Yale’s endowment grew by 26.3 percent last fiscal year, reaching $54.5 billion — a windfall that has some local leaders asking whether the university should do more for its cash-strapped host city. The endowment’s return, announced Tuesday, amounted to $11.3 billion in investment gains, Ya le’s largest since 2021. It comes months after Yale agreed to raise its annual voluntary payment to New Haven by roughly $5 million, bringing the university’s total such contribution to the city to around $30 million each year. That deal was struck as the university braced for a steep increase in the federal tax on its endowment. “It means that the institution is healthy; its future is strong,” Westville Alder Adam Marchand, who chairs the Board of Alders Finance Committee, told the Independent in a phone interview Thursday. “But it certainly begs the question about should Yale be contributing more to the city and its budget and its community, because they have a strong position to do that.” In a message to faculty and staff on Tuesday, Yale Provost Scott Strobel, Senior Vice President for Operations Geoff Chatas, and Chief Financial Officer Katrina Spencer said the university will phase the gains into its operating budget gradually over five years, starting with the fiscal year that begins in July 2027. About three-quarters of the endowment is legally restricted to specific purposes, they wrote, and the federal endowment tax — which rose from 1.4 percent to 8 percent this year — will cost Yale about $350 million annually. Those tax dollars, they wrote, “would have otherwise supported students, faculty, staff, and local partnerships.” The university administrators listed “strengthening ties to New Haven” among the university’s priorities for the new money, citing Yale’s pledge to raise its total voluntary contribution to the city to more than $230 million through fiscal year 2033. That pledge stems from a deal Mayor Justin Elicker and Yale President Maurie McInnis announced in March, which brings Yale’s annual payment to about $30 million, rising to about $34 million by 2033. “We’re increasing our voluntary payments as the federal tax on our endowment is rising,” McInnis said at the time. Meanwhile, New Haven ended its last fiscal year with an $8.5 million operating deficit driven largely by the public schools. Asked whether he would ask Yale for more in light of the endowment return, Elicker said he would honor the March agreement, noting that Yale’s payment has grown from $13 million a year to $30 million in seven years — the most any university pays its host city, he said. “I’m gonna stick by that agreement,” Elicker said. “That being said, I’m always eager to find ways, more ways that Yale can help support the city.” He added that Yale has “demonstrated that they follow through on what they say they’re going to do,” and said he expects the university to keep its commitments, “in particular with such good news about their endowment.” Marchand said he’d like the city to think bigger. Closing the $8.5 million deficit would be welcome, he said, but he’d rather see Yale make investments of “tens of millions of dollars” in the city’s schools, housing, and other needs. “I would encourage us to be thinking bigger,” he said. Yale’s current payment is “a meaningful amount,” Marchand said, “but it’s a fraction” of the city’s general fund budget of more than $700 million. By comparison, Yale’s investment gains last year — $11.3 billion — were more than 15 times the city’s entire general fund budget. Yale’s roughly $30 million annual payment to the city amounts to about a quarter of 1 percent of that one-year gain. Asked whether Yale’s contributions should be required by law rather than voluntary, Marchand pointed to the state legislature, which has previously examined Yale’s tax exemption. He said the exemption goes beyond the traditional exemption for universities, especially for mixed-use properties, and that the issue could come up in the 2027 legislative session. “What kind of exemption is appropriate for an institution of the wealth and prestige of Yale?” he asked. The return also arrives as Yale negotiates new contracts with its clerical and technical workers in Local 34 and its service and maintenance workers in Local 35. Both contracts expire Jan. 17, and union leaders warned at an Oct. 14 rally that they could strike. Elicker said the return “shows that Yale has significant capacity to help support the people that are supporting Yale’s operations.” Marchand, who also works for Local 34, said, “Yale can afford to settle a great contract with its unions.” A Yale spokesperson did not respond to a request for comment by publication time of this article. For Marchand, the conversation isn’t ending anytime soon. Yale’s role in the city “is a question that’s not going to go away,” he said. “It’s one of the most important questions that we have in New Haven.” The post Yale’s Endowment Surges To $54B appeared first on New Haven Independent. ...read more read less