Do Endowments Have an Impact on a College’s Ranking?

Despite what some think, the size of a school’s endowment is a nonfactor.

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The National Association of College and University Business Officers just released its annual study of the latest trends in college endowments 2009 NACUBO-Commonfund Study of Endowments . This was not a very good year for the performance of college endowments. According to the NACUBO study, the endowments of the 842 institutions that were surveyed had an average decline of 18.7 percent in the year ended June 30, 2009. In certain circumstances, a steep decline in a college's endowment can have a negative impact on the school's budget.

What role does the size of a college's endowment or the annual performance of a college's endowment play in the methodology that is used to calculate the U.S. News America's Best Colleges rankings? The absolute size and the annual performance of a college's endowment are not factors in the college rankings. In fact, college endowments are not used in the rankings at all.