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The paper aims to help explain how certain smaller university endowments are able to provide investment results that are more typical of much larger endowments. Investment teams' characteristics and risk-reward perceptions are examined in relation to portfolio composition and performance.

This exploratory study uses a grounded-theory approach consisting of 20 in-depth interviews of financial officers at US colleges and universities with assets between $100 million and $200 million. Ten were conducted from the top performance quartile and ten from the bottom quartile. Interviews were transcribed and coded; afterward, emerging themes and constructs were identified. Objective investment performance over a ten-year period was employed from a well-known industry survey.

Top-performing endowments were described as having endowment teams with greater investment expertise, efficacy, decision-making independence and learning commitment than teams from the low-performing endowments. Teams from top-performing endowments assessed alternative investments more favorably and made greater portfolio allocations to them as compared to teams from low-performing endowments.

Because of the chosen research approach, the research results may not be generalizable.

The paper includes implications for colleges and universities in the management of their endowments, and particularly in the selection of committee and other team members.

The paper is original in exploring certain team characteristics and practices of institutional investment decision-makers and their relationship to portfolio composition and performance.

This paper examines the growth of private corporate influence in American higher education. A key question is corporate philanthropy and privatization at what cost? The terms often used in these discussions are commodification of the academy, privatization of a public good, or the increasing corporatization of higher education. Today, American universities are responding to the demands of the marketplace, as knowledge is being used as a form of venture capital and where professors have become academic entrepreneurs and students have become consumers. The foregoing is made more complex as an increasingly diverse student pool seeks access to postsecondary education, in the face of federal policies that serve to restrict access and financial support. A discussion of the collateral costs of our corporate culture as we face challenges to access, equity, and opportunity in America in the twenty-first century concludes this paper.

Fiscal support from endowments is a longstanding tradition in many institutions of higher education. The first known endowment in an American academic library resulted from a bequest of £500 from Thomas Hollis to the Harvard College Library in 1774. The number of endowments grew steadily in the 1800s, and by the turn of the century there were significant endowments in many libraries, including Yale, Columbia, the University of Pennsylvania, Brown, the University of Virginia, and the University of North Carolina. Some institutions came to be heavily dependent on trusts for library funding. Between 1928 and 1956, for example, endowment supplied the total budgetary allocation for acquisitions at the Dartmouth College Library. Similarly, as late as the early 1950s, all of the book funds for the Harvard College Library came from its endowment.

This study aims to predict the determinants of net income of 101 US university football programs.

Guided by stakeholder theory, financial capacity model and resource dependency theory, the dependent variable was net income (indicated as profit or loss) and independent variables were measured as the number of women and men’s team sports, average home attendances, win–loss records, conference ranking, endowment funds and age of football programs. Statistical analysis was performed using Kendell tau and binary logistic regression (BLR).

Net income was positively and statistically associated with home attendance, win–loss record, conference rankings and endowment funds, but not number of women’s sports, age of football program and number of men’s sports teams. The BLR indicated that home attendance was the best predictor of net income.

The research was delimited to 101 Football Bowl Subdivision football programs from public universities.

The findings indicate that home attendance and conference rankings had the highest association with net income, but the former was the best predictor of net income and not football tradition nor number of sports teams.

The study was pioneering in the predictive evaluation of the possible determinants of loss or profitability in college football programs.

The purpose of this article is to highlight the importance of waqf in financing higher education. Nowadays, higher education is costly and this has prevented students, especially those who are self-financed, from accessing such learning environments. This paper offer an alternative solution to relieve such a situation, namely, through the application of an endowment-based or waqf educational institution. The study suggests a way to establish an endowment university by concentrating the discussion on the concept and principles of its establishment, as well as sharing the experiences of the Malaysian waqf universities and the Turkish Foundation Universities/Vakif Üniversitesi in financing their universities using waqf, i.e. a pious endowment instrument.

The empirical data were mainly collected using in-depth interviews with the universities’ higher management authorities and some of the members of the board of trustees.

The findings show that the role of waqf or pious endowment is significant in providing financial assistance to their communities as well as strengthening their academic quality. In addition, tawhidic epistemology together with morality and ethics have influenced waqf donors or founders to donate their wealth and property to enrich and sustain universities and higher education.

This article provides the experiences of the Malaysian Waqf Universities and the Turkish Foundation Universities/Vakif Üniversitesi in financing their universities using waqf. It also contains some good examples from the experience of several earlier Islamic civilizations, in particular those of the Ottoman Empire and the Mamluk Sultanate of Egypt. In addition, examples of the implementation of waqf and endowment-based universities in the UK and USA as well as the Al-Azhar University of Egypt is also included.

The purpose of this paper is to investigate the strategic effects of academic institutional factors including environmental, social, and economic sustainability indices on the compensation of the president of an institution of higher education (IHE). The objective is to build relationships among variables to benchmark compensation measures for IHE presidents across US universities to proliferate sustainability initiatives. Some of the variables of the study were environmental sustainability, social sustainability, cost efficiency as a measure of economic sustainability, tenure, institutional control of the university such as public or private fundraising reputation, endowment and professor’s salary.

In total, 236 universities have been included in the study. The data for various dependent variables were studied to see the relationship between the independent and select dependent variables. The OLS regression approach was used to ascertain the relationships between the president’s salary, and a selected set of independent variables that includes the measures of sustainability.

The key findings of this study is that variables such as environmental sustainability, tenure, classification, endowment, and professor salary were significantly and positively associated with the IHE president’s salary.

The current study is limited to the IHEs within the USA. Thus, the study cannot be generalized or extrapolated to other countries or contexts or cultures.

The results of the study show that the trustees rarely use proliferation of sustainability as a criterion to compensate IHE presidents. The study concludes with the plea to trustees to benchmark sustainability across IHEs in evaluating and compensating IHE presidents.

This paper extends the compensation study of IHE presidents to include environment, social, and economic dimensions of sustainability. These variables are important in this age where IHEs have been challenged to do more to make our planet sustainable.

This research uses the social science perspectives of institutions, ecological modernization and social movements to analyze the rationale used by the early-adopting universities of fossil fuel divestment in the USA.

Through analysis of qualitative data from interviews with key actors at the universities that divested their endowments from fossil fuels, the paper examines how institutions navigate competing logics and frame their rationale.

The results show that while many institutions relied on ecological values embedded in their missions to justify their decision to divest, many also continued to embrace an altered version of market logic.

This research is primarily limited by its small population size. If the number of adoptees increases in the future, quantitative analysis should look for statistically robust trends.

The implications of this research are that we can expect more universities to commit to divesting from fossil fuels if their mission statements provide them with cultural material to rationalize the decision, but also expect them to couch the decision in continued goals and concerns for fiduciary responsibility and the subsequent growth of their endowment.

Social actors engaged in the fossil fuel divestment campaign may take this research and conclude that they need to build their arguments around the existing institutional logics and cultural identity.

This paper contributes original primary data documenting how institutional actors confront dominant logics using both a mixture of internal cultural identity and the reframing of the legitimated market logics.

To examine the relationship between financial resources and variables associated with institutional rankings in the USA.

Pearson product moment correlation coefficient was used to investigate the relationship between endowment funds and variables associated with rankings as determined by the U.S. News & World Report.

College costs continue to increase faster than per capita income. Institutions are relying more on endowment funds to meet their needs. Endowment was positively associated with almost all the variables used for ranking top national doctoral universities with the largest endowment amounts. When endowment per student was used, the association became even stronger with these ranking variables. Endowment was weakly associated with almost all the variables used for ranking top national doctoral universities with the lowest endowment amounts. Relationships of endowment and ranking variables were stronger at medical research schools, business schools, and weaker at engineering schools.

Higher education administrators must realize that these variables are cost‐inducing factors that cannot be fully satisfied. Unbridled pursuit of ranking variables will increase cost without commensurate increase in educational quality. Therefore, leaders must decide what rankings their resources allow and what position within the ranks is acceptable to them. Ranking agencies interested in quality should realize that money plays a significant role in how an institution is ranked. Therefore, institutions should be grouped according to the available resources before comparative analysis of ranking variables is made.

My study examines the pay-for-performance relationship surrounding executive compensation in higher education. There has been much criticism of the rising levels of university presidential pay, particularly in the public sector, citing it is pay without performance. Public colleges and universities are funded by taxpayers; therefore, their expenditures are even more heavily scrutinized than private institutions. Many feel that university executives are overpaid and are not delivering a return in the form of enhanced institutional performance to their investors, the public. Growing student debt only adds intensity to the outcry against heightened compensation. Proponents of the increasing pay levels contend that the ever-changing role of the university president and competition in the marketplace for talent warrants such compensation. Using data obtained from The Chronicle of Higher Education and Integrated Postsecondary Education System websites, I find a highly significant and positive relationship between compensation for executives at four-year public institutions and both the levels of university endowment and enrollment. These results support the pay-for-performance debate. In contrast, results for other performance measures, scholarships and graduation rates, do not support the debate. My study contributes to the literature examining pay-for-performance in higher education with an empirical analysis examining the institutional determinants of executive compensation for public colleges and universities.

Alice Handy, an investment professional with 30 years' experience as head of the University of Virginia Investment Management Company, has opened a new asset management firm targeted at midsize endowments and nonprofit institutions in January 2004. Her business, Investure, LLC, offered outsourced investment services to institutions with $150 million to $1 billion in assets and access to top-performing managers at lower cost than a fund of funds (FoF). Smith College, a prestigious liberal arts college with a nearly $1 billion endowment, is interested in increasing its current allocation to private equity. Handy and her partner are preparing to meet with Smith's trustees in an attempt to win Smith College as Investure's first client. The case presents three different approaches to private equity investing: direct investment through a traditional limited partnership, investment through a FoF, or investment through Investure's outsourced model. The class discussion presents an opportunity to evaluate advantages and shortcomings of each approach, introduce key terminology, and discuss the current trends in the private equity market. Students are given the cash inflows and outflows for a representative investment in a venture capital fund of the type Handy hopes to invest in on behalf of Smith College. The main analytical task requires students to evaluate the expected gross and net returns generated by the representative investment under each of the different approaches and fee structures.

This case was written for an early class in courses on entrepreneurial finance, venture capital, or private equity. It can also be used in specialized courses for fund trustees interested in alternative assets.