Princeton endowment earns 5.6% return; continues to support financial aid, COVID-19 testing and daily University operations

Princeton University's endowment earned a 5.6% investment gain for the fiscal year that ended June 30, 2020. The endowment value stood at $26.6 billion.

The endowment is the financial foundation that underpins the University’s teaching and research mission and supports its exceptional financial aid program, which enables students from all backgrounds to live and learn at the University without incurring debt. In April, Princeton’s trustees reaffirmed the University’s commitment to affordability despite the economic challenges created by the COVID-19 pandemic.  

The average annual return on the University’s endowment for the past decade is 10.6%, which places Princeton among the top percentile of 433 institutions listed by the Wilshire Trust Universe Comparison Service.

The Princeton University Investment Co. (PRINCO), the University office that manages the endowment, certified the results during a meeting of its directors on Oct. 15.

“Princeton has been fortunate to face the many financial challenges created by the COVID-19 pandemic from a strong budgetary position, thanks in part to an endowment that is the result of generations of generosity from alumni and friends, as well as effective stewardship and investment by the trustees and PRINCO,” Provost Deborah Prentice said.

“The endowment will continue to be a crucial tool as we pursue our four key priorities in these challenging times: ensuring the health and well-being of our students, faculty and staff; restoring our teaching and research activities to normal operations, safely but as soon as possible; sustaining our commitments to access and affordability; and retaining and supporting our talented workforce.”

The endowment is made up of more than 4,000 funds that have been established since the University’s founding in 1746. Endowment payout and other investment income funds more than 60% of the University’s operating budget.

The endowment supports the scholarship, teaching and research of Princeton’s outstanding faculty. The University has more than 200 endowed professorships honoring the most distinguished professors. Many endowed professorships were given by alumni to further the intellectual pursuits of faculty and to broaden University research into new areas of discovery that benefit human society.

The endowment also supports classrooms, laboratories, libraries and academic programs, as well as campus life priorities including athletics and religious life.

In addition to supporting daily operations, the endowment is set up to sustain the University for many decades to come, through periods of economic growth as well as through downturns and recessions.

During the COVID-19 pandemic, the endowment has helped ensure that the University can continue to make important investments, including financial aid to meet the rising need of students; tools and infrastructure to support online teaching; and a robust testing program to help protect the health of the campus and broader communities.

Endowment funds cover well over 80% of the undergraduate aid budget, which have aided the University’s efforts to increase the socioeconomic diversity of the student body. For example, 24% of the incoming Class of 2023 received Pell grants, up from 7.2% for the first-year Class of 2008.

Typically, Princeton students from families with the U.S. median household income of $65,000 pay no tuition and their average grant also covers room, board and fees. For the Class of 2023, 100% of families making up to $180,000 per year qualified for financial aid. Aid extends above that income level, and students from families with incomes above $250,000 may qualify for some aid.

The endowment also supports graduate students and their research. All Ph.D. students are fully funded for the entirety of their regular program length, and the majority of master's programs are funded, either partially or fully.