Wealthy University Endowmen Funds

I had a different name for this thread but upon reviewing some of the online reaction to the issue I decided to rename it. The discussion is due to grumblings in the Massachussetts legislator on whether or not to tax endowment funds.

Here is an
[url=http://www.nytimes.com/2008/05/25/opinion/25bogert.html?_r=3&ref=opinion... TIMES op-ed[/url]

quote:

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Harvard is the wealthiest private institution in America except for the Gates Foundation, which has about $37 billion. But unlike the Gates Foundation, Harvard isn’t legally required to spend 5 percent of its income every year. Last year, it didn’t. Nor does it pay tax. Nor is it bound by most of the strictures of financial reporting that make spending at Gates transparent and publicly accountable.

A few hundred alumni have formed Harvard Alumni for Social Action, to try to channel 25th-reunion giving to destitute universities in Africa. In three years, we’ve raised $425,000 — a lot for the University of Dar es Salaam but hardly a match for our annual class “gift.” And evidently not enough to win the respect of President Faust, who has begged off meeting the group. Harvard clearly doesn’t like any effort that might divert a dollar away from its Cambridge coffers.

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I link to a blog entry from [url=http://cosmicvariance.com/2008/05/29/the-purpose-of-harvard-is-not-to-ed... Carroll at Cosmic Variance:[/url]

quote:

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Harvard University’s endowment is $35 billion, and some people aren’t happy about it. Massachusetts legislators see money that could be theirs, and are contemplating new taxes. Social activists see money that could be going to charity, and want to divert it. Distinguished alumni who have landed at public universities wonder why, with all that cash, Harvard graduates such a tiny number of students.

These are all legitimate concerns, and I won’t be suggesting the ideal policy compromise. But there is one misimpression that people seem to have, that might as well be corrected before any hasty actions are taken: the purpose of Harvard is not to educate students. If anything, its primary purpose is to produce research and scholarly work. Nobody should be surprised that the gigantic endowment isn’t put to use in providing top-flight educational experiences for a much larger pool of students; it could be, for sure, but that’s not the goal. The endowment is there to help build new facilities, launch new research initiatives, and attract the best faculty.

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Her entry contains several links and more writing after what I quoted.

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Universities are more than just factory lines stamping "Diploma" again and again. In the case of Harvard, they could increase enrollment, but would that really contribute more to the human body of knowledge than hiring more faculty, more graduate students, more laboratories, et cetera? It is not clear that it would and I can see why many would believe it would not.

There are however points that could be made about cutting Harvard off from taxpayer funding such as the National Science Foundation. Certainly wonders why they chose not to invest their resources? There is research that can only be done with lots of money, such as a LARGE study of behavior/nutrition, a new telescope; among other examples.

ETA: The writer was Sean Carroll not Julianne Delcanton, my bad.

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I am having trouble keeping track as I'm changing my mind on this every five minutes :-P

[ 29 May 2008: Message edited by: 500_Apples ]