A very timely article in the Chronicle of Higher Ed discussing endowment spending today. Do universities “spend enough of their endowments for society’s benefit to justify the tax exemption they get”? Senator Charles Grassley is pushing for legislation requiring universities to spend a minimum 5% of their endowment income annually. His solution is a one-size-fits-all answer to a complex situation that has evolved over many years.
The Libraries benefit from a modest but growing number of endowments. But is our endowment portfolio big enough to continue to support the increasing costs of growing and maintaining world-class collections? Not by a long shot. Endowments for collection enhancement, electronic resources, and preservation activities play a key role in maintaining an academic library’s pivotal place in the lives of students, faculty, and researchers.
It isn’t all about the size of the endowment. In the case of the Libraries, and for many other academic libraries in the US, the endowment’s specific spending guidelines can have a huge impact. Imagine having $175,000 in your pocket, courtesy of Uncle Bob…. but he’s made it clear you must only spend it on 8-track tapes. Not a problem if you’re still living in the 70s, but today….not so easy.
Our Libraries have a few endowments created decades ago with guidelines that restrict spending to print-only materials. Meanwhile, the demand for electronic scholarly publications and digital collections continues to swell. A librarian’s 8-track dilemma, for sure.
For those of us who write endowments, one challenge is balancing the wishes of the donor against the needs of the institution, while keeping in mind that no one really uses eight-tracks any more.