A majority of endowment funds are dedicated<\/a> to instructional use and student financial aid. Each year, Penn aims for an annual payout rate of 5% of each endowment fund.<\/p>\n Get the DP delivered straight to your inbox.<\/p>\n Sign Up<\/a><\/p>\n Most of Penn\u2019s endowment is invested <\/a>in the Associated Investments Fund, a pooled investment vehicle in which many individual endowments and trusts hold units. The University\u2019s Office of Investments \u2014 made up of nearly 40 investment, operations, and administrative professionals \u2014 manages the fund.<\/p>\n At the Sept. 24 meeting, Dingfield also announced the University\u2019s net operating surplus in FY26. Penn saw a total surplus of $636 million, well above<\/a> its forecast.<\/p>\n In its budget for the upcoming fiscal year, the University has continued to advocate for cost-reduction measures amid ongoing uncertainty surrounding federal research funding, international student visa policies, and changes to student loan programs.\u00a0<\/p>\n Starting this July, Penn also faces a 4% federal excise tax<\/a> on its endowment income \u2014 a move University officials previously warned could significantly hinder its ability to support student financial aid, faculty research, and capital growth.<\/p>\n The 4% tax applies to universities with a student-adjusted endowment between $750,000 and $2 million. Penn\u2019s current<\/a> endowment tax is derived from the 2017 Tax Cuts and Jobs Act, which levied a 1.4% excise tax on private universities with endowments of more than $500,000 per student.\u00a0<\/p>\n![\"chart](\"https:\/\/www.newsbeep.com\/us-pa\/wp-content\/uploads\/2026\/09\/1790268975_764_thumbnail.jpeg\")
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