College Endowments

It seems from recent reports that some of the largest fortunes are owned not merely by Bill Gates and Warren Buffet but by colleges and universities throughout the country. For example, Harvard University leads the list and has an endowment of $28 billion; Yale is second with $18 billion, Stanford is third with $14 billion, and the University of Texas is fourth and Princeton is fifth, each with a little more than $13 billion. Rounding out the top ten are MIT, Columbia, University of California, University of Michigan, and Texas A&M. Despite these enormous bank accounts, colleges pay no taxes. The people who work for them--cleaning the hallways, serving in the cafeterias, and running the physical plant, for example—pay taxes (often on minimum or near-minimum wages) but the university itself pays none. This is not to say that colleges should pay taxes—although if those with these large endowments did pay, it would ease the tax burden on every other US citizen—but rather to illustrate the sweet deal they have.
In contrast Bill Gate’s fortune is estimated at $56 billion and Warren Buffet’s at $52 billion—admittedly more than even Harvard and Yale. But, consider what these fortunes are used for. Gates has established the Bill and Melinda Gates Foundation (now estimated at around $33 billion) which has contributed enormously to global health and research. And Warren Buffet has pledged close to $31 billion to the Gates foundation.
Given the example set by these two individuals—who, admittedly, are not typical—we need ask what these universities—also not typical—with endowments in the billions are doing with their money. As far as I can tell, they are doing very little other than investing it for growth (Harvard’s investments grew at a rate of 16.7% this last year while Yale’s grew at a rate of 17.2%) and running campaigns to raise still more money.
With a large part of the world starving, lacking clean water, and suffering from diseases (many of which could be prevented with adequate medical treatment), it seems that these universities have an obligation to pitch in and help out the rest of the world. What are these universities waiting for before they spend some of their money? Are they guarding against inflation (even though they raise tuition at a rate far in excess of the rate of inflation)? The world would be a lot better, to take one simple example, if just the five universities with the largest endowments gave half their fortunes to charity (a total of $43 billion), death from preventable illnesses could likely be made history throughout the world. These universities would still have enough for their day-to-day operation. I suspect that Harvard could easily get along with an endowment of only $14 billion and Yale could manage to eke out an existence with only $9 billion.
And to relate this just a bit to communication: Very few people seem to ask the question of what a college's responsibility is and what purpose these enormous endowments serve. I suspect people don't question this because these schools are expert communicators--their PR is unquestionably among the best in the world.

No comments: