominant (click here).

One hypothesis is that the larger EU countries will dominate the number of universities in the list of the World's Top-500 Universities. This is clearly the case with Germany, United Kingdom, France and Italy providing the most (62%) of the universities from Europe. However, if one adjusts for population size (i.e. one calculates the number of universities in the Top-500 per 1 million inhabitants in the country), the following ranking is obtained: Sweden (1.2 universities in the World's Top-500 Universities per 1 million inhabitants), Finland (1.2), Austria (0.9), Denmark (0.8) and the Netherlands (0.7). This means the EU countries with the most universities per 1 million inhabitants are located in smaller countries in Western Europe, especially countries in Scandinavia.

The AllAboutUni.com website provides a portal where students can find independent information about universities from around the world. рThe website allows students to compare colleges and universities online based on independent information: the Shanghai rankings, student reviews and campus pictures. Combining this with the information provided by university websites, we hope students will be able to find the college or university of their dreamsҀ, says John Paget, Founder of the AllAboutUni.com website. John studied Economics at the London School of Economics and then completed graduate studies in the United Kingdom and Switzerland. The AllAboutUni.com website was launched in November 2007.