Donald Frey (Wake Forest University, Economics Professor)  and Lynn Munson (formerly, National Endowment for the Humanities) wrote an op-ed piece in today’s Boston Globe challenging the conventional wisdom of eternal saving and endowment growth. They make the case that colleges and universities would make better more effective use of endowment monies by committing to spending more- putting the money to use.

They assert that the rainy day has arrived:

“Since colleges and universities pay no taxes on their endowments or on the income they earn, the public has a keen interest in knowing whether schools are adopting payout policies that make sense. The rainy day so many colleges and universities have saved for is here. The question is whether these institutions will have the wisdom to step up spending in response.”

This argument means little to most boarding schools with modest endowments. However, for the extraordinarily well-endowed boarding schools, it’s perhaps fair to ask, “how can the endowment be put the best use during tight times” and “might we consider spending endowment monies differently in future prosperity?”

I’ve included this link to an earlier New York Times article for background reading of large boarding school endowments.