Key Takeaways
- • Penn's endowment returned 12.2% for fiscal year 2025, growing from $22.3 billion to a record $24.8 billion, according to The Daily Pennsylvanian.
- • The FY25 return improved on the 7.1% return recorded in 2024 and coincided with a 13% rise in the S&P 500 over the same period.
- • Penn's annualized five-year return stands at 11.4% and its 10-year return at 9.2%, per the University's Office of Investments.
- • The endowment supplied about $1.12 billion in budgetary support in FY25, with spending up roughly $61 million from the $1.06 billion spent in FY24.
- • Penn faces a 4% federal excise tax on endowment income starting July 1, 2026, which University officials warn could curb financial aid, research, and capital growth.
Summary
Penn's endowment rose 12.2% in fiscal year 2025, increasing from $22.3 billion to $24.8 billion, a record for the fund, according to The Daily Pennsylvanian. The result marks a substantial improvement over the 7.1% return recorded in 2024 and continues what the University's Office of Investments describes as steady performance since 2022. Over longer horizons, the endowment posted an annualized five-year return of 11.4% and a 10-year return of 9.2%. The FY25 gain also compared favorably with the S&P 500, which rose 13% over the same period.
The fund spans more than 8,900 individual endowments and provided about $1.12 billion in annual budgetary support for the University during FY25. Spending from the endowment rose by nearly $61 million from FY24, when the University spent $1.06 billion, supporting scholarships, faculty positions, research, and health system operations.
Penn ranks seventh among U.S. endowments by size, behind Harvard, the University of Texas System, Yale, Stanford, Princeton, and MIT. Penn's FY25 returns exceeded those of Princeton and Yale but trailed MIT, Stanford, and the University of Michigan.
Looking ahead, Penn is expected to face a 4% federal excise tax on endowment income beginning July 1, 2026. University officials have warned the levy could significantly hinder its ability to support student financial aid, faculty research, and capital growth. The tax bracket applies to schools with a student-adjusted endowment between $750,000 and $2 million, and Penn's current endowment tax derives from the 2017 Tax Cuts and Jobs Act, which imposed a 1.4% excise tax on private universities with endowments above $500,000 per student.
The fund spans more than 8,900 individual endowments and provided about $1.12 billion in annual budgetary support for the University during FY25. Spending from the endowment rose by nearly $61 million from FY24, when the University spent $1.06 billion, supporting scholarships, faculty positions, research, and health system operations.
Penn ranks seventh among U.S. endowments by size, behind Harvard, the University of Texas System, Yale, Stanford, Princeton, and MIT. Penn's FY25 returns exceeded those of Princeton and Yale but trailed MIT, Stanford, and the University of Michigan.
Looking ahead, Penn is expected to face a 4% federal excise tax on endowment income beginning July 1, 2026. University officials have warned the levy could significantly hinder its ability to support student financial aid, faculty research, and capital growth. The tax bracket applies to schools with a student-adjusted endowment between $750,000 and $2 million, and Penn's current endowment tax derives from the 2017 Tax Cuts and Jobs Act, which imposed a 1.4% excise tax on private universities with endowments above $500,000 per student.
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