In his annual State of the University letter published on Jan. 29, University President Christopher Eisgruber ’83 defended the University’s endowment, its diversity, equity, and inclusion (DEI) efforts, and institutional restraint. Though his letter does not, according to him, address the recent orders and policies from the Trump administration targeting universities, much of what Eisgruber wrote addressed attacks on higher education in recent years.
Endowment as a “retirement annuity"
Princeton’s endowment stood at $34.1 billion at the end of the last fiscal year, making it the 4th largest private school endowment behind Harvard, Yale, and Stanford. In his letter, Eisgruber defended the importance of continual growth in coming years.
“Princeton’s ability to seize new opportunities, and the excellence of its existing scholarly and teaching enterprise, also depend critically on the University’s endowment,” Eisgruber wrote.
In 2017, President Trump signed the Tax Cuts and Jobs Act, part of which stipulated an endowment tax of 1.4 percent for institutions with more than 500 students and endowments greater than $500,000 per student (Princeton’s endowment is over $4 million per student). Eisgruber criticized this act in his letter, calling it a break from the “philosophy that in this country we don’t tax nonprofit schools, hospitals, churches, and other purely charitable enterprises.”
Trump, even before his second term, has continued to speak of expanding taxes on endowments. Eisgruber argued in return that an endowment is “nothing like a savings account” and “more like a retirement annuity that must provide income every year for the remainder of the owner’s life.” He specifically talked about a long-term plan for Princeton’s future: “We hope Princeton will live for centuries,” he wrote.
Princeton’s average annual return on endowment has been 9.2% for the past 10 years, though the past few years have been more inconsistent — returns in fiscal year 2021, for example, were 46.9%, coinciding with the rest of the economy opening up from the pandemic. Eisgruber wrote that “Princeton’s endowment pays out more than 5% of its value each year,” though he predicted a harder financial future for the endowment, writing that long-term returns may not be as high as historic patterns as “more institutions have competed for the best investments.”
Eisgruber also credited the endowment with allowing improvements to the financial aid system, citing reforms like the University’s replacement of loans with scholarships in 2001.
He also predicted a more active role in politics and policymaking, writing that he is “devoting larger amounts of time to Washington” and collaborating with “colleges, universities, and other allies…”
Last October, Eisgruber was elected chair of the Association of American Universities (AAU) Board of Directors — the initial press release detailed that Eisgruber would “represent AAU in discussions with lawmakers, help develop national policy positions, and play a significant role in determining the association’s agenda during the coming year.” The AAU has also recently spoken out against the Office of Management and Budget (OMB) memo, saying they were “extremely concerned” about the potential impact of funding freezes.
Steadfast commitment to Diversity, Equity, and Inclusion
Eisgruber highlighted Princeton’s approach to transparency in sharing data on diversity and inclusion, as well as other aspects of student wellbeing and campus safety.
In Trump’s first days in office, he has taken significant actions against DEI initiatives. On Jan. 21, 2025, Trump issued an executive order titled “Ending Discrimination and Restoring Merit-Based Opportunity,” which directs all federal departments and agencies to terminate DEI programs and initiatives. Additionally, multiple federal agencies began removing references to DEI from its public communications and workforce.
Eisgruber, however, doubled down on current policies such as the annual DEI report which he wrote shares "the important work of students, faculty, staff and alumni to build community and support success and belonging at the University.”
“I am proud of Princeton’s commitment to voluntarily disclose some climate data of another kind that universities rarely share,” Eisgruber wrote in his letter. He continued that “the risks are real, but the data informs the work that we and other universities do to enhance the inclusivity of our campuses.”
Among the “risks” Eisgruber highlighted include potential misinterpretation of the data, which could lead to criticism or negative perceptions. Despite these concerns, Eisgruber emphasized the importance of transparency in identifying areas for improvement and fostering an inclusive environment.
Eisgruber’s letter includes an appendix with detailed survey results on students’ sense of belonging, satisfaction with their Princeton experience, willingness to recommend Princeton to others, perceptions of campus respectfulness, and freedom to express opinions without fear of judgment.
“We have better data, and we need to share it,” Eisgruber wrote. “These data matter because we want all students to thrive at Princeton and feel that they belong here.”
The letter also addresses concerns regarding political and religious diversity. Princeton has previously faced criticism for a perceived lack of conservative representation among its faculty and student body, with concerns that conservative faculty and students are shunned by their peers. Eisgruber wrote that students who identify as "extremely conservative" report lower rates of belonging and higher rates of concern about being treated respectfully. "We also believe that ours must be a community where all members can speak their mind and where they engage in civil and respectful dialogue, even on—indeed, especially on—difficult topics," he wrote.
Additionally, at Princeton and many other institutions in the past year, antisemitism has been a concern.
“Politicians and journalists have expressed understandable concern about the experience of Jewish students on college campuses,” Eisgruber stated. “I recognize that antisemitism is rising in this country and on college campuses; that is unacceptable, and we must respond vigorously.”
At the same time, Eisgruber highlighted that Jewish students at Princeton have reported some of the highest levels of belonging out of any group on campus. On the other hand, Eisgruber shared that Muslim students are reporting lower levels of satisfaction.
Under the question, “Sense of Belonging to the Princeton Campus Community,” categorized by current faith-based identity or religious preference, Jewish students had a mean score of 9.39 out of 12 while Muslim students had a score of 8.42.
Eisgruber reiterated Princeton’s commitment to openness and ongoing self-improvement. “Princeton is always under construction,” he wrote, invoking a phrase from former University President William Bowen. “However good we are, we must aim to be better.”
Continued institutional restraint
In a September interview with the ‘Prince’, Eisgruber ruled out adopting institutional neutrality, describing his approach as “institutional restraint,” where a University makes careful decisions to issue statements that most directly relate to its core mission. In his letter, he once again rejected the policy, which has gained traction at universities like Stanford and Yale in the past year, in large part due to the Oct. 7th attack on Israel and subsequent pro-Palestine campus protests.
“You can’t be neutral about everything,” Eisgruber told the ‘Prince’ at the time.
He emphasized the responsibility that university presidents hold while also acknowledging the challenges that they face.
“Rarely, if ever, has it been so important for university presidents to speak up for higher education,” he wrote. “It is also, of course, an unusually fraught time for university presidents to make statements. Critics pore over presidential messages looking for errors, bias, or other rhetorical sins.”
In the past couple years, his counterparts at Harvard University and the University of Pennsylvania resigned after testifying in front of Congress, as critics said that they failed to sufficiently condemn antisemitism.
In particular, Eisgruber noted that he would defend and explain “why diversity and inclusivity are essential to the excellence of [Princeton’s] campus communities and the achievement of [the University’s] educational mission.”
He did, however, also reiterate that he would issue statements less often moving forward. “While I have issued statements only rarely in the past, I expect that I will do so even less frequently in the future,” Eisgruber wrote.
In an email sent Wednesday, Eisgruber invited members of the University community to discuss his letter at the first Council of the Princeton University Community (CPUC) meeting of the semester on Monday, Feb. 10 from 4:30–6 p.m. on the B-level of Frist Campus Center.
Christopher Bao is a head News editor for the ‘Prince.’ He is from Princeton, N.J. and typically covers town politics and life.
Hayk Yengibaryan is an associate News editor for the ‘Prince.’ He is from Glendale, Calif.
Please send any corrections to corrections[at]dailyprincetonian.com.
Correction: This article has been updated to reflect an incorrect description of the impact of the COVID-19 pandemic on endowment returns. The 'Prince' regrets this error.
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