President Biden and congressional Democrats seem determined to raise taxes on the rich, especially the rate paid on capital gains. If they’re really serious about this, there’s one sector of American wealth that is undertaxed even by today’s standards: universities and foundations.
The amount of wealth held by major colleges and large grant-making foundations is astounding. The National Association of College and University Business Officers’ annual study found that 107 institutions held endowments of $1 billion or more as of June 30, 2019. Together, these institutions of higher earning held $494 billion in assets, or roughly a tenth of the total net worth of all individual billionaires in the United States combined. The university figure is surely much higher today.
Charitable foundations hold even more wealth. One estimate found they held more than $1 trillionin assets in 2017, with the richest five alone holding nearly $100 billion between them. Given that the stock market has risen more than 50 percent since then, their portfolios should be hundreds of billions of dollars richer. That means America’s charitable foundations and billionaire universities hold at least $1.5 trillion in assets. That’s far more wealth than that of Jeff Bezos, Bill Gates, Mark Zuckerberg, Elon Musk and the founders of Google and Oracle combined.