Archive for February, 2014

Annenberg Hall (Steve Rosenthal)

Annenberg Hall (Steve Rosenthal)

Please Stop Giving Giant Donations to Rich Universities Matthew Yglesias urges. Following up with Seriously, Don’t Give Money to Fancy Colleges. Richard K. Vedder puts a version of the case in similarly blunt terms, Cut Off Harvard to Save America.

Yglesias’ disapproving reply to Kenneth Griffin’s $150 million donation to Harvard, “Harvard is already really rich.” Furthermore, “highly selective universities are terrible targets of charitable donations.” Essentially because, “…highly selective institutions remain what they always have been—mechanisms for the perpetuation of inequality and hierarchy.” Yglesias writes, “…the basic social role of the elite, highly selective institution hasn’t changed—they are both elite and selective, not democratic or egalitarian.”

Vedder makes a similar case, pointing out that “The eight Ivy League schools have less than 1 percent of U.S. college students but almost 17 percent of all endowment money.” These universities aren’t serving as engines to promote social mobility, “In the highly endowed schools, a median of 16 percent of students received Pells, compared with 59 percent at the lowest-endowed institutions.” Vedder asks, “Why do we provide favorable tax treatment that primarily benefits these wealthy schools?”

What are Yglesias and Vedder missing?

Well first, an alum can see oneself in a long line of beneficiaries of past giving. Those past givers helped make your education possible. Therefore, it is reasonable to voluntarily take on a responsibility to give to future generations of alums. This isn’t some abstract story for me. A Class of X grant paid tens of thousands of dollars towards my college tuition. That was serious money, mostly from people I have never met and will never meet. Supposing I had spectacular Kenneth Griffin wealth, I can see giving money to my already well off alma mater and it not being “ridiculous”, “misguided”, or a “terrible idea” as Yglesias claims.

Also, money for Harvard pushes the would-be Harvards to try to do and be better. For instance, Harvard College’s grants not loans program had a significant impact beyond Harvard. Within five years time peer institutions were instituting the same policy. Need blind admissions, simultaneously admitting students irrespective of aid needs and meeting full aid needs, are another policy that has reached beyond the Ivy League to more than 40 colleges (US News). In order to remain competitive, similar caliber schools have to adjust. In the financial aid sphere, this has redounded to the benefit of students.

Socioeconomic Distribution at Colleges by Selectivity

Yglesias points out that fancy colleges mainly serve an elite population; citing a chart from Brookings “a student at one of America’s most-selective universities is fourteen times more likely to be from a high-income family than from a low-income family”. The problem that Yglesias and Vedder cite is well worth paying attention to: insufficient socio-economic diversity at selective institutions is rightly troubling. But also consider that this phenomenon is at the tail end of a process with approximately 18 years of inputs by other social forces and institutions. Furthermore, since Griffin’s gift targets financial aid, it is directed at precisely those underrepresented students (a point Yglesias acknowledges with the backhanded compliment, “At any rate, in the scheme of misguided donations to Harvard this one seems not-so-awful. It’s mostly for financial aid, which is nice.”).

Also keep in mind that the things these fancy colleges are setting out to do are different from what community colleges set out to do. And that is a good thing. Diversity in the higher education sector allows for meeting a multiplicity of needs from remediation and career-change training to cutting edge research. A community college usually doesn’t have the global ambitions of the Harvards of the world. A campus on every continent is the kind of ambition Ivy presidents opine about. The aim of being a global university, occasionally becoming a “multiversity”, dots the speeches of high-powered university presidents. Or the aim to be at the forefront of pathbreaking research on not only Topic X, but also on related Topics Y and Z. For instance, the $200 million gift to the mind, brain, and behavior initiative at Columbia. If you want to be at the cutting edge of understanding, and hopefully curing, neurological disorders that is going to take big bucks.

And why not, as Vedder suggests, cut off Harvard? Why the capital gains tax break to the institution as well as the tax break for the individual donor?

For all its faults, higher education is something the US does extremely well. Taking onboard the various caveats about ranking methodologies, world rankings of US higher education institutions have the US performing quite well – with the Harvards of the US leading the way. Wealthy, fancy, name-brand private universities dominate the top slots of The Times Higher Education World University Rankings 2013-2014, the Shanghai Academic Ranking of World Universities, and the QS World University Rankings. Part of the reason these universities can lead is the significant public and private support they receive.

Exhibit B is the the university-government-corporate partnerships of places like Research Triangle Park and Silicon Valley. Others are currently trying to emulate these innovation, venture capital, catalytic research-enterprise zones; Dmitry Medvedev’s Skolkovo Innovation Center is one notable example. Cutting off the Harvards of the world is removing one of the legs from this three-legged stool.

Overall, there are multiple important values worthy of support in higher education and beyond. Both support for already world-beating institutions as well as support for institutions that manifestly serve a broader segment of society are worthwhile. Support for elite institutions should not be withdrawn in favor of the non-elite institutions, both deserve public and private donor support. Rather than make a case against giving somewhere, make a case for giving to somewhere as well. A point that extends well beyond higher education giving. Want to give money to the Met Opera? Wundebar! The Poetry Foundation gets $200 million bequeath? Great! This should be a both/and conversation, not an either/or conversation. A culture of major giving by the mega-wealthy is worth celebrating. Whatever the institution they give to, including Harvard.

(Full disclosure, I went to a university with a significant endowment, I have also worked at a university with a significant endowment. Neither was Harvard.)

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