| Universities don't generate their operating budget on tuition alone. They need to use a mix of grantmaking, IP commercialization, investments, Federal tuition support, broadcast licenses, and (in UMich's case) some state government support to keep the lights on. In UMich's case, the State of Michigan only covers 3% of the entire funding for UMich. The university needs to foot the bill for the remaining 97% on their own [0]. That's where endowments come in. By trying to be savvy with the rate of return on your endowment, you can create a self sustaining budget for your institution. Also, UMich Ann Arbor's yearly budget is $10 Billion, but their endowment (aka their piggybank) is only $17 Billion. If they raided their piggybank, they could only keep the lights on for 2 years at most. > professional sports organization or the vestigial academic departments Professional Sports is self funded by the athletics department. What's a "vestigial academic departments". For example, Computer Science was "vestigial" in most universities until the 1970s, often being a wonky major in the Math or Physics department. What makes you an arbitrator for what field is more important than others? [0] - https://publicaffairs.vpcomm.umich.edu/key-issues/tuition/ge... |