By Donald Gilpin

Princeton University’s endowment fund has reported a return of 3.9 percent and a total value of $34.1 billion for the fiscal year ending on June 30, 2024. The University has recorded an average annual return of 9.2 percent over the past 10 years, but the 2024 gain was the smallest among the eight Ivy League universities and follows Princeton’s losses of 1.5 percent and 1.7 percent in the two previous years.

Returns for the 2024 fiscal year at other Ivy League institutions ranged from 11.5 percent at Columbia to 5.7 percent at Yale, with Princeton’s underperformance for the year apparently due to large investments in private equity and venture capital at a time when publicly traded stocks, particularly technology stocks and the S&P 500 index, have outperformed most experts’ predictions.

PRINCO, the Princeton University Investment Company, emphasizes a “long horizon” investment strategy, focusing on many decades rather than a single year. The endowment’s investments returned 46.9 percent in 2021 and have averaged 9.9 percent over the past 20 years.

Vincent Tuohey became president of PRINCO this past June, succeeding Andrew Golden, who had served as PRINCO president since 1995.

Princeton University reported the 3.9 percent return in an October 24 press release, but declined to comment further on their investment results, whether there were any changes in strategy contemplated, or whether the past three years’ weak returns have put any constraints on the University’s budgeting decisions.

The University press release emphasized the importance of Princeton’s endowment, which ranks fifth in size in the country behind Harvard, University of Texas, Yale, and Stanford. The endowment funds teaching and research at Princeton, as well as support for undergraduate and graduate students from all backgrounds.

“Generations of generous philanthropy, coupled with excellent stewardship of our endowment, enable the University to make bold investments in human talent,” said Princeton University Provost Jennifer Rexford. “The endowment allows us to offer unparalleled financial support to our students, launch major research initiatives, and build state-of-the-art facilities.”

Earnings from the endowment provide about two-thirds of the University’s net annual operating revenues, according to the University press release, and that percentage has increased as the endowment has grown. In 1997 only one-third of the University’s operating revenue was funded by endowment earnings.

As Princeton University works to increase the socioeconomic diversity of the student body, endowment funds currently cover about 70 percent of the undergraduate financial aid budget.

Distributions from the endowment totaled $1.7 billion in the 2024 fiscal year, and over the past 20 years the endowment has contributed $19.8 billion toward the University’s operations.