Brown’s endowment saw an investment return of 19.6% in fiscal year 2026, generating $1.6 billion in investment gains. The University anticipates that it will pay an increased endowment tax of 4% — up from 1.4% — in FY27 as a result of the endowment’s growth, according to a University statement released on Friday.
As of the close of FY26 on June 30, the endowment sits at $9.5 billion, a nearly 19% increase from last year’s market valuation of $8 billion. The endowment’s investment return is the highest return in the last five years.
In the University’s 2025 endowment report, they had also indicated that Brown would be slated to pay the 4% tax rate in the “coming year.” But according to Deputy Chief Investment Officer Joshua Kennedy ’97, the University was actually charged at the 1.4% rate for FY26.
“We have been anticipating this change for some time,” Kennedy added. “Since the growth of the endowment, the payout rate, incoming gifts and the total number of students are all uncertain numbers, we cannot know for certain, a priori, what our endowment/student calculation will be.”
“The endowment is an essential financial resource for Brown to pursue its mission and the staff of the Investment Office, with help from the Investment Committee, is committed to ensuring it continues to support Brown scholars for generations to come,” Kennedy wrote.
The endowment contributed an all-time high of $357 million to Brown’s operating budget to support “student scholarships, professorships, academic programs, teaching and research, among other strategic priorities,” according to the press release. This total is 24% of the University’s total revenue for FY26, equaling nearly $32,00 per student.
The University limits endowment distributions — the share of endowment funds that can be used to support operations — to 4.5% to 5.5% of the average market value of the endowment. The University Resources Committee recommends this rate each year based on annual budget needs, aiming to fulfill the current obligations of the University while preserving future purchasing power.
The endowment’s growth also consists of $135 million in “new endowed gifts” and the receipt of $200 million from the Brown University Health independent health system through expanded affiliation agreements.
Brown’s 19.6% investment return is in the top 25% of institutions managing over $1 billion in investments, according to data cited in the press release from Cambridge Associates. The University’s annualized return of 13.6% over the past 10 years places Brown’s endowment within the top 5% of all reported returns.
This year’s investment returns note a significant jump from last year’s 11.9% growth and the FY24 rate of 11.3%.
Kennedy described the Investment Office as having an “all-weather strategy” focused on durability, rather than forecasting future economic conditions. The office also aims to mitigate risk through diversification and diligence.
“Diversification means that the portfolio is spread across a wide range of financial assets that react in different ways to macroeconomic circumstances,” he wrote. “Diligence means that we do extensive research into the managers and opportunities where Brown is invested, and monitor the progress of those investments constantly.”
Penn — the only other Ivy League university to have released its investment returns for FY26 — had a 27.4% return, which equates to a $6.3 billion year-over-year gain, the largest in recent Penn history.
Since 2018, Brown’s endowment has been managed by Chief Investment Officer Jane Dietze. Dietze will be leaving the University on Dec. 31, and will be succeeded by Kennedy, who has served as deputy chief investment officer since 2022.
Jeremiah Farr is a senior staff writer covering university hall and higher education.
