# The Working Ledgers: How Seven Research Institutions Invest, Stay Solvent, and Keep the Work Going Read from their own tax returns, seven American research institutions run on completely different money, from MITRE's no-reserve pass-through to HHMI's $27 billion endowment. All of them compete in the markets you rely on too. Author: J.A. Watte Published: July 4, 2026 Source: https://jwatte.com/blog/the-working-ledgers/ --- An earlier run of this series read the deathless ledgers of the [foundations and estates](/blog/quiet-shelf-rocky-mountain-foundations/), the money that gives itself away long after its owner is gone. This one turns the same method on a different kind of institution: the operating research nonprofits, the ones that do not give money away but spend it, on the nation's hardest science and engineering. Seven of them filed public tax returns that landed on the same desk this week, and read side by side they answer four questions cleanly. How does each one invest? How does it stay solvent? How does it keep the work going? And for how long can it keep going? The filings invent nothing. Every number below is read straight from a Form 990, free to anyone at ProPublica's Nonprofit Explorer, and the whole point is that the answers could not be more different from one institution to the next. The seven are [the MITRE Corporation](/blog/mitre-corporation-ledger/), [the Aerospace Corporation](/blog/aerospace-corporation-ledger/), [the Charles Stark Draper Laboratory](/blog/draper-laboratory-ledger/), [Southwest Research Institute](/blog/southwest-research-institute-ledger/), [the Broad Institute](/blog/broad-institute-ledger/), [the Howard Hughes Medical Institute](/blog/howard-hughes-medical-institute-ledger/), and [the Marine Toys for Tots Foundation](/blog/marine-toys-for-tots-ledger/). Six do research. One moves toys. Together they map the entire spectrum of how an American nonprofit can pay for itself, and the map has a clear left end and a clear right end. ## The spectrum, in one line each At the left end sit the pass-throughs, the institutions that hold almost nothing and live entirely on what the government pays them this year. MITRE took in $2.48 billion, about 99 percent of it federal, and holds essentially zero investments. The Aerospace Corporation took in $1.37 billion on the same model. Both spend roughly eighty cents of every dollar on their own people and keep a cushion measured in a few months. They do not invest, because a cost-reimbursement contractor has nothing to invest. Their solvency is a contract, and their future is an appropriations bill. In the middle are the institutions that live on contracts but chose to keep a reserve. Southwest Research Institute funds itself on research contracts from hundreds of government and industry clients, and parks a conservative $270 million cushion in cash and short-term instruments. Draper Laboratory, the lab that built the Apollo Guidance Computer, does the same kind of contract work but keeps its $270 million reserve in a diversified investment pool that looks like a small endowment, global equities and private capital and hedge funds. Same revenue model as the pure pass-throughs, a very different balance sheet, because these two banked something for a rainy day and one of them put it to work in the markets. At the right end are the endowments, where the portfolio is not a cushion but the engine. The Broad Institute stands on three legs, federal grants and philanthropy and about $1.5 billion in invested endowment, and spends roughly $750 million a year on biomedical science. And the Howard Hughes Medical Institute is the pure case: $27.6 billion in net assets, of which nearly two billion dollars of investment income in a single year funds the whole enterprise, an institution that employs scientists directly and can do so, by design, forever. Off to one side sits the outlier, Toys for Tots, a holiday charity that moves half a billion dollars in donated toys through a machine of Marine volunteers and keeps a $136 million rainy-day fund it is willing to spend into. ## They all drink from the same well Here is the thread the person who asked for this series wanted pulled, and it runs through every one of these ledgers. The institutions that invest, invest in the same equity and security markets that almost everyone's future depends on. This is not a metaphor. When HHMI's in-house investment office buys public equities, it is buying the same stocks that sit in a retiree's 401(k). When it fights for a slot in a top venture fund, it is bidding against Yale's endowment, against the California teachers' pension, against Norway's sovereign wealth fund and Singapore's, for the same scarce seats in the same deals. When the Broad Institute allocates three quarters of its endowment to alternatives, it seats Seth Klarman and Eric Schmidt on the board that oversees it, so the line between the institution and the markets it invests in nearly disappears. When Draper holds global equities and private capital, it competes for returns with every pension fund on earth. And when Toys for Tots invests its reserve, it does so in a Pacer ETF and a PIMCO income fund and an American Funds balanced fund, the exact tickers a schoolteacher holds in a retirement account. There is one well of market returns, and everyone lowers a bucket into it: the individual saver, the corporation, the city and state pension, the sovereign wealth fund, the federal government's own trust funds, and these research institutions. In a good year the well is generous and lifts all the buckets together, which is why HHMI could book nearly two billion dollars of investment income in the year of its filing. In a bad year the level drops for everyone at once, the endowment and the pension and the retiree feeling the same drawdown in the same quarter. The institutions on the right end of this spectrum have effectively converted themselves into investors who happen to run laboratories, and they rise and fall with the market exactly as you do. The institutions on the left end, MITRE and Aerospace, have opted out of that well almost entirely, and their fate rides not on the market but on the federal budget. Neither position is safe. They are just exposed to different weather. Aerospace shows the subtlety at the seam. It holds no endowment, so it looks like it has no market exposure at all. But it has promised its workforce a pension, and the assets behind that promise, about $410 million of them, are invested in the same markets, while the obligation itself is the largest liability on its books. So even a pure contract shop can be dragged into the well through the one door it cannot close, the retirement plan, which is the same door that has strained corporate balance sheets and state budgets for a generation. ## The other side of the ledger: what they owe and what wears out An institution is not just what it holds. It is also what it owes and what is quietly falling apart, and the four questions look different once you turn the balance sheet over. The liabilities tell you how each one is financed. The endowed institutions borrow on purpose: HHMI carries $935 million in tax-exempt bonds even while sitting on $27 billion, because when your portfolio compounds faster than tax-exempt debt costs, it is cheaper to borrow for your buildings than to sell investments that are busy earning more. The Broad carries $221 million in the same kind of bonds for the same reason. The contract shops borrow differently or barely at all: MITRE carries about $64 million in operating lease obligations for the space it rents and paid its other debt down during the year, while Aerospace carries a mortgage on its campus and, far heavier, that pension obligation. Toys for Tots owes almost nothing at all, $4 million in unpaid bills against a half-billion-dollar operation. Read the liability side and you can tell instantly which of these institutions is an investor using leverage and which is a channel that never accumulates enough to bother borrowing against. Depreciation is the liability nobody sends an invoice for. Every one of these institutions runs on physical capital that is always going obsolete, and the filings measure the erosion precisely. MITRE has depreciated more than half of its $1.27 billion capital base. Aerospace has written down more than half of its $1.39 billion in property. Southwest Research Institute, a campus full of engine dynamometers and spacecraft cleanrooms, has depreciated more than half of its billion dollars of plant. HHMI has written down two thirds of its $2.2 billion in buildings and equipment. Only the Broad, still pouring $30 million a year into new construction, looks young on this measure. Science is not only salaries and portfolios. It is microscopes and test chambers and buildings wearing out on a schedule, and the reason a place like SwRI reinvests its surplus into internal research and new facilities is that its edge is depreciating even faster than its books show. The reinvestment and the depreciation are the same fight, waged on two different statements. ## For how long, and the honest answer for each Put the four questions together and the "how long" answer falls out of the other three. The pass-throughs last as long as their sponsor keeps paying. MITRE has run FFRDCs since 1958 and Aerospace since 1960, which sounds like permanence until 2025, when MITRE's funding to run the national vulnerability database nearly lapsed and the company laid off hundreds of people after federal contract cancellations. An institution with no endowment cannot miss a funding cycle, because the funding cycle is the only thing holding it up. The contract shops that kept a reserve, SwRI and Draper, buy themselves a few years of runway and the freedom to say no, which is exactly the fragility MITRE felt and they did not. The endowed institutions last effectively forever, because an endowment that earns more than it spends has no expiration date. HHMI could lose a bad year in the market and keep paying its scientists from principal. The Broad, standing on three legs instead of one, is more diversified in its revenue but imports the political risk of the federal budget alongside the market risk of its portfolio, a proposed cut to federal research reimbursement threatening it with a $50 million hole in the same year the markets were fine. More legs carry more weight and give you more ways to stumble. And the charity lasts as long as the giving holds and the reserve cushions the lean years, which is why Toys for Tots can run a deliberate $17 million deficit, spending into its rainy-day fund on purpose, and still stand on $198 million in reserve. Its risk is the one arrangement none of the others quite share: a long downturn would cut donations and shrink the invested reserve at the same time, the cushion deflating exactly as the need grew. There is a single finding under all seven ledgers, and it is the one this series keeps arriving at. The differences that matter between institutions are never how important their work sounds. They are structural, and they are legible to anyone willing to read the filing: how the money comes in, whether any of it is kept, where the kept money is invested, what is owed against it, and whether the whole arrangement can survive a bad year in the one place it is exposed. MITRE and HHMI do work of comparable national weight, and they are financial opposites, one a channel that holds nothing and one a fortune that holds everything. The tax return tells you which is which in about ten minutes, and it never flatters and never lies. ## Related reading - [The Endowment That Employs Its Scientists](/blog/howard-hughes-medical-institute-ledger/): HHMI in full, the $27 billion perpetual machine. - [Two and a Half Billion Dollars, No Endowment](/blog/mitre-corporation-ledger/): MITRE, the opposite pole, a pass-through with no reserve. - [The Standing Institutions](/blog/the-standing-institutions/): the same lens turned on twelve civic institutions, from the Smithsonian to a pilots' union to a university's own insurance company. - [How Deathless Money Invests](/blog/how-deathless-money-invests/): the seven-style taxonomy of institutional money that this series built reading the foundations. - [The Quiet Shelf](/blog/quiet-shelf-rocky-mountain-foundations/): where the ledger-reading method started, on the grantmaking foundations. ## Fact-check notes and sources - **All figures** in this overview are drawn from each organization's most recent public IRS Form 990, and each is documented in full in the individual post linked for that institution: [MITRE](/blog/mitre-corporation-ledger/) (EIN 04-2239742, calendar year 2024), [Aerospace](/blog/aerospace-corporation-ledger/) (EIN 95-2102389, fiscal year ending September 2024), [Draper](/blog/draper-laboratory-ledger/) (EIN 04-2505372, fiscal year ending June 2025), [Southwest Research Institute](/blog/southwest-research-institute-ledger/) (EIN 74-1070544, fiscal year ending September 2024), [the Broad Institute](/blog/broad-institute-ledger/) (EIN 26-3428781, fiscal year ending June 2024), [HHMI](/blog/howard-hughes-medical-institute-ledger/) (EIN 59-0735717, fiscal year ending August 2025), and [Marine Toys for Tots](/blog/marine-toys-for-tots-ledger/) (EIN 20-3021444, calendar year 2024). The returns are available free at [ProPublica's Nonprofit Explorer](https://projects.propublica.org/nonprofits/) and the [IRS Tax-Exempt Organization Search](https://apps.irs.gov/app/eos/). - **The headline figures used above** (MITRE's $2.48 billion revenue and near-zero investments; Aerospace's $1.37 billion revenue and roughly $410 million in benefit-plan assets against its pension liability; SwRI's roughly $270 million conservative reserve; Draper's roughly $270 million diversified investment pool; the Broad's roughly $1.5 billion endowment and three-legged funding; HHMI's $27.6 billion net assets and nearly $2 billion of investment income; and Toys for Tots' $136 million reserve, $17 million deficit, and $198 million in net assets): each is sourced line by line in the corresponding individual post. - **The comparison to pensions and sovereign wealth funds** describes the well-documented reality that large nonprofit endowments invest in the same public and private markets as pension funds, sovereign wealth funds, and individual investors; the specific allocations (HHMI's private-equity and alternatives tilt, the Broad's roughly 75 percent alternatives, Draper's multi-asset pool, and the named retail funds in the Toys for Tots reserve) are read from each organization's Schedule D. *This post is informational and historical, not financial or investment advice. All figures are reproduced from public filings. Organizations and individuals are discussed from the public record as nominative fair use, with no affiliation implied and nothing endorsed by any of them. Characterizations of investment posture describe filing schedules, not recommendations.* --- Canonical HTML: https://jwatte.com/blog/the-working-ledgers/ RSS: https://jwatte.com/feed.xml JSON Feed: https://jwatte.com/feed.json Hero image: https://jwatte.com/images/the-working-ledgers.webp