Brown’s endowment saw an 11.9% return on investment in fiscal year 2025, surpassing last year’s returns of 11.3% and generating $853 million in investment gains, according to a Friday news release from the University.
As of June 30, the endowment’s market value is $8 billion, a record valuation for the University, and an 11% increase from its valuation at $7.2 billion last year.
The endowment provided an all-time high of $352 million to Brown’s operating budget, or 23% of its total revenue, during fiscal year 2025 to support financial aid, scientific research and professorships, among other “strategic priorities.” This contribution marked an increase of 25% from fiscal year 2024.
The contribution to the University’s budget, which accounts for over $35,000 per student annually, contributes “in ways that enrich the educational environment at Brown,” Joshua Kennedy ’97, deputy chief investment officer, wrote in an email to The Herald. “We at Brown are exceptionally fortunate to benefit from this resource.”
Each year, the Brown Corporation — the University’s highest governing body — votes on the percentage of the endowment that the University can spend as part of its operating budget. This percentage is usually confined to a range of 4.5% to 5.5% of the endowment’s current value.
This year, the University spent a maximum of 5.5%, according to Kennedy. This decision is not “primarily” related to the amount of returns on the endowment, and has more to do with “the institution's financial circumstances and the need to balance today's funding needs against future funding needs,” he added.
Despite “extraordinary volatility” in the stock market due to tariffs implemented by the federal government, Brown had a “third consecutive year of strong returns in the stock market,” Kennedy added.
“Brown’s investment managers that focus on stocks were able to outperform broad stock indexes, and were the primary driver of this year’s returns,” he added.
The highest portion — 35% — of the endowment’s annual contributions to the University’s operating budget is designated for financial aid expenditures.
This year, the University also received $133 million in “new endowed gifts,” as well as $200 million from Brown University Health — through the University’s expanded affiliation agreements with the health system.
The funds received from gifts will be “added to the endowment and invested so that they continue to aid Brown’s educational mission perpetually,” Kennedy explained.
The endowment consists of donations made by alums, parents, students and other individuals for a specific purpose, which are then invested to allow the original gift to grow in value. Brown’s endowment consists of close to 4,000 individual endowed funds.
Since President Christina Paxson P’19 P’MD’20 took office in 2012, the endowment has brought $6.6 billion in investment returns and contributed $2.8 billion to aid the University’s operating budget, according to data from the University’s Investment Office.
Brown ranks in the top quartile for investment returns among peer institutions “managing more than $1 billion in investments,” according to the news release, which cites data compiled by Cambridge Associates.
This indicates that “Brown’s investment program is succeeding in its primary goal of prudently growing the endowment's impact on Brown's mission of scholarship and research,” Kennedy wrote.
Harvard also reported an 11.9% return on endowment investment for this year, while Penn surpassed both Brown and Harvard with a 12.2% return on investments. The other five Ivy League institutions have yet to disclose their endowment returns for fiscal year 2025.
The Investment Office’s strategy is focused on long-term returns that ensures the endurance and resilience of the endowment, Brown Vice President and Chief Investment Officer Jane Dietze explained in the news release.
The endowment’s returns have supported many of the University’s priorities in a moment when funding sources for higher education institutions remain at risk, the release added.
In the past year, Brown has taken out $800 million in loans amid the Trump administration’s threats to the University’s federal funding. In July, the University announced that it had reached a resolution with the federal government to restore some federal research funds.
The “One Big Beautiful Bill Act” also recently established a new endowment tax policy that increases taxes on private universities with large endowment values in proportion to the number of enrolled students.
Brown’s current endowment ratio puts the University in the 1.4% endowment tax bracket, Provost Francis Doyle explained at an Oct. 8 faculty meeting. If the endowment were to rise to above $750,000 per student, Brown would be required to pay a 4% endowment tax.
Roma Shah is a senior staff writer covering University Hall and higher education. She's a freshman from Morgan Hill, CA and studies Neuroscience. In her free time, she can be found doing puzzles, hiking or curled up with a book.
Samah Hamid is a senior staff writer at the Herald. She is from Sharon, Massachusetts and plans to concentrate in Biology. In her free time, you can find her taking a nap, reading, or baking a sweet treat.
