Tuition, fees and room and board are almost $61,000 for the 2016-2017 school year, according to Grinnell’s website.
Buffett was the architect of Grinnell’s endowment growth, George Drake, who was president of Grinnell during a portion of Buffett’s tenure as a trustee, said in an e-mail. “None of this would be possible without the large endowment built by Warren Buffett and his close friend and mentor, Joe Rosenfield.”
The wealthiest colleges have come under scrutiny for their record endowment values. Two congressional committees sent inquiries to the 56 richest private schools, including Grinnell, with questions ranging from their financial aid spending to how much they pay to manage their funds. Grinnell is especially dependent on the endowment, as more than half the operating budget comes from annual returns.
Big Numbers
“When you read the figures on endowment of the big schools, and some of them have really gotten up in the big numbers, the main objective of the people running the endowment is to have the endowment grow larger, and that will be ever thus,” Buffett said at the meeting.
Grinnell posted a 1 percent investment gain on its endowment in fiscal 2015, one of the worst performers among funds with at least $1 billion in assets. The small gain was in contrast to previous year, when the endowment returned 20.4 percent.
For fiscal 2015, the total value of the fund declined 2 percent as the college tapped the endowment for operating expenses. Grinnell was among at least a dozen schools in the 2015 fiscal year whose endowments spent more than they earned, including Duke University and Pomona College.
“If we only made payouts in positive years that produced over 4 percent returns, then we would only expect to make payouts every two-thirds of the time,” Lacher said.