Wealth inequality grows among US universities, study finds

Harvard tops the list, with $42.8 billion.JOSH REYNOLDS FOR THE GLOBE/File

The 10 richest universities, led by Harvard with its astounding endowment, hold more than a third of the total wealth in all of higher education, according to a study released Thursday by Moody’s Investors Service that examines growing wealth inequality in higher education.

Analysts studied the richest 20 public and richest 20 private schools, based on total cash and investments as of fiscal year 2014. Harvard tops the list, with $42.8 billion.

The richest institutions, which also include MIT, Yale, and Dartmouth, have grown even richer in the years after the economic collapse at a pace that far outstrips that of less-wealthy schools, some of which are struggling to stay open, according to the study.

Those 40 colleges also received 60 percent of philanthropic gifts in fiscal 2014, according to Moody’s, a trend that is expected to continue and further widen the gap between rich and poor schools.

Experts say it is becoming more difficult for less-wealthy schools to survive, and there is no one-size-fits-all solution.

“What we see again and again is that the most elite universities are those universities who have the most wealthy alumni,” said David Callahan, editor of Inside Philanthropy.

That bifurcation is a trend in the American economy in general, and higher education, an economic engine in New England, is no exception.

“It is a much more difficult environment in which to operate,” said Karen Kedem, coauthor of the study.

As a result, schools with less wealth and prestige must be smart with their money and work harder to attract students. And it is the midlevel universities that desperately want the students, Kedem said.

That is because most private colleges earn 75 percent of their revenue from tuition and fees. By comparison, the 20 richest private schools earn only 15 percent of their revenue from student charges.

Because they depend less on tuition, many wealthy schools, including Harvard, with its $36.4 billion endowment, use their deep pockets to award more scholarships to low-income students. As a result, those colleges can create more economic diversity on their campuses in a way that mid-level colleges cannot afford.

The wealthiest schools are defined by healthy cash flows, highly diversified long-term investment strategies, and exceptionally strong philanthropic support.

Rich schools can pay better fund managers and make riskier investments, Moody’s analysts said in a phone interview. The richest schools were harder hit by the financial crisis of 2008, but recovered more quickly and reached record levels this year, the study says.

Harvard has raised $5 billion toward a $6.5 billion capital campaign announced in fall 2013, according to the university. The gifts and pledges received so far include one for $350 million, the largest in the university’s history. Boston University, Boston College, and Emerson College also received their largest donations ever this year.

Public universities outperformed privates in the six years postrecession, but that trend is expected to slow because many states have reduced higher education funding.

Chancellor Keith Motley of the University of Massachusetts Boston is part of a state system looking increasingly to private support. Although he appreciates that the state has bolstered UMass funding in recent years, it does not come close to keeping the school competitive, he said.

“We’re seeking private financial support in ways that my predecessors . . . would have never dreamed they would have to,” Motley said.