May 7, 2025

Chemistry Nobel laureate David MacMillan, whose own Princeton lab has been affected by federal funding suspensions and slowdowns, shares why he’s standing up for the University and American higher education.

Efforts in Washington to increase the tax on endowments at Princeton and many of America’s other leading colleges and universities are expected to reach a crucial point next week. Endowments power everything we do here at Princeton, from the groundbreaking financial aid program to our world-leading research enterprise. We need your help to ensure key lawmakers understand why they should oppose this tax increase.

What is happening?

The House Committee on Ways and Means is scheduled to consider legislation that will reportedly include a large increase in the endowment tax as early as next week.

What can I do?

First, see if your Member of Congress sits on this committee. (The list of members can be found here; you can find your representative here.) If they do, this is the time to reach out to their office and let them know that you oppose an increase to the endowment tax. Please consider calling their office, which is often more effective than an email.

Why oppose an increase in the endowment tax?

• Princeton and America’s other leading colleges and universities are nonprofit entities that benefit all Americans. They seek cures and treatments for diseases like Alzheimer’s and cancer. They generate discoveries in quantum science and artificial intelligence that are crucial to America’s security and prosperity. They spin out businesses and develop talent and entrepreneurs. They power regional economies and educate diverse regional workforces. They change lives and lift people out of poverty.
• More than half of annual endowment spending goes directly to student financial aid – tens of billions a year. By reducing reliance on federal loans, endowments reduce burdens on American taxpayers and enable graduates more flexibility to pursue public sector or nonprofit jobs.
• University endowments are essential to America’s preeminence in higher education. Endowments supplement government investments in education, research, and state and local programs, at no cost to taxpayers. They turn private gifts into public projects that benefit every American and have helped make U.S. colleges and universities the envy of the world.
• The endowment tax threatens American competitiveness. Our country needs to win the global competition in the industries that will dominate the 21st century, such as AI, quantum science and biotechnology. Endowment support is essential to continued American leadership in these areas.
• Similarly situated taxpayers should be treated similarly. Nonprofit colleges and universities are no different from libraries, museums and philanthropic foundations in each congressional district – they are significant organizations impacting the overall well-being of the local economy, and they are all tax-exempt. Leading universities are often among the largest employers in their respective cities and regions, providing economic mobility and educational benefits to staff.

What would happen if the endowment tax goes up?

• If the endowment tax were to go up, it would be more challenging for Princeton and other institutions to commit to (or expand) financial aid programs, which have made leading universities more accessible and affordable for American families. Currently, about half of annual endowment spending goes directly to student financial aid – tens of billions a year.
• An increased endowment tax would lead to fewer scientific breakthroughs, less financial aid for low- and middle-income students, and a threat to American leadership on a host of issues that will define our economic and social standing in the years to come.
• A higher tax would increase institutional reliance on tuition, government loans and federal financial aid to balance the competing demands of accessibility and funding world-class research efforts.

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