Recently, Harvard announced that their endowment dropped 30% last year from $36.9 billion to $26 billion. Due to their financial hardship, they eliminated 275 staff jobs and a put a freeze on salaries. At the same time, Harvard’s announcement of planned across-the-board budget cuts of 10% to 15% in all Harvard’s departments and a 3.5% tuition increase for the 2009-2010 academic year (much higher than the rate of inflation). Please excuse me while I rant.
This Begs the Following Questions be Asked to Harvard’s Endowment Fund Administrators
1. Why the #$%@ does Harvard need $26 billion in endowment funds? At a time when tuition rate increases have far exceeded inflation, Harvard is sitting on a huge pile of cash that has still earned 9% annualized over the last 10 years, even after the decline.
2. Why is Harvard cutting operational budgets and staff? Since when is a $26 billion pile of cash simply not big enough? These are donated funds and the university is charging enough in tuition to not draw from the base, so why would market fluctuations result in a menial 275 jobs being cut?
3. If Salaries are frozen and inflation is actually declining, why is Harvard raising tuition?
4. Is Harvard planning to start their own country? Become a publicly traded stock? Go to war against Canada? What is the motive for hoarding this obscene amount of cash? Yes, it does present opportunities to grow the university, improve facilities, and provide scholarships, but when do you draw the line?
Harvard’s Endowment Fund Story is not Unique – So here is what I’d Love to Ask University Presidents and Endowment Managers
I’m picking on Harvard here because they happen to have the largest endowment in the nation, but the truth of the matter is dozens of universities have well over $1 billion in endowment cash on hand. Here are some questions I would love to ask:
- Why are you increasing tuition at double the rate of inflation when you are sitting on billions of dollars in endowment funds?
- If you’re a public university (I realize Harvard is not, but many public universities have endowments far exceeding $1 billion), how can you accept government funds and raise tuition and sit on this cash? Don’t you owe it to the lower and middle classes and the United States of America as a public university to provide a world class education at an affordable price??
- At a time when our nation is struggling the most since the Great Depression, what are you waiting for? What better time is there than now to show your commitment to helping our country once again become the leader in education so that we can be leaders economically, ethically, and environmentally for centuries to come?
- Who is deciding whether or not to, and how much of this money to spend? Do they have a conflict of interest? Are their interests matching the welfare of the students that you’re supposed to be serving?
- Are you Scrooge McDuck?
Harvard Endowment Discussion:
- What do you think of these endowment funds?
- Am I missing something here? Is there a strong case for a $26 billion endowment?
- Should endowments be capped? How much would you cap them at?