Why Can’t Stinking Rich Ivies Cope With Losing a Few Hundred Million?
26th March 2026
The Economist, a Voice of the Crust.
olumbia, the first victim of Donald Trump’s assault on America’s grandest universities, has an endowment of roughly $15bn. Mr Trump’s administration withheld a mere $400m in federal funding when it handed Columbia its peremptory list of demands. Why, indignant alumni ask, did Columbia not simply tell Mr Trump to get lost and fall back on its plump cushion of billions?
Alas for Columbia and other rich universities, the calculus is not so simple. Their endowments are not easy to access. Research grants are not the government’s only leverage. And the chaos Mr Trump has created in the markets makes it a bad time to be selling or borrowing. Indeed, even if research funding were still flowing, the Ivies’ accountants would be losing sleep.
Federal research grants account for a double-digit share of the revenue of most prestigious private universities, so losing them permanently would be a body-blow for any of them. They make up 11%, 15% and 18% of the income of Harvard, Yale and Princeton universities respectively. Columbia, at 20%, is especially vulnerable.
Even for those institutions still receiving such disbursements, the government is imposing arduous new rules. The National Institutes of Health (nih), which dispense most funds for medical research, announced in February that they will cap the portion of grants that can be spent on overheads at 15%. Previously, about 26% was spent in this way. Universities have challenged the change in court and on April 4th a judge threw out the cap. But the administration has said it will appeal, so all universities may soon have to find extra cash to keep their labs operating.
Universities’ endowments are not as much help as their billion-dollar valuations would suggest. For a start, much of the money is reserved for a particular purpose, funding a specific professorship or research centre, say. Legal covenants often prevent it from being diverted for other purposes. In any case, the income from an endowment is typically used to fund a big share of a university’s operating costs. Eat into the principal and you eat into that revenue stream.
The ‘ivy-league’ universities (which commonly refer to similar universities not belonging the the actual Ivy League, like Stanford, MIT, Chicago, and Rice) aren’t really educational institutions (as a glance at the supposed qualifications of their faculty members and administrators makes clear) but rather a jobs program for the Clerisy. Much like the Welfare State, there are always more Good Causes and Undeniable Human Rights to fund, so the money is never enough.