Did you also not that the author of this brilliant piece of work used to be the president of the University of Phoenix? Yes, that is my go-to guy for my plan to redistribute endowments. It’s a trash piece by the former president of University of Trash.
Well, I don’t think you can assume that all the tax-deductible charitable contributions that now go to colleges and universities would go to individual or household consumption if the charitable deduction wasn’t available for contributions to the donor’s alma mater. Most of the donors would simply redirect their charitable spending to some other tax-deductible institution or cause, or find some other tax shelter.
That also suggests, however, that taxpayers can’t expect a big savings if charitable deductions for contributions to super-wealthy colleges and universities were cut off. Unless we’re going to eliminate the charitable deduction entirely–something that would probably affect churches, not-for-profit hospitals, social welfare charities, and others much more drastically than it would Harvard, which already has a formidable war chest. I don’t see that happening. For me, then, the question becomes, does it make sense to continue to lavish so much of the value of these subsidies on a handful of uber-wealthy institutions? And on the undergraduate education side, it becomes a bit hard to justify, given the relatively small numbers of students they educate, and given that on average half or more of their students are full-pays, meaning they’re coming from the top 4-5% in income and wealth, if not higher, making elite private colleges and universities as much a barrier to upward social mobility as a transmission belt of it.
Of course, research universities do more than teach undergraduates. They also teach graduate and professional students, and they do research, much of it cutting edge, some quite brilliant, all contributing, in some way, to advancing the frontiers of human knowledge. These are valuable things. But the better public research universities also do these things quite well, so again, it becomes a resource allocation question—how much sense does it make to concentrate the subsidies on a handful of the wealthiest institutions?
http://www.washingtonmonthly.com/college_guide/blog/research_on_forprofit_colleges.php
Nexus is a shill for U Phoenix. I guess Harvard and the other 94 top schools are in the way of some expansion plan ? Or maybe a convenient target to deflect investigations of for-profit schools, including U of P.
U of Phoenix collected exactly $5B in student aid in 2012 … sound like a familiar number ?
Not feeling quite as rich after last week. For most that is why–not that rich.
Charity Navigator will provide all the information on program expenses, which can let you see how many years of money they have stockpiled, and then you can decide if that particular university is worthy of YOUR money.
Harvard only has 3 stars for a variety of reasons, there are universities with four. There are other educational charities too that may match your particular needs.
Personally, I prefer to give money to charities who are spending their money on program expenses and need more. I figure this is easier than them trying to ramp up operations in some superficial way. Similarly, Harvard could find a way to spend 2x the $5B they spend now, but do they have a mission, a mandate, and the expertise to do that ? I think with the right giant donor and the mandate to say build a better engineering school, yes maybe they can actually spend $10B next year and provide valuable services.
I am not sure you can shut down a 3 star charity because you don’t like them, how about we shut down all the 1 and 2 stars first with multi-million dollar presidents and spending most of their money on advertising or little bracelets or T-shirts. March of Dimes 2 stars, Paralyzed Vietnam Vets 0 stars (I am not kidding).
I still think telling people who to donate their money to is not acceptable. Non-profit tax deductions are not give aways. There is nobody taking that money off-shore.
Smithsonian has $3B endowment and $1B in government grants, should we tax that too ? How about the Red Cross (they actually are draining their endowment at an alarming rate)?
I was thinking about donating to Yale, but figured I should just donate to their Hedge Fund instead - Malcolm Gladwell
Harvard spends $3B on education and research and gets only $600M in federal grants. Their endowment is high and getting higher ($1B in gifts this year), so maybe they will expand further.
@al2simon, I’m becoming more partial to the idea of Pell grants only for public schools (which is almost heresy given my background) not so much because of schools like Harvard but because of worthless for-profit institutions gaming the system, sucking the public teat, and giving out worthless degrees while taking in money from Pell and federal loans.
If you want to use the food stamps example, it’s as if we allowed people to use their food stamps to buy weed, tobacco, and liqour.
@PurpleTitan - I’m in complete agreement with you that many of the for-profit institutions game the system. But really the point I’ve been making is that we should judge the institution by the quality of the education it provides students (suitably controlled for their needs and backgrounds) - not by superficial and mostly artificial distinctions into public and private, wealth and not-wealthy.
I agree that we should prevent worthless for-profits from being eligible for Pell grant funds, not because they’re private or even for profit, but because they provide awful educations for their students.
There are good and bad publics, good and bad privates (see my previous post about bad community colleges). Many public flagships like Michigan, Berkeley, UVa, and others are 90% private anyway, and in fact have larger endowments (even on a per-student basis) than 90% of privates do. I think it’s all useless ideology.
ADDED - But you raise a great point. I wonder what % of Pell grants are going to worthless for-profits + publics with abysmal graduation rates versus the % that are going to privates (rich or otherwise). I highly doubt that on this measure the Harvards of the world are more than a drop in the bucket. It would be interesting to see the data.
BTW - About 10 years ago I was on an airplane and sat next to an analyst who covered the for-profit college sector. The stories he told were horrifying. Most of what he said has been in the press, but there is one thing he told me that I haven’t really seen in the newspapers. Most of the students are clearly just trying to improve their lives. However, a sizable number of the students are in on the scam themselves and aren’t the innocent victims that the press portrays them to be. Somehow, the “students” get to keep a few thousand dollars a year for themselves, and they can keep getting checks for a couple years even if they never show up for class at all as long as they check-in with an office a couple times a semester. However, most of them were too lazy to even do that, and the people who ran the for-profits were constantly bugging their “recruiters” to recruit a better class of scam artist as students.
Yep, put an easily gameable system together, and scammers will scam.
BTW, this is happening with income-based federal loans (for useless grad degrees) as well.
Some alums purposefully designate their gifts for student financial aid, which they feel is the most direct way of benefiting the students, as opposed to funding wasteful architectural features. One of the worst examples I saw was a small college in Maine which built a fancy new building with an incredibly high ceiling. I just looked at the pictures, and said “How much is that going to cost to heat?” I was given a special alumni tour of a relatively small new building at a university where the Dean was bragging about the huge expenses they made to get the floors and the window blinds to look just perfect. I kept thinking - what a complete waste.
A kid recently posted on the FA forums here that because she was tapped out on her loans and aid but hasn’t finished a degree yet, her mom was going to enroll in a local college, get her Pell, and give the dough to the kid (i.e. be a no-show in college but cash the check).
How this works in reality I’m not sure, but the kid posted with enough details that I assume this is a “thing” among people they know.
Here is a student who started at a community college with a graduation rate around 20%, transferred to a state school to complete his bachelor’s degree, and then went on to graduate study at Harvard:
http://news.berkeley.edu/2011/05/10/medalist2011/
http://sociology.fas.harvard.edu/people/aaron-benavidez
This has got to be the only place I’ve seen lower income people argue for more welfare for billionaires.
It is true that colleges which claim to “meet full need” can have widely varying financial aid offers for the same student and family.
https://fafsa.ed.gov/FAFSA/app/f4cForm indicates that the income levels at which one can receive Pell grants (though not necessarily the maximum amount) can exceed the median household income in the US. Of course, most of the self-described “middle class” on these forums probably think of that income level as “poor”.
Have we considered CCers who successfully transfer to a 4-year college/university as a mitigating factor to the otherwise-deplorable 20% CC graduation rate?
The type of student who can get admitted to Harvard, if s/he starts at a community college, will likely have a 95+% chance of eventually transferring to and graduating from a four year school (as opposed to a 5% or 10% chance of finishing even the community college part). The differences in graduation rates between different colleges are strongly associated with admission selectivity – Harvard’s high graduation rates are expected since it selects highly capable students at entry, while typical community colleges take all comers.
If you think that “Crappy Community College” is too expensive in terms of Pell grant money compared to Harvard, what would you propose for students from lower and middle income families who do not get admitted to Harvard?
Speaking of thoughtful analysis, you (hopefully) do understand that community colleges offer many training/vocational courses, none of which are even intended to lead to an AA? Moreover, there are plenty of us adult types that take a class or two for edutainment. After I took a couple of classes, one year I received a letter from Columbia about transferring! My wife has been taking language classes on and off for years. Nearly everyone in her class is a real adult, not seeking an AA; many are seniors just looking to keep the brain active. But yet, our federal government counts them all in graduation rate, when they publish stats.
Thus, comparing the “grad” rate of a community college to a 4-year college is well, devoid of critical thinking or “thoughtful” analysis. Their missions are too different for that one data point to be even close to relevant.
Sure the feds report what the feds report, but those of us who have been around the block realize that there are Lies, Damn Lies, and Statistics. 
(hint: teenagers who attend a juco full time have a 65% graduation rate., a rate that “rivals that of four-year institutions”, per the American Association of Community Colleges.)
But carry on.
What they ought to do is ask each one of them whether they intend on pursuing an AA degree. Among those who check the Yes box, that is the population to consider for graduation rate.
The rest may be there just to save some bucks before transferring to a 4-year, or maybe they just need a few classes to satisfy a new employer or their own academic curiosity. Those people should not be considered dropouts in the “grad rate” statistics.