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Does MIT really need to "hunt for funding"? My impression is that their endowment is enormous.

jacobolus 9y ago
A huge amount of the money in big endowments comes from various unsavory characters. The names of buildings at famous universities are a Who’s Who of famous fortunes built on slavery, war profiteering, drug running, child labor, wage theft and other worker abuse, large-scale environmental destruction, bribes and kickbacks, fraud, outright theft, etc. The Saudis are a particularly unsavory monarchy (torture, arbitrary imprisonment, lack of basic political rights, foreign assassinations, sponsorship of terrorism, direct military attacks on foreign civilians, etc.), but not fundamentally different from many historical donors.
- rflrob 9y ago
  The Saudi money is different in that the university administration today is seeking it out, as opposed to money from historical donors, which the current administration already has. Which is not to say that historical blood money, whether the direct result of (for instance) slave sales [1], or laundered as philanthropy from robber barons is ethically free and clear; rather, if your institution has long been engaged in taking that money, the very least you can do is stop taking it now. [1] https://www.nytimes.com/2016/04/17/us/georgetown-university-search-for-slave-descendants.html https://www.nytimes.com/2016/04/17/us/georgetown-university-...
smt88 9y ago
Endowments are complicated. The money often has restrictions on how it can be used, and of course the goal is for the endowment's principal to grow. A large endowment doesn't guarantee that an institution is wealthy enough to refuse money.
omegaworks 9y ago
Like any for-profit entity, growth is one of its primary objectives. Stagnation is death. It's certainly not helped that our government has taken aim directly at universities with sizable endowments[1]. The recent tax bill hits hard and has directly impacted MIT's ability to provide financial aid and pursue humanitarian research[2]. 1. https://www.insidehighered.com/views/2018/01/16/tax-college-endowment-unconstitutionally-targets-institutions-opinion https://www.insidehighered.com/views/2018/01/16/tax-college-... 2. http://news.mit.edu/2017/letter-regarding-new-federal-tax-bill-and-its-impact-mit-1220 http://news.mit.edu/2017/letter-regarding-new-federal-tax-bi...
- RcouF1uZ4gsC 9y ago
  A 1.4% tax on endowment income is consider being hard hit?
  - megaman22 9y ago
    If they invested it at all wisely, they should have made at least 5% over the past year. When I was at Dartmouth during the great recession a decade ago, they were gloating that they were nevertheless still making gains on the endowment, as the rest of the world crashed.
    - varenc 9y ago
      Last fiscal year MIT's investments earned a 14.3% profit or $1.86 in gains. The principle is now $14.8B. Agreed that 1.4% doesn't feel too crazy... http://news.mit.edu/2017/endowment-figures-2017-0908 http://news.mit.edu/2017/endowment-figures-2017-0908 Though curiously, MIT's own estimation of the new tax says it'll only cost $10M. If MIT really made $2.1B in one year on just investments, an extra $10M seems pretty manageable. (though this also seems far less than the 1.4% cited, so not sure what's going on). Here's where MIT mentions the $10M in new taxes: http://news.mit.edu/2017/letter-regarding-new-federal-tax-bill-and-its-impact-mit-1220 http://news.mit.edu/2017/letter-regarding-new-federal-tax-bi...
      - gowld 9y ago
        > at least $10 million a year. Presumably the tax is on future 2018 earnings, not 2017 earning.s
mrgordon 9y ago
Yes the source of much of the enormous endowment is Department of Defense, Department of Energy, and private donations (see the new Koch building, for example). The major energy companies (e.g. Shell) are also big donors to the climate change research group which has no doubt tempered their publicly expressed views. So overall much of the funding is from less than ideal sources from an ethical point of view. It does create some issues from time to time.
- robotresearcher 9y ago
  Are you sure the DoE or DoD are contributing to MIT’s endowment? That seems unlikely to me. Those agencies award research contracts with statements of work on a cost plus overhead basis. That’s not at all the same as contributing to an endowment.
  - mrgordon 9y ago
    "All research institutions get additional money tacked on to federal science and medical grants to help pay for general overhead. But federal rules allow institutions to deposit those payments into their general budgets, with no requirement they be used to directly support scientific endeavors." "Universities and the federal government became partners in research after World War II. MIT was one of the biggest beneficiaries. The National Institutes of Health initially set the overhead reimbursement rate at 8 percent and it eventually rose to 20 percent for all universities. In 1965, Congress permitted schools to directly negotiate their rates with the federal government, setting ballooning rates on their course." https://www.bostonglobe.com/news/nation/2013/03/17/harvard-mit-and-other-research-schools-thwart-obama-administration-effort-cap-overhead-payments/Nk5PT0Mc8MQZihFVNs5gNK/story.html https://www.bostonglobe.com/news/nation/2013/03/17/harvard-m... You are probably right that much of the money may technically not be part of the endowment but I'm not sure that the technicalities of what constitutes an endowment is very useful if they are still the main funder of the university. If universities include up to 90% "overhead" that can be deposited into their general budgets with no requirement that it supports scientific endeavors then what do we really mean when we say the DoE / DoD don't contribute to the endowment? We mean they weren't "donations" basically? The article wasn't really about donations / endowment so other than using a slightly wrong word its not really relevant to the discussion anyway. Furthermore more than half of MIT's R&D funds come from the government so this isn't exactly an edge case. Its the rule not the exception.

A huge amount of the money in big endowments comes from various unsavory characters. The names of buildings at famous universities are a Who’s Who of famous fortunes built on slavery, war profiteering, drug running, child labor, wage theft and other worker abuse, large-scale environmental destruction, bribes and kickbacks, fraud, outright theft, etc. The Saudis are a particularly unsavory monarchy (torture, arbitrary imprisonment, lack of basic political rights, foreign assassinations, sponsorship of terrorism, direct military attacks on foreign civilians, etc.), but not fundamentally different from many historical donors.

rflrob 9y ago
The Saudi money is different in that the university administration today is seeking it out, as opposed to money from historical donors, which the current administration already has. Which is not to say that historical blood money, whether the direct result of (for instance) slave sales [1], or laundered as philanthropy from robber barons is ethically free and clear; rather, if your institution has long been engaged in taking that money, the very least you can do is stop taking it now. [1] https://www.nytimes.com/2016/04/17/us/georgetown-university-search-for-slave-descendants.html https://www.nytimes.com/2016/04/17/us/georgetown-university-...

smt88 9y ago

Endowments are complicated. The money often has restrictions on how it can be used, and of course the goal is for the endowment's principal to grow. A large endowment doesn't guarantee that an institution is wealthy enough to refuse money.

omegaworks 9y ago

Like any for-profit entity, growth is one of its primary objectives. Stagnation is death. It's certainly not helped that our government has taken aim directly at universities with sizable endowments[1]. The recent tax bill hits hard and has directly impacted MIT's ability to provide financial aid and pursue humanitarian research[2]. 1. https://www.insidehighered.com/views/2018/01/16/tax-college-endowment-unconstitutionally-targets-institutions-opinion https://www.insidehighered.com/views/2018/01/16/tax-college-... 2. http://news.mit.edu/2017/letter-regarding-new-federal-tax-bill-and-its-impact-mit-1220 http://news.mit.edu/2017/letter-regarding-new-federal-tax-bi...

RcouF1uZ4gsC 9y ago
A 1.4% tax on endowment income is consider being hard hit?
- megaman22 9y ago
  If they invested it at all wisely, they should have made at least 5% over the past year. When I was at Dartmouth during the great recession a decade ago, they were gloating that they were nevertheless still making gains on the endowment, as the rest of the world crashed.
  - varenc 9y ago
    Last fiscal year MIT's investments earned a 14.3% profit or $1.86 in gains. The principle is now $14.8B. Agreed that 1.4% doesn't feel too crazy... http://news.mit.edu/2017/endowment-figures-2017-0908 http://news.mit.edu/2017/endowment-figures-2017-0908 Though curiously, MIT's own estimation of the new tax says it'll only cost $10M. If MIT really made $2.1B in one year on just investments, an extra $10M seems pretty manageable. (though this also seems far less than the 1.4% cited, so not sure what's going on). Here's where MIT mentions the $10M in new taxes: http://news.mit.edu/2017/letter-regarding-new-federal-tax-bill-and-its-impact-mit-1220 http://news.mit.edu/2017/letter-regarding-new-federal-tax-bi...
    - gowld 9y ago
      > at least $10 million a year. Presumably the tax is on future 2018 earnings, not 2017 earning.s

mrgordon 9y ago

Yes the source of much of the enormous endowment is Department of Defense, Department of Energy, and private donations (see the new Koch building, for example). The major energy companies (e.g. Shell) are also big donors to the climate change research group which has no doubt tempered their publicly expressed views. So overall much of the funding is from less than ideal sources from an ethical point of view. It does create some issues from time to time.

robotresearcher 9y ago
Are you sure the DoE or DoD are contributing to MIT’s endowment? That seems unlikely to me. Those agencies award research contracts with statements of work on a cost plus overhead basis. That’s not at all the same as contributing to an endowment.
- mrgordon 9y ago
  "All research institutions get additional money tacked on to federal science and medical grants to help pay for general overhead. But federal rules allow institutions to deposit those payments into their general budgets, with no requirement they be used to directly support scientific endeavors." "Universities and the federal government became partners in research after World War II. MIT was one of the biggest beneficiaries. The National Institutes of Health initially set the overhead reimbursement rate at 8 percent and it eventually rose to 20 percent for all universities. In 1965, Congress permitted schools to directly negotiate their rates with the federal government, setting ballooning rates on their course." https://www.bostonglobe.com/news/nation/2013/03/17/harvard-mit-and-other-research-schools-thwart-obama-administration-effort-cap-overhead-payments/Nk5PT0Mc8MQZihFVNs5gNK/story.html https://www.bostonglobe.com/news/nation/2013/03/17/harvard-m... You are probably right that much of the money may technically not be part of the endowment but I'm not sure that the technicalities of what constitutes an endowment is very useful if they are still the main funder of the university. If universities include up to 90% "overhead" that can be deposited into their general budgets with no requirement that it supports scientific endeavors then what do we really mean when we say the DoE / DoD don't contribute to the endowment? We mean they weren't "donations" basically? The article wasn't really about donations / endowment so other than using a slightly wrong word its not really relevant to the discussion anyway. Furthermore more than half of MIT's R&D funds come from the government so this isn't exactly an edge case. Its the rule not the exception.