Reporting on the performance of the Princeton endowment (On the Campus, December issue), we are told that “Princeton’s results landed in the middle among Ivy League institutions.” Like that’s an OK situation? A more accurate description might be that “Princeton was the best of the worst — 5th out of 8.” The average Ivy return was 6.25 percent, but Princeton’s was just 5.6 percent. The top four (Brown, Dartmouth, Harvard, and Yale) averaged 8.45 percent.
Let’s see … had Princeton earned only the Ivy average, the additional income would have amounted to some $170 million. That’s serious money. And if Princeton had earned the top four’s 8.45 percent average that would have resulted in an additional $480 million. Now we’re talking really serious money.
So, the return was “positive” only in the sense that money wasn’t lost. Depending on the grading system used, actual performance was, if pass/fail, definitely a fail; or if the now standard A through F system, maybe a D. In 1957 at Princeton, it would have been a 5, or perhaps a very generous 4-minus.