Earlier this year, Commonfund, in partnership with the National Association of College and University Business Officers (NACUBO), released the 2025 NACUBO-Commonfund Study of Endowments (NCSE). The Study examines investment performance, governance and management practices at hundreds of U.S. higher education endowments and related foundations over the July 1, 2024 – June 30, 2025 fiscal year (FY25).
Following the release of the FY25 Study, Commonfund examined results by Carnegie Classification, grouping 557 participating institutions out of 657 total NCSE respondents into four main categories: Associate’s Colleges (18 institutions), Baccalaureate Colleges (159 institutions), Doctoral Universities (271 institutions), and Master's Colleges & Universities (110 institutions). Carnegie Classifications are a widely used framework for categorizing U.S. colleges and universities by their educational mission and degree activity, offering a structured way to identify meaningful differences in institutional profile, scale, and endowment management. Below is a comparative analysis across each Carnegie category and against the 657 total respondents from the full NCSE Study.
The Institutions
The four Carnegie categories varied considerably in size and aggregate assets. Doctoral Universities were by far the largest cohort, accounting for $670.5 billion of the $944.3 billion in total assets reported across all NCSE respondents—driven by an average endowment size of $2.5 billion. Baccalaureate Colleges collectively held $86.5 billion in assets, with an average endowment of $543.9 million. Master’s Colleges & Universities reported $22.0 billion in total assets and an average endowment of $200.0 million. Associate’s Colleges, the smallest group at just 18 participants, held $734.0 million in aggregate assets and an average endowment of $40.8 million.
THE TOP-LINE RESULTS
Performance
Returns were positive across all Carnegie categories and all reported time horizons in FY25. For the 1-year period, Associate’s Colleges posted the highest return of the groups analyzed at 11.4 percent. Among the larger groups, Doctoral led at 11.0 percent, slightly ahead of the 10.9 percent average for total NCSE respondents and the 10.9 and 10.7 percent reported by Master's and Baccalaureate, respectively.
Over longer horizons, the picture largely converged. Three-year average returns ranged from 9.7 percent (Doctoral) to 12.1 percent (Associate), compared with 10.0 percent for total respondents. Five-year returns were similarly tight across Baccalaureate, Doctoral, and Master’s—10.4, 10.3, and 9.9 percent, respectively—all near the 10.2 percent average for total schools. At the 10-year horizon, Doctoral and Baccalaureate essentially matched the total cohort at 7.7 and 7.8 percent, while Master’s reported 7.6 percent. Fifteen-, 20-, and 25-year returns were not available for Associate’s due to insufficient sample size. For the other three groups, returns across those extended periods tracked very closely with total respondents, generally within 10 to 20 basis points at each horizon.
Asset Allocation
Asset allocation differences across Carnegie categories reflect the substantial variation in endowment size—and the investment access and governance capacity that often accompanies it. Doctoral Universities reported the highest allocation to alternative strategies at 48.1 percent (dollar-weighted), well above the 44.8 percent average for total NCSE respondents and meaningfully higher than the 42.2 percent reported by Baccalaureate Colleges. Master’s Colleges & Universities allocated just 21.5 percent to alternatives, and Associate’s Colleges only 3.9 percent—levels that reflect both the constraints of smaller endowments and, in many cases, more limited access to illiquid or complex investment vehicles.
Correspondingly, smaller institutions leaned more heavily on publicly traded equities. Associate’s reported a 64.3 percent allocation to public equities, the highest of the groups analyzed, and nearly double the 31.5 percent average for total respondents. Master’s allocated 51.8 percent to public equities, while Baccalaureate and Doctoral reported 37.3 and 28.1 percent, respectively. Fixed income allocations followed a similar inverse pattern: Associate’s reported 27.1 percent in fixed income versus just 9.9 percent for Doctoral and 10.7 percent for total respondents. Real assets were relatively consistent across groups, ranging from 3.4 percent (Associate) to 9.8 percent (Doctoral), near the total respondent average of 9.7 percent.
Note: Publicly traded equities includes U.S. equities, non-U.S. equities, emerging markets and global equities; Alternative Strategies includes private equity, private venture capital, marketable alternatives, secondaries and sustainable investments.
Spending
The average annual effective spending rate across Carnegie categories was close to the total respondent average of 4.9 percent, with modest variation by group. Baccalaureate Colleges reported the highest average effective spending rate at 5.2 percent, while Doctoral Universities reported the lowest at 4.8 percent. Master’s Colleges & Universities reported 5.0 percent, essentially in line with the Study average. Associate’s Colleges reported 3.0 percent—the most conservative spending rate of any Carnegie group, consistent with their smaller asset bases and potentially more limited endowment income relative to operating needs.
On spending policy, the most common methodology across all groups was spending a percentage of a moving average, echoing the broader Study results. Doctoral Universities reported the highest usage of this method at 72.3 percent, followed by Master's (73.6 percent), Associate (77.8 percent), and Baccalaureate (67.9 percent), compared with 74.3 percent for total NCSE respondents. Use of the hybrid ("Yale/Stanford rule") method was most prevalent among Baccalaureate Colleges at 15.1 percent, above the 12.1 percent reported by total respondents.
Gifts
New gifts to endowment reflected the significant size disparity across Carnegie categories. Doctoral Universities led with $9.6 billion in total new gifts in FY25 and average gifts of $37.7 million—well above the $22.6 million average for total NCSE respondents. Baccalaureate Colleges received $1.3 billion in total new gifts with an average of $8.6 million, while Master’s Colleges & Universities reported $718.8 million in total and an average of $6.8 million. Associate’s Colleges received the smallest absolute amounts, with $28.6 million in total new gifts and an average of $1.6 million.
Median gifts across groups were, as is typical, well below their respective averages—a reflection of the outsized impact of a small number of large gift recipients in any given year. Median gifts ranged from $0.9 million for Associate’s Colleges to $10.7 million for Doctoral Universities, compared to $5.2 million for total respondents.
Operating Budget Support
Baccalaureate Colleges reported the highest average reliance on endowment to fund operating budgets at 18.3 percent—above the 15.2 percent average for total NCSE respondents. Master’s reported 14.7 percent, Doctoral 12.0 percent, and Associate’s 9.0 percent. Median values told a somewhat different story: Baccalaureate again led at 12.8 percent, while Doctoral and Master’s Colleges & Universities reported 4.3 and 4.4 percent, respectively—both below the 6.1 percent total median. The median for Associate’s was reported at 0.0 percent, indicating that for many in this group, the endowment plays a minimal direct role in funding day-to-day operations.
Summary
Taken together, the FY25 NCSE data reveal a clear pattern across Carnegie categories: as institutional size and endowment scale increase, allocations shift from public markets toward alternatives, gift volumes rise, and the endowment takes on a more central role in funding operations. Doctoral Universities most closely resemble the aggregate Study profile, while Associate’s and Master’s operate with more constrained portfolios concentrated in public equities and fixed income. Baccalaureate Colleges stand out with competitive long-term returns and the highest spending rates among Carnegie categories, demonstrating that mid-sized endowments can generate strong outcomes, even as they face meaningful questions about long-term sustainability at their current spending levels.
For all groups, the consistency of long-horizon returns suggests that disciplined, policy-driven investment management has served institutions well regardless of classification. We hope these insights serve as a useful reference for your own peer comparisons and benchmarking, and we encourage you to read the full FY25 NCSE Study for a complete picture of endowment management across U.S. higher education.
