Why do these places have such huge endowment funds? What are they for?
Its become a bizarre situation. They are tax-free, they indeed have been elite for hundreds of years, so have been investing and compounding interest over that time. Their elite graduates also donate at much higher rates. And they own many patents and inventions due to their historical research base and success, which also pays them very well. And because of this, they are also often first in line for MORE government research and grant money. They of course have highly intelligent investing teams.
Moreover, they never touch the endowment for daily operating costs, or even investment in new buildings and capital stock.
They are now like giant hedge funds, with hundreds of people running them - with universities attached.
It really is Matthew 25:29 in the real world.
“Why do these places have such huge endowment funds?”
The money comes from alumni donations and foundations, among other sources - the institutions don’t pay taxes on the capital or it’s earnings, which can be used to supplement the operating budget or for emergencies. It’s also a way they keep score (Harvard’s endowment is some $53 billion).
For applying for grants for federal and state money.
While teaching lower division courses that could be taught at a junior college just as well.
Higher education is best only at upper division and graduate levels in research subjects that need technical equipment and technical expertise. Don’t need graduate degree in drama or screenwriting or languages.
Waste of money. Easy to forge a diploma anyway...
Take a few classes and read a few good textbooks and be good at it and no one will know if you went to Yale or another institution of higher learning.