The total value of Northwestern University’s endowment shrank by 0.89 percent last year, dropping the school from ninth to 10th place in a ranking of colleges by endowment size.

That’s a bit worse than the 0.73 percent average for colleges in a new report from the National Association of College and University Business Officers.

The group notes that the figures are not a measure of the investment return schools achieved — but reflect investment return, plus withdrawals to fund university operations, additions from donor gifts and the cost of endowment management fees.

Northwestern’s endowment now stands at $7.12 billion, which makes it tops in the Chicago area. The University of Chicago was second in the region with an endowment of $6.57 billion.

Harvard continues to lead the pack nationally with an endowment of $30.53 million, although its figure was down 3.76 percent from 2011.

Most other Chicago area schools showed endowment gains for the year, ranging from 0.3 percent at DePaul University to 8.1 percent at the Moody Bible Institute.

An earlier report showed that as of the end of its last fiscal year on June 30, Northwestern had achieved a 5.3 percent rate of return on its endowment, one of the best returns among Chicago-area schools.

Bill Smith is the editor and publisher of Evanston Now.

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  1. “Why Shouldn’t Princeton [Northwestern] Pay Taxes?”

    The Wall Street Journal Aug. 20, 2013 p. A15 has an article “Why Shouldn’t Princeton Pay Taxes?” that might be of interest to residents in considering how they feel about NU and taxes [payments/gifts/etc.] from it.
    The article is generally favorable to the idea of at least some parts of the university income being subject to taxes but also points out that the universities may then want more of a voice or even control over governmental decisions [e.g. zoning, education] which the city governments may not welcome.
    The article does not talk about whether the city would use the money wisely or as in the case of Evanston government see it as a means to favor their pet projects and companies they pick as “winners.”
    Generally I think NU probably handles their finances better than the city government.  However some of the buildings they have put up make me wonder.  But then they have to keep alumni happy and students who want the ‘latest and best of everything’ [sports facilities, student unions with bowling alleys, theaters, professional majors like music, journalism instead of liberal arts education, and on and on] rather than keeping tuition, room/board, fees low while using available funds for actually improving education.  But a whole book was written about this by Richard Kent Vedder [NU grad and professor of economics emeritus at Ohio University.]“Going Broke by Degree: Why College Costs Too Much.”

    The article alludes to Princeton's Endowment.  Last I knew it was over four times NU's per student.

  2. NU and Evanston

    I would hate to think what Evanston would be without NU. That said, it makes mutual sense for the University and city to have a close, even intimate, working relationship. As far as governance is concerned, I think NU might have the edge (not sure the form of governance however); financially they most certainly do.

    While I don't want the school to take over the town, it is silly for it to ignore helping its host town and likewise the city needs to be very comfortable with its largest client. Just makes basic sense.

    This relationship (Princeton, Northwester, Harvard/MIT, etc) is well-worn. Time to do something and let's get creative here. For example, NU could use a hockey rink. Evanston could use a hockey rick. Hmmmm.

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