<p>Harvard is not the only well-endowed institution asking people to open their wallets again. How much is enough for colleges and universities? Despite $30+ billion endowments, some schools want more, at a time of record tuition far outstripping inflation, increasingly limited access to their degree programs, higher taxes and flat to declining incomes for graduates. Another case of the rich getting richer with little societal benefit? Given their tax exempt status, is it not reasonable that these institutions should expand their access, say by expanding class size and degree opportunities at least in line with American population growth? And I don't mean "certificate" courses on the web. How many of us open our wallets when requested, why, and should we be directing our dollars elsewhere?</p>
<p>I think expanding class size would be detrimental. I’d be happy if Harvard uses the money to expand financial aid and pay lecturers better.</p>
<p>Harvard, as well as most very successful institutions, have a very long term view. They are probably thinking 50 to 100 years out, not just over the next several years. It is how they have been able to thrive for so long. So that 30B or 6B is not just about the next several classes or a new building, it is about the resources to be able to adapt and possibly restructure themselves over the next century. Remember that in 2009 during the financial crisis, Harvards endowment dropped by $11B. That is real money, even for Harvard. The endowment covers a third of it’s annual operating budget.</p>
<p>I am not sure what their endowment has to do with higher taxes and flat or declining incomes and of course if you know of a better place to donate, you are free to direct your dollars elsewhere.</p>
<p>The stock market is high. Equity shareholders may be looking to solidify some gains and may be seeking tax deductions. Might be a good time to kick off another capital campaign.</p>
<p>Doubtful that Harvard will increase the seats of the UG freshmen class - they want all the frosh living on the Yard . . . and there is no more room. They could increase financial aid. It is possible they have designs on increasing access to graduate studies.</p>
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<p>Huh? Correct me if I’m wrong, but I was under the impression these funds were to be raised from voluntary donations, not from higher taxes. In which case anyone who feels the way you do is free to withhold any and all donations from Harvard. </p>
<p>And as far as “increasingly limited access” to the degree programs, I haven’t heard that Harvard has reduced freshman enrollment in any of its programs. If the acceptance rates keep going down that’s because the programs have become more popular and attractive with more applicants clamoring to get in, not because Harvard has cut access to anything. </p>
<p>How they plan to spend the money according to the announcement is :</p>
<ul>
<li>teaching and research (45 percent)</li>
<li>financial aid and “the student experience” (25 percent)</li>
<li>capital improvements (20 percent)</li>
<li>flexible funding “to foster collaborations and initiatives” (10 percent)</li>
</ul>
<p>25% of $6.5 billion is a nice piece of change for financial aid.</p>
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<p>Gotta admit, my first reaction on reading this is that surely those who might contribute could come up with more deserving and needy organizations than Harvard in the current economy… But back to your regularly scheduled programming, I am sure all the Harvard alums will disagree.</p>
<p>No one is forcing people to donate.</p>
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<p>Voluntary TAX EXEMPT donations. There is a reasonable social policy question whether endowments as big as Harvard’s should get continued tax-expenditure support, and I’ve heard folks say that Harvard has basically become a hedge fund with a university attached. But I also suspect this is probably about the last place on earth where one could have a reasoned discussion about that.</p>
<p>I encourage anyone who feels that “society” is not getting its money’s-worth out of Harvard to refuse to donate to campaign.</p>
<p>Thanks for your permission. I’m an alum and never give them money – except to the extent that all of us do indirectly since a $6.5 billion campaign will create a couple of billion in tax write-offs for the donors, thus putting fiscal pressure on other taxpayers.</p>
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<p>didn’t seem to hurt Larry Summers…</p>
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<p>Okay, let me amend my earlier statement. I encourage anyone who thinks that some of Harvard’s money from this campaign should go for taxes to take the money they were going to donate to Harvard and give it to the government instead.</p>
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<p>Yes, I suppose it’s fair to conclude that somewhere around $2 billion of the $6.5 billion will come from Uncle Sam in the form of federal income tax deductions for the donors, and another smaller chunk will come from state taxpayers in the various donors’ states.</p>
<p>I wonder, though, how much of that represents “new” tax deductions, and how much is just siphoned off from other tax-deductible causes. So maybe during a Harvard capital campaign, Harvard gets a bigger slice of a more or less constant pool of tax-deductible money, and various hospitals, religious institutions, K-12 schools, and soup kitchens get less. Either way, I’m not convinced building Harvard’s endowment is the best use of those funds, but of course others may feel differently and they’re free to spend their money as they see fit.</p>
<p>And I encourage you to read Stanley Surrey’s 1985 book “Tax Expenditures.” It’s okay. He’s one of yours (former HLS tax prof).</p>
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<p>Of course they are. That’s not the issue. The issue is whether the social utility that causes us to grant tax-exemption has diminishing returns to scale – especially when the big endowment crowds out other charities like you described. The 1969 tax reforms addressed some of these issues and imposed a minimum outlay percentage on charitable endowments, but there has been some talk of tightening those standards.</p>
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<p>How is Harvard capable of “crowding out” any other donation? This, along with many of the other criticisms, implies that Harvard is somehow making people donate against their will - that it has the ability to force people give their money to it instead of some other worthy charity (or the government).</p>
<p>I must admit I felt completely ripped off by the fact that I had to pay full tuition at H for my D because our income was over the prescribed eligible limit for FA, while H had $billions in the bank. Really??? Yes, we were suckers for the brand, but so far it has been all positive (but has not yet ‘returned’ the $200K+ we laid out), and we will keep final judgment at bay. Ask us and D in 40 years if it seems “worth it.”</p>
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<p>No, it doesn’t.</p>
<p>I would advance strongly the argument that many alumni donate to their alma mater for legacy purposes. Some universities pursue large donations quite aggressively the year junior is applying to college. Mine certainly did. A development officer was dispatched to my home, over one thousand miles away, for that purpose. If people feel pressured rather than choosing other charities to which they would rather donate, there most definitely is a crowding-out effect. Where I live, this pressure exists down to the kindergarten level for private schools. Not quite a mafia shakedown, but plays on fear and apprehension regarding admissions.</p>
<h2><<i must="" admit="" i="" felt="" completely="" ripped="" off="" by="" the="" fact="" that="" had="" to="" pay="" full="" tuition="" at="" h="" for="" my="" d="" because="" our="" income="" was="" over="" prescribed="" eligible="" limit="" fa,="" while="" $billions="" in="" bank.="">></i></h2><i must="" admit="" i="" felt="" completely="" ripped="" off="" by="" the="" fact="" that="" had="" to="" pay="" full="" tuition="" at="" h="" for="" my="" d="" because="" our="" income="" was="" over="" prescribed="" eligible="" limit="" fa,="" while="" $billions="" in="" bank.="">
<p>This is a form of economic discrimination and should be abolished in my opinion. If endowments served all students equally, tuition would be reduced across the board and more families could afford to pay full fare. Those who cannot would not have as much loan debt as total costs would still be lower. How many of us can charge rich people more than poor people at our place of business?</p>
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