The largest endowments in the world are not held by universities or charities but by governments: Norway’s Government Pension Fund Global tops the list at roughly $2 trillion, followed by other sovereign wealth funds in China, the Gulf states, and Singapore. Among charitable foundations, the Lilly Endowment and the Bill & Melinda Gates Foundation each hold close to $80 billion. Harvard leads all universities at $56.9 billion. Each of these pools shares a common design — the principal stays invested permanently and only a slice of returns is spent each year — but the tax rules and payout obligations attached to each type differ sharply.
Sovereign Wealth Funds Lead by a Wide Margin
State-owned investment vehicles hold the largest concentrations of managed capital on the planet, functioning as national-level endowments that invest surplus government revenue for long-term stability.
Norway’s Government Pension Fund Global stood at 21,268 billion Norwegian kroner (approximately $2 trillion) at the end of 2025.1Norges Bank Investment Management. The Fund’s Value It holds stakes in roughly 7,200 companies worldwide, averaging 1.5% ownership of all listed companies globally, which makes it the single largest equity investor on earth.2Norges Bank Investment Management. The Norwegian Government Pension Fund Global Norway built the reserve by channeling petroleum revenue into international investments.
China operates two of the next largest funds. The China Investment Corporation reported net assets of $1.37 trillion at year-end 2024.3China Investment Corporation. href=”https://www.china-inv.cn/chinainven/xhtml/Media/2024EN.pdf” target=”_blank” rel=”noopener”>2024 Annual Report China’s State Administration of Foreign Exchange manages a separate portfolio estimated at close to $2 trillion, though it discloses far less about its operations.
The Abu Dhabi Investment Authority, Saudi Arabia’s Public Investment Fund (with over $900 billion in assets), and Kuwait’s Investment Authority each manage portfolios exceeding or approaching $1 trillion.4Public Investment Fund. PIF Home Singapore’s GIC rounds out the top tier at an estimated $936 billion.
The United States has no federal sovereign wealth fund, but several states operate their own. The Alaska Permanent Fund, built from North Slope oil revenue, held $89.3 billion as of April 2026 and distributes annual dividends to Alaska residents.5Alaska Permanent Fund Corporation. Performance Texas manages the Permanent University Fund and Permanent School Fund as constitutionally established investment pools, and New Mexico’s State Investment Council oversees roughly $70 billion in severance tax and land grant permanent funds.
Largest Charitable Foundations
The Lilly Endowment, funded almost entirely by shares in pharmaceutical company Eli Lilly, held nearly $80 billion in assets at the end of 2024.6Lilly Endowment. 2024 Annual Report The concentration in a single stock is unusual at this scale, and the endowment’s value swings significantly with Eli Lilly’s share price. Its grantmaking focuses on community development, education, and religion, primarily in Indiana.
The Bill & Melinda Gates Foundation held approximately $78.7 billion in total assets as of 2024, with a separate investment trust managing the donated assets from Bill Gates, Melinda French Gates, and Warren Buffett.7Gates Foundation. Financials Its spending targets infectious disease, global poverty, and agricultural development in some of the world’s poorest regions.
The Wellcome Trust in the United Kingdom reported an investment portfolio valued at £39.9 billion (roughly $52 billion at recent exchange rates) for the 2024/25 fiscal year, with total funds of £35.7 billion after liabilities.8Wellcome. Wellcome Annual Report and Financial Statements 2024/25 Wellcome focuses on biomedical research and global health. The Ford Foundation held approximately $17.5 billion as of December 2024, directing grants toward social justice and human rights programs worldwide.9Ford Foundation. 2024 Audited Financial Statements
Largest University Endowments
Harvard has held the top position among university endowments for decades. As of June 30, 2025, the endowment stood at $56.9 billion, managed by the Harvard Management Company, which has delivered annualized returns of approximately 11% since its founding.10Harvard Management Company. Partners and Performance Endowment distributions funded $2.5 billion of Harvard’s operations that year, accounting for 37% of the university’s total revenue and making it the single largest source of funding.11Harvard University. Financial Overview
Yale University ranks second at $44.1 billion as of June 2025, having grown significantly under a long-running investment approach that emphasizes private equity, venture capital, and real assets over traditional stocks and bonds. Stanford University’s endowment reached $40.8 billion by August 31, 2025, the end of its fiscal year.12Stanford Report. Stanford University Reports Return on Investment Portfolio, Value of Endowment
The University of Texas System operates one of the most unusual endowment structures in higher education. Its wealth draws heavily from the Permanent University Fund, a constitutionally established pool built on oil and gas revenue from more than two million acres of West Texas land. That fund alone held roughly $38 billion in market value as of early 2025, and the UT System Board of Regents oversees an additional $14 billion in separately established endowments.13UT System. Endowment Administration and Compliance The combined figures routinely place the UT System among the top three university endowment holders in the country.
Princeton University reported $35.7 billion in endowment net assets as of June 30, 2025, and the University of Pennsylvania held $24.8 billion as of the same date.14Princeton University. Report of the Treasurer15University of Pennsylvania. About the Endowment These figures shift constantly with market performance, and the annual NACUBO-Commonfund Study of Endowments tracks rankings across more than 650 institutions each year.
How Much These Funds Actually Spend
Most university endowments follow a spending rule in the range of 4% to 5% of the fund’s average market value, calculated over a rolling multi-year period. The average effective spending rate across higher education was 4.9% in fiscal year 2025, up slightly from 4.8% the prior year.16NACUBO. U.S. Higher Education Endowments Report Stable Returns, Increase Spending to $33.4 Billion in FY25 The rolling average acts as a shock absorber. When markets crash, the three- or five-year average drops more slowly than the current value, preventing sudden budget cuts. When markets surge, the smoothing prevents institutions from spending as if the boom will last forever.
The average 10-year return for institutions in the NACUBO-Commonfund Study was 7.7% as of fiscal year 2025, which comfortably exceeds typical spending rates and inflation. That gap is what lets an endowment grow in real terms while still funding operations each year.
Foundations differ from university endowments in an important way: federal law requires private foundations to distribute a minimum amount each year or face steep excise taxes. That mandatory spending floor forces foundations to operate as active grantmakers rather than passive wealth accumulators. University endowments face no comparable federal distribution requirement, though many follow voluntary spending policies in the same range.
Tax Rules Applied to the Largest Endowments
Endowments and foundations enjoy tax-exempt status, but the exemption comes with strings. Three federal tax provisions matter most.
Private Foundation Excise Tax on Investment Income
Every private foundation pays a 1.39% excise tax on its net investment income each year.17Internal Revenue Service. Tax on Net Investment Income For a foundation the size of the Gates Foundation or Lilly Endowment, that translates to hundreds of millions of dollars annually. The tax applies to dividends, interest, capital gains, and rents from investment assets, and it’s reported on Form 990-PF.
Minimum Distribution Requirements for Foundations
Federal law requires private foundations to distribute a minimum amount each year tied to 5% of the fair market value of their non-charitable-use assets. A foundation that falls short faces a 30% excise tax on the undistributed income. If the shortfall still isn’t corrected by the end of the taxable period, a second tax of 100% kicks in on whatever remains undistributed.18Office of the Law Revision Counsel. 26 U.S. Code 4942 – Taxes on Failure to Distribute Income Those penalties are severe enough that virtually every foundation meets or exceeds the minimum. Qualifying distributions can include grants, program-related investments, and reasonable administrative costs directly connected to charitable activities.
University Endowment Excise Tax
Starting in 2026, private colleges and universities face a significantly restructured excise tax on their net investment income. Under 26 U.S.C. § 4968, as amended by the One Big Beautiful Bill Act, the tax now uses a tiered rate structure based on the institution’s “student adjusted endowment,” which is the fair market value of non-exempt-purpose assets divided by the number of students:19Office of the Law Revision Counsel. 26 USC 4968 – Excise Tax Based on Investment Income of Private Colleges and Universities
- 1.4% for institutions with a student adjusted endowment between $500,000 and $750,000 per student.
- 4% for institutions with a student adjusted endowment between $750,001 and $2,000,000 per student.
- 8% for institutions with a student adjusted endowment above $2,000,000 per student.
The tax applies only to private institutions with at least 3,000 tuition-paying students, more than half of whom are in the United States, and a student adjusted endowment of at least $500,000 per student. Public universities are excluded entirely.19Office of the Law Revision Counsel. 26 USC 4968 – Excise Tax Based on Investment Income of Private Colleges and Universities The 8% top rate is a dramatic increase from the flat 1.4% tax that applied before 2026, and it affects a handful of the wealthiest institutions disproportionately. Harvard, with $56.9 billion spread across roughly 23,000 students, comfortably exceeds the $2 million per student threshold. Princeton and Stanford likely fall into the same top tier.
One notable wrinkle: the law requires institutions to include royalty income from federally funded research in their taxable investment income, and student loan interest income also counts.19Office of the Law Revision Counsel. 26 USC 4968 – Excise Tax Based on Investment Income of Private Colleges and Universities For research-intensive universities, those inclusions could meaningfully increase the tax base beyond what pure portfolio income would suggest.