Objects of Envy

Sometimes it is hard to figure out why the top US universities attract so much attention, so much discussion and so much longing. A lot of Australian commentators have a thing for them. UWA DVC Donald Markwell certainly did in his book A Large and Liberal Education, former UoM VC Alan Gilbert did if John Cain and John Hewitt are to be believed in Off Course: From Public Place to Market Place at Melbourne University. So today, I picked up a copy of The Age and on the front cover is 'Homeless Crisis at Top University'.

"She [Denise Bradley] revealed the push [to overhaul Youth Allowance and Austudy] as the vice-chancellor of Melbourne University, Glyn Davis, said 440 students were in effect homeless, "hot-bedding" with relatives or friends because they could not afford their own residence.
...
But federal Education Minister Julia Gillard said yesterday the Government was unlikely to change HECS, despite calls, including from its architect, Bruce Chapman, for a rethink."

So, after reading that and being rather disappointed by the lack of review for HECS, I got home and opened my RSS feed. The Harvard Crimson reports, 'Harvard Endowment Posts 9 Percent Return in 10 Months'. I'm not an economist, but 9% in 10 months looks pretty impressive to me. What does this mean?

"Harvard's endowment posted returns of approximately 9 percent through the first 10 months of this fiscal year, according to data from the University. The increase puts the endowment's value at around $38 billion as of this April, up from $34.9 billion as of last June."

Ok, so they made an extra 3.1 billion USD in 10 months, just from investment, not operation, just investment. What is UoM's annual turnover? Well, the 2007 Annual Report (pdf, 8.1mb) tells us that for the year ended 31 December, 2007, operating income was $1.433 billion (AUD of course) and the operating surplus was $96.246 million after tax. So there we have it in simple numbers. Top US universities are making more money from investments than top Australian universities are making in operations for an entire year. It is no wonder that those US universities are envied.