What’s a University Worth?
A look at the world’s richest school system.
“Some folks look at me and see a certain swagger, which in Texas is called ‘walking’.”—George W. Bush
In the British post-secondary education system, students typically decide where to seek enrollment based on their intended concentration of study. Most teaching is done by permanent faculty, majors are hard to switch, and the requirements to graduate are rigorous. The execution of the university undertaking has mostly stayed true to centuries of tradition. Given the British influence over the Commonwealth of Nations, similar setups can be found in India, Canada, Australia, New Zealand, and dozens of other countries, albeit each with subtle differences arising from cultural evolution. For most of the world, a college or university is intended to prepare one for a specific profession, and such establishments have not yet experienced significant mission creep.
Not surprisingly, the situation in the US is rather different. Certainly, some of the oldest, most prestigious, and highly selective universities in America support an academic structure and campus culture an Oxford graduate would recognize, but where you study often carries just as much weight as what you accomplish and what degree you receive. Camaraderie, alumni networks, and the benefit of being forever associated with a globally recognizable brand are the true drivers of value to many enrollees. As such brands have grown, so too has their social mandate, and many of the largest US universities do far more than teach. They operate hospitals, own extremely valuable sports franchises, perform discovery research for countless industries, incubate startups, and provide lifelong income and benefits to the tens of thousands of employees who make it all happen.
This is especially true for the premier public universities in key states, which can usually be identified by the fact that “University of” precedes the state’s name in their titles. Institutions like the University of Michigan, the University of Minnesota, and the University of California have morphed into gargantuan entities whose tentacles stretch into many corners of their local economies, performing broad public service roles well beyond education. The combination of generous government support, favorable tax treatment, and huge donations from wealthy alumni has also transformed these school systems into financial behemoths with operating budgets and endowments measured in the many billions.
If most things are bigger, bolder, and brasher in the US compared to the UK, the same could be said of Texas relative to the other US states, and the University of Texas (UT) is truly astonishing in scale, scope, and financial reach. Almost under the radar, the UT System has parlayed fortuitous land grants from the late 1800s, a commitment to conservative fiduciary principles, and an unabashed embrace of fossil fuels into a comprehensive foundation of generational wealth that soars above all its peers worldwide, including the much-vaunted Harvard University. It’s among the largest beneficiaries of the shale revolution, and countless deals that have reshaped the global energy landscape have been cut with nothing more than a handshake in the stands of a Longhorns football game. The numbers are truly staggering. Let’s quantify them.