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Your Support of Caltech Research and Education

May 23, 2025
Office of the President

To: The Caltech Community
From: Thomas F. Rosenbaum, President; David A. Tirrell, Provost


The U.S. House of Representatives this week passed legislation that proposes to dramatically expand a tax on university endowments. If enacted, it would jeopardize funding that is invested directly in our mission to advance world-leading research and to educate tomorrow's STEM leaders for the benefit of society.

The House proposal implements a tiered tax structure, ranging from 1.4 percent to 21 percent, on the annual investment income that Caltech and other universities across the country generate from long-term, permanent investments from donors. At Caltech, a tax of this proportion would result in an annual loss of tens of millions of dollars in funding, endangering one of the Institute's primary revenue sources. Endowment revenue supports student financial aid and is invested in the Caltech faculty, facilities, and research and education programs that help make the U.S. a global leader in science, engineering, and innovation. Furthermore, the House bill undermines our ability to maintain the current level of private funding that is necessary to continue to deliver on the high level of excellence in research and education that our community experiences today.

We write to bring to your attention that this bill will be discussed next in the Senate, and to ask you to make the case for Caltech's research and teaching mission to your networks and your elected representatives. Now, more than ever, it is important that we all make clear to the Senate and to our representatives that if this provision remains in the final tax bill it will have a fundamentally damaging impact on private colleges and universities – and their students – across the country.

Our endowment, which has been nurtured over decades through the collection and strategic management of individual donations, is allocated to support Caltech's research and education every day.

  • Over the past five years, Caltech's endowment has made possible $200 million in cumulative investment in student financial aid—an investment that is critical to our ability to practice 100% need-blind admissions, which means that domestic students are admitted to Caltech without consideration of their financial need, and ensures that more than 75% of our students graduate from Caltech debt-free.
  • Furthermore, this past year, with confidence in the long-term stability of the endowment as a foundation for planning, the Institute expanded its financial commitment to undergraduate students and their families. Beginning with the fall 2025 incoming class, students with family incomes of $200,000 or less receive offers of financial aid packages that cover the full cost of tuition, while students with family incomes of less than $100,000 receive offers of grant aid packages that cover the full cost of tuition, fees, housing, and food.
  • Simultaneously, Caltech has used annual allocations from the endowment to attract and retain leading faculty across fields of study and to support them in the launch of new and continuing research endeavors, such as projects that demonstrate the viability of seismic technology as a tool for measuring ground water, that pioneer novel autonomous systems and technologies, and that have led to an interdisciplinary effort to harvest solar power in space and transmit it back to a receiver on Earth.

We are grateful to our donors who over decades have generously invested in Caltech, in our research, and importantly in our people because of a shared commitment and belief in our mission. The financial resources generated from their investments, which we have been fortunate to grow over time, are essential to our ability to advance research and education that enhances well-being, drives innovation, and supports U.S. leadership in science and engineering. We take seriously our responsibility to deliver a public good and allocate the private resources we have been gifted and stewarded to that end.
As Caltech's president and provost, we advocate continually for the value of Caltech's contributions to society and join with other Caltech senior leaders and alumni and friends to communicate how we realize our mission and the importance of this work to economic development, job creation, public health, and national security, impacting the success of communities across the country.

The next few weeks are a critical period in which you can add your voice to the conversation. The House bill will go before the Senate to be discussed, debated, and potentially amended. If the Senate approves the bill with modifications from its current version, the Senate and House will need to reconcile any difference and agree on one final proposal before the bill becomes law. This means that we have a concentrated window to advocate for the importance of science and discovery, of research and the value of the investment in students' education, and of the contributions that we make every day at Caltech to tackle the world's most complex challenges. I encourage you to contact your senators and to urge them to reject the endowment tax increase and any such provision that would cripple our ability to deliver world-class education and research.

Please share the following important information with your elected representatives:

  • The endowment tax places more financial burden on students by making universities less affordable and less equipped to contribute to our economic prosperity, public health, and national security. Taxing schools reduces the revenue available for financial aid, a primary use of the endowment. 
  • Colleges and universities manage endowments responsibly. Caltech relies heavily on its endowment to support its integrated research and education mission. Of the $211 million drawn from the endowment in FY 2024, 90 percent of the funds were invested in financial aid and fellowships or research and teaching endeavors.
  • The endowment tax will undermine the country's global leadership in technology and innovation.
  • America's universities lead the curiosity-driven research that has led to transformative new technologies and innovations that define our lives, from artificial intelligence to the ability to sequence the human genome, to pioneering chip design that has allowed for smartphones, personal computers, and other electronic devices. The work from laboratories at Caltech and America's other universities has profoundly changed our world and has the potential to continue to drive future innovations and advancements.