Swarthmore’s endowment grew by 9.5% during the 2024-25 fiscal year that ended on June 30, 2025. According to Swarthmore’s Investment Office, the return brought the fund’s value to $2.843 billion. This figure simplifies to a per-student endowment of $1.677 million for the Fall 2025 semester, when the college’s total enrollment was 1,695 students.
The 9.5% return amounts to around $247 million in value added during the fiscal year. However, when a 2025 higher-education-specific estimated inflation adjustment of around -3.75% is applied, the returns drop to 5.75%, yielding approximately $149 million in added value. The adjuster is the Commonfund Higher Education Price Index (HEPI), which tracks the inflation rate for a bundle of goods and services that colleges and universities likely use, rather than the inflation rate for the entire economy.
“Unlike the Consumer Price Index (CPI), which tracks household costs, HEPI reflects the expenses institutions actually face, such as salaries, benefits, utilities, and technology. It tends to run slightly higher than economic inflation tracked by CPI,” Frank Grunseich, chief investment officer for the college, told The Phoenix in an email.
As part of Swarthmore’s 2025-26 operating budget, the college is spending $130 million from the endowment to complement $85 million in tuition revenues and $12 million in other revenue. Therefore, spending from the endowment supports 60% of Swarthmore’s operating budget, a much larger share than most peer schools see. The $130 million in endowment spending also amounts to 4.57% of the endowment, a rate higher than the college’s yearly endowment spending target of 4.25%.
A graphic (updated only through the 24-25 budget) showing the yearly percentage of Swarthmore’s endowment that the college has put towards operating expenses over time. Courtesy of Rob Goldberg.
At an “Endowment 101” event hosted by the Student Government Organization (SGO) in September, Vice President of Finance and Administration Rob Goldberg discussed this target. He acknowledged that, while a large portion of Swarthmore’s budget comes from the endowment, the target the college sets for how much of the endowment to spend each year was on the “conservative side,” relative to peer institutions. However, Goldberg argued that the target ensured the college committed only to programming that it was confident it could consistently maintain. The Pennsylvania Principal and Income Act mandates that nonprofit endowments spend between 2% and 7% of their funds each year.
“[The large portion of the college’s budget coming from the endowment] makes for a complicated dual mandate with needs that are sometimes at odds with each other — stable yield for today, and meaningful growth for tomorrow,” Grunseich wrote.
The Investment Office has an annual target to spend 4.25% of the endowment, which is added to the HEPI to set a target for the endowment’s yearly growth. This year, HEPI+4.25% was 8.0%, meaning the college’s 9.5% return surpassed its growth target, as it has over the past five and ten years when asset growth and benchmarks over those multi-year periods are annualized into per-year rates.
However, this year’s return comes after a shakier three-year period, with HEPI+4.25% equal to 7.9% over those last three years and an average yearly endowment growth rate of only 6.5%. In 2023-24, the endowment returned only 5.8%; in 2022-23, only 4.2%; and in 2021-22, it saw a loss of 2.9%. These lackluster returns were somewhat buoyed, however, by a shocking 44% return in 2020-21, when the stock market soared as it recovered from the pandemic. Relative to peer institutions, classified by the Investment Office as including other schools with endowments over $1 billion, “our last three years are somewhat under the median, but our ten-year record is strong,” Grunseich said.
The stronger performance in 2024-25 is largely due to high returns from the college’s private equity investments, which amount to around one-third of its assets. The college has bolstered its private equity portfolio in recent years, though some students have challenged the economic consequences of those holdings.
These high returns come as many academics and advocates question whether private equity plays an outsized and extractive role in the modern economy. Just miles from Swarthmore, Crozer Chester Medical Center closed in 2025 at the hands of private-equity-backed Prospect Medical Holdings, Inc., eliminating a crucial local resource and bringing the debate over private equity’s control close to campus.
While the college’s endowment performed stronger than in previous years, there were no large shifts in its management that caused 2024-25 to be a stronger year for the fund. “In terms of policy, we expect changes to be evolutionary rather than dramatic. The sheer complexity of the endowment means that quick, dramatic changes are difficult, if not impossible,” Grunseich added.
The fact that spending from Swarthmore’s endowment continues to fund a strong majority (regularly over 55%) of the college’s operating budget means that its fund management priorities might differ slightly from those of other top college endowments. Because the college has substantially increased its financial aid provision in recent years and is an undergraduate institution with relatively little research funding, the endowment’s immediate obligation is larger.
“Many of our peers can really focus on the growth component and think only about the destination, while we have to focus on the path and the potential downside, as well,” highlighting the stronger short-term obligations that arise for the fund due to Swarthmore’s lower reliance on tuition revenue and smaller alumni base from which to fundraise. “I see the comparison to peers becoming less relevant over time,” Grunseich reflected.
A graphic showing how the revenue sources for the college’s yearly operating budget have changed over time. Courtesy of Rob Goldberg.
While early drafts of the federal One Big Beautiful Bill Act (OBBBA) threatened to dramatically increase the tax on endowment returns for schools with high endowment-per-student ratios like Swarthmore, the college joined a national coalition of 24 similar institutions (all of which fund large parts of their regular budgets from their endowments) in lobbying the U.S. Congress against such a tax.
Whether due to lobbying, external considerations, or both, the coalition emerged successful — the final legislation included an exemption for schools with fewer than 3,000 students. This exemption not only allowed Swarthmore to avoid the OBBBA’s tax hikes but also eliminated the 1.4% tax the college began paying on endowment returns under federal Republicans’ 2017 Tax Cuts and Jobs Act, which will save between $2 and 6 million per year (depending on that year’s returns).
Still, however, Swarthmore’s administration has entered a somewhat more austere period.
“We should expect to operate in a period of greater fiscal restraint than we have in recent years,” President Val Smith wrote in a message to the community in December, arguing that the college had covered rising expenses by drawing from reserves for too long. So far, this fiscal restraint has manifested as higher premium rates for faculty and staff to pay toward their health insurance and a $500,000 decrease in departmental expenses across campus. These stricter financial measures are a developing story.
“Our ultimate ‘north star’ is the delivery of consistent inflation-adjusted returns to support the college’s incredible mission while ensuring that the endowment will provide that same level of support generations from now. That is where we focus all of our energy,” Grunseich closed.
Those returns aren’t that high. They performed worse than my Vanguard index fund over the same period. For the last 10 years, the ROIs on Swarthmore’s endowment and my index fund are virtually identical.
And we don’t need to look at just me and my index fund that anyone with an investment account can purchase. We can look at Berea College. Berea spends over 74% of its investment returns on its operating expenses, blowing Swarthmore’s “over 55%” out of the water. What’s more, if we visit CollegeNET’s social mobility rankings (https://www.socialmobilityindex.org) and filter for average debt, we find Berea’s are the lowest on the list, about 80% lower than Swarthmore’s. This endowment spending is being used by Berea to directly invest in students and defray the expense of college.
And how does Berea do it? Do they have expensive fund managers like Bowdoin, whose top four highest-paid college employees are all investment officers? (https://projects.propublica.org/nonprofits/organizations/10215213). No they do not. They outsource it to an investment company and the plurality of their investments (about 40%) are index funds.
This is not rocket science. Private equity is a gigantic wealth concentration mechanism that is happy to devour anything–be it hospitals, 10% of the US rental market, New Mexico’s entire renewable energy industry, or every institute of higher learning in the US–and does not exist to help you or me (well, maybe some of you, since elite colleges are turning more and more into funnels for private equity and finance more broadly). It exists purely to further enrich the rich. The Chief Investment Officer at Bowdoin is banking nearly $2 million/year; the CIO at Yale is pulling in $4.5 million/year. Princeton? $14.5 million. Harvard, you ask? $14.6 million. At Berea they have a VP of finance who makes $240k/year, and yet somehow students there are able to graduate with the lowest debt load of any college in the country.
We can see clearly which way Swarthmore is trending with the endowment apologia coming from the administration, the wholesale submission of Quaker values to market value, and the board being increasingly composed of and lead by people with ties to private equity. Maybe we should simplify everything, dispense with the charade, and rename Swarthmore College to Private Equity College.
In short, as Debord pointed out, “Structures are the progeny of power that is in place.”
“Ben (Legendary),” your comment reads truly as legendary. I know of Berea, and while Swarthmore can never be Berea, I do think its model and example is admirable in many ways. Certainly, it is a good one to cite when chastening Swat’s drift from its Quaker origins given the great impact they have as an engine of social mobility and transformation. And you’re clear-eyed enough to acknowledge that what may be happening at Swat is not full-throated rejection of that venerable Quaker heritage, but rather, a gradual drift (or that’s my read of “trending,” anyway) that can still be rectified. I do hope that we can reinscribe some of the best of our Quaker values for the eras ahead, and that our most honorable and inspiring values bear out in the way Swarthmore plays the long game. Thank you for the observations–grateful for your take. Truly!
Thanks, Yoshi@ I’m a member of Chester Meeting, related to old Quaker family of Willits. I AGREE with your hope… I am not impressed with any reaction to finances which solely looks at funds acquired without the understanding of the results of those investments. My mother, grad of 1942 – part of the class that leaned on Swarthmore to finally admit an African American student – would be horrified that Swat may be relying on funds that grow from fossil fuel development, from funding Israeli bonds in this current time of clear oppressive actions (and with plenty of funds coming from the US) … I ‘m hoping that neither is the case.. I think the drift is one I have come to notice; mom passed in 2015, had not noticed it then…. maybe it will change…..