Friday, February 13, 2015

This highly unequal world where the rich get richer!

Why stray away from higher education, when writing about it is such a stress reliever! ;)

As if I needed yet another piece of evidence that we ain't no Harvard comes this report:
Harvard, based in Cambridge, Massachusetts, and founded in 1636, is the oldest and wealthiest college with an endowment valued at $36.4 billion as of last June.
$36.4 billion.  Billion!  And two days ago, I had a tough time imagining what $17 million means!
The gifts to Harvard show that the nation’s wealthiest colleges are attracting a disproportionate share of higher education philanthropy, cementing their competitive positions, even as less fortunate universities find their finances weakening as they look for customers to afford soaring tuition. Such inequality is growing, said Ronald Ehrenberg, an economist at Cornell University.
Yep, "attracting a disproportionate share" is nothing but an euphemism for what we who are down in the trenches refer to as "the rich get richer."
“The richer institutions are pulling away from everyone one else in terms of their endowment resources and the vast annual giving sums they generate, much of which goes towards building their endowments,” Ehrenberg said. “At poorer places, you need the money for current operating and also for construction projects.”
 Yep, at poorer places--like the university where I work--there is always that problem with not enough money for operations, leave alone the endowment.

How rich are these elites?
Of the 832 total isntitutions [sic], the top 10.9% with endowments of more than $1 billion each hold 74% of all endowment assets.
At least Harvard correctly refers to the governing board as Harvard Corporation.  The best and longest running corporation ever!
Harvard is a real-estate and hedge-fund concern that happens to have a college attached. It has a $32 billion endowment. It charges its rich students — and they are mostly from rich families, with many destined to be rich themselves — hundreds of millions of dollars in tuition and fees. It recently embarked on a $6.5 billion capital campaign. It is devoted to its own richness. 
And, as any corporation, it knows well that its "nonprofit" status is a wonderful tax-shelter!
If the school lost its nonprofit status, it would owe the state of Massachusetts $80 million a year. (The $350 million donor owns $100 million of real estate in Harvard Square, by the way.) For now, it owes close to nothing on its land or its investment portfolio. 
The richest get insanely even richer.

Source: seriously? You need me to tell you, again?

Meanwhile, the tired student at my university juggles being full-time at school while working nearly full-time at a little more than minimum wages.

Source: oh, come on!

Of course, if I were to compare Harvard with a typical college in, say, India, it might seem as if the two institutions are on two different planets.  Oh well.  Such is life.


Anne in Salem said...

I wonder how much of the discrepancy is related to public vs private universities. Do most private universities have large endowments when compared to public ones? Most private universities are smaller than the public universities; one would think there would be larger funds at the schools with more alumni. Is there a difference between the dedication of the alumni? Do a higher percentage of private school alumni donate to their alma maters versus the public school alumni?

36.4B?? That's larger than some state budgets. Probably larger than some country's budgets. I wonder the purpose for which it is being saved. I wonder if it will ever be enough.

Corporation indeed.

Sriram Khé said...

Yes, the private U.s have a lot more in endowments than the public ones. And given that the private schools tend to be smaller (in terms of # of students) when you compare the endowment figures as $$$/student, it is jaw-dropping.

The endowment is the "wealth" which means it won't be equivalent to the annual incomes or expenditures, such as the budgets. But, yes, as many sites point out, Harvard's 36.4 billion is greater than many countries' GDPs!

Yet, Harvard and Stanford and ... aggressively rope in more money, leaving scraps for the rest of us ... because????

Most read this past month