The 2025 Endowment Radar Study reveals a widening divide: well-endowed institutions have more capacity to deliver their mission, while those with smaller endowments face growing financial vulnerability.

A recent Cambridge Associates survey of 104 endowments and foundations reveals that most institutions are adhering to their endowment spending policies, with 80% following policy in 2025 and 81% expected to do so in 2026.

Endowment spending is a dependable source of revenue that pays for teaching and research and reduces reliance on student fees and annual fundraising appeals. In 2025, this sustainable business model faces intense headwinds that threaten to destabilize the financial equation.

Higher costs and higher rates of endowment spending are the major story lines of the 2023 Endowment Radar Study. Over the past year, the endowment provided a stable source of funding to for the growing costs of private college and university business model.

Inflation is having a moment—driving up the costs of delivering the nonprofit mission and making it more challenging to maintain endowment purchasing power. This environment highlights the importance of endowment spending policies and their role in balancing near-term spending needs and intergenerational equity.