My Endowment Is Larger Than Yours: Elite Universities Bill Taxpayers While Growing Cash Reserves

President Donald Trump has repeatedly promised to reduce federal spending at private universities, especially those he considers “woke” or left-leaning. To some extent, he’s been successful. Private universities received $22.3 billion of federal grants and contracts in fiscal year 2025 — the lowest amount since 2018, adjusted for inflation.

However, Trump has yet to fully undo the spending spike that began during his first presidential term and continued during President Joe Biden’s administration. Private colleges receive 40% more federal research funding today than during an average year under President Barack Obama, even adjusted for inflation.

Some of the money helps fund weapons development, disease research, and more. It also forces taxpayers to spend tens of billions of dollars every year on overhead costs such as laptops and garbage collection.

Our review of 20 elite private schools also found a moderate correlation between per-student federal funding and per-student endowment growth. Universities that receive the most taxpayer money are the most likely to grow their own private reserve of cash, too. Lavish federal funding and preferential tax treatment allows them to avoid dipping into their endowments on research and other costs of doing business.

Today, Ivy League and other elite schools are sitting on endowments of up to $55 billion thanks to your generous support.

The Elite 20

We sampled 20 universities with the largest endowments and federal funding levels, including all eight schools of the Ivy League and prestigious research schools like Duke and Emory.

The numbers exclude student aid like Pell Grants. Money was appropriated during the Biden administration and continued to flow during the Trump administration.

Three schools — Johns Hopkins University, California Institute of Technology (Caltech), and Massachusetts Institute of Technology — have been the top recipients of federal money for years. They accounted for more than 30% of the total research money sent to all private colleges in fiscal year 2025. There are 34 countries whose entire gross domestic product (GDP) is lower than the amount of research funding sent to Johns Hopkins last year.

From 2018 to 2025, these schools’ endowments grew by 70% on average. Endowments at Vanderbilt and Emory more than doubled. Johns Hopkins’ endowment more than tripled.

Endowment growth is primarily driven by private donations and investment returns. But there is also a moderately strong relationship between the 20 elite schools’ per-student federal funding and their per-student endowment growth from 2018 to 2025.

Methodology: Spearman correlation analysis revealed a significant result, rs(18) = 0.57, p = .009, ρ = 0.57. Spearman analysis was used in place of Pearson analysis to offset the outlier effect of Caltech, which is a top recipient of federal money but has less than 2,500 students. Caltech is excluded from the above scatter plot for visualization purposes but was included in calculations.

Academic prestige likely accounts for some of the correlation. Schools with excellent reputations are more likely to be hired by the government, and they also have access to premier investment opportunities that help their endowments grow at an impressive rate.

But the strength of the correlation suggests the existence of a “crowding out” effect that bilks taxpayers. When the federal government funds research projects at Harvard or Yale, those schools do not have to spend as much of their own funds on research or even overhead. They can instead avoid withdrawing money from their endowments. Those appreciating assets keep them among the richest institutions in the country even as they splash out for big administrative salaries, building upgrades, athletics, art galleries, and much more.

A wealthy individual would need to pay a 20% capital gains tax on realized gains from their long-term investments, but university endowments evade taxation because the schools are registered nonprofits.

For years endowment growth was completely tax free, but Trump has successfully put some taxes in effect. The 2017 Tax Cuts and Jobs Act required private colleges with more than $500,000 of endowment assets per student to pay a 1.4% tax on realized gains. The One Big Beautiful Bill Act of 2025 increased the tax to 8% for schools whose endowments are worth more than $2 million per student (Currently, that applies to Princeton, Yale and Stanford.)

Overhead Costs

Every university has a negotiated Facilities & Administrative rate with the federal government, typically ranging from 50-60%. That means for every $1 the government pays a school for direct scientific research, the school also gets 50 to 60 cents for overhead costs. Those expenses can include building construction and maintenance, water bills, janitors, accounting expenses, ethics and legal compliance expenses, Human Resources services, and even grant-writing costs. In a few cases, we’ve documented related wacky podcasts launched to complement research.

The National Association of Scholars estimated that in 2023 alone, the federal government spent $22 billion on overhead for both private and public universities. But there are no official figures disclosing exactly how much was spent and what the money paid for, even at public schools. (Read more: The Black Box of Overhead Spending in Academia).

Caltech, the top recipient of federal money over the last decade, has one of the highest overhead rates in the country at 70%.

The National Institutes of Health tried to cap all overhead rates at 15% in February 2025, but a court injunction quickly stopped the change after a group of universities and state officials sued. The injunction became a permanent ruling in April 2026.

Congress also rejected Trump’s attempts to cap overhead rates. A budget resolution that passed 26-3 in the Senate Appropriations Committee barred the NIH from changing how it calculates overhead.

Curiosity Killed The Cat

Research grants are a mixed bag in terms of taxpayer value. For every project focused on vaccine development or energy efficiency, there is another that studies the artistic expression of technical rock climbing or cultural resistance to bug-eating.

Open the Books identified hundreds of grants to elite schools from fiscal year 2025 of dubious merit. The majority were first awarded under the Biden administration, but they continued to receive funding last year. Examples include:

• Columbia University: $745,323 to study “the nature of curiosity itself … and of its direct consequences.” The researchers will test their hypothesis that “curiosity promotes learning.” (most recent funding action: April 2025)

• Harvard University: $2.5 million for “equitable and accessible research-based testing … to reduce the impacts of the warming climate on marginalized communities.” The study’s description explains that “climate change disproportionately affects individuals and communities that experience social and environmental vulnerabilities and discrimination.” (most recent funding action: March 2025)

  • $57,730 for “an intersectional approach to transgender and/or nonbinary (TNB) college student mental health.” The project will “categorize campuses into distinct classes of TNB-supportive policy environments” because “no quantitative studies of TNB college students have examined mental health outcomes across intersecting social positions of gender identity, race/ethnicity, and sex, a notable gap in mental health equity research.” (most recent funding action: July 2025).

• Cornell University: $5,500 to fund an open-access edition of Among Women Across Worlds: North Korea in the Global Cold War by Suzy Kim. The book uses a feminist perspective to evaluate how women “espousing communism” contributed to the spread of socialism and anti-colonialism as a method of liberation from patriarchy. (most recent funding action: February 2025)

• Johns Hopkins University: $3.9 million for “characterizing intersecting sexual, gender, and race-based stigmas affecting communities of U.S. transgender women and cisgender men who are sexually active with men.” (most recent funding action: September 2025).

• Duke University: $784,147 to build robots that mimic the movements of mantis shrimp, marketed with a software that helps “diverse undergraduates access research experiences in an equitable and transparent way” and helps “enhance access and equity for undergraduate research experience.” (most recent funding action: February 2026).

• Vanderbilt University: $115,696 for a project that “explores how developmental norms presumed to be generalizable are reproduced, challenged, and sometimes disrupted within scientific and activist communities.” The study “will generate new conceptual tools for understanding development in a non-Euro-American context” and “use critical theory in mainstream science, policy, and public debate.” (most recent funding action April: 2025)

Federal research money should fund scientific inquiry with a clear benefit to taxpayers. Congress and executive agencies should be more stringent with statutory award criteria and grantmaking decisions for universities that can more than afford their own operations. Funding physics and biology research is a government interest; buttressing huge endowments with ideologically-driven projects is not.

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