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Harvard, or other universities, are not too different from other corporations. Why would they offer to pay for something that their customers themselves would

Harvard, or other universities, are not too different from other corporations. Why would they offer to pay for something that their customers themselves would pay for? After all, a Harvard degree is quite valuable, and who's reaping the benefit of it? They want to make as much money off their endowments (savings) as they can, and spend as little of it as possible on things that they don't need to pay for. Note that while the endowment is huge, actually a large part of it is restricted in what it can be used for, by "generous" donors who put conditions on their money, funnily enough. Turns out that they don't want the money spent on just sending kids to school, they rather want to see their name on art in museums, on professorships, and on department buildings. Harvard to take an example, has an endowment of $53B, roughly (https://finance.harvard.edu/files/fad/files/fy21_harvard_financial_report.pdf https://finance.harvard.edu/files/fad/files/fy21_harvard_fin...). Approx. 80% of that has donor restrictions on it and only $9B is useable freely for anything desired. Last year, Harvard's operating costs were $5B (roughly). To pay for that (roughly): -- $1B came from student tuition -- $1B came from funded research grants -- $2B was released from the endowment -- $1B in gifts, royalties, licenses, other income In a sense, $2B spent from such an endowment is not too different from what you would plan for your own retirement. Admittedly, Harvard Management Company (investment arm) earns much better than average though. It's a choice by these universities, how big they want to be, the ambition of their educational goals, and to some extent, yes their power and influence. They are no different than many corporations. If you want altruistic behavior and free tuition, well, you want a slightly different system.

godelski 4y ago
Maybe Harvard isn't the best example since it is private. But to me this seems a bit different when we're talking about public universities. It seems odd to run an academic facility like a company trying to turn a large profit. It is weird to me to compare them to corporate organizations, just like it is weird to compare government to corporations. I know it happens and there are some similarities, but just because apples and oranges are both spherical fruits doesn't mean we're comparing equal things.
- supernova87a 4y ago
  Well, I think you've pointed out and answered part of your question. Public universities generally have little/much smaller endowments by comparison because they rely on government for their steady stream of revenue. And because of that they can, and have pressure to, fulfill policy-based goals of educating students at little to no cost, or heavily subsidizing it. Some public universities are acting according to the incentives they've been given, and accumulating their own endowments to insulate against political unreliability, and you can also see why college sports are such an important revenue stream for them as a result.
pishpash 4y ago
Altruistic behavior in a non-profit? The horrors. If they want to be a corporation fine, then pay taxes like one. Otherwise they should find ways to price education at cost, not at market clearing prices. I am sure they can, just hit up donors some more and trim the administrative largess.
throwawaycities 4y ago
> They are no different than many corporations. Harvard is significantly different than most corporations because Harvard doesn’t pay taxes. Yet Harvard is not a typical not for profit either, as you won’t find many non-profits with a $53B treasure chest. > If you want altruistic behavior and free tuition, well, you want a slightly different system. Yes, the majority want a different system, your average person doesn’t really like the fact institutions like Harvard/Yale have a combined ~$100B tax free war chest and supply 8 of the 9 lifetime appointments to the Supreme Court.

godelski 4y ago

Maybe Harvard isn't the best example since it is private. But to me this seems a bit different when we're talking about public universities. It seems odd to run an academic facility like a company trying to turn a large profit. It is weird to me to compare them to corporate organizations, just like it is weird to compare government to corporations. I know it happens and there are some similarities, but just because apples and oranges are both spherical fruits doesn't mean we're comparing equal things.

supernova87a 4y ago
Well, I think you've pointed out and answered part of your question. Public universities generally have little/much smaller endowments by comparison because they rely on government for their steady stream of revenue. And because of that they can, and have pressure to, fulfill policy-based goals of educating students at little to no cost, or heavily subsidizing it. Some public universities are acting according to the incentives they've been given, and accumulating their own endowments to insulate against political unreliability, and you can also see why college sports are such an important revenue stream for them as a result.

pishpash 4y ago

Altruistic behavior in a non-profit? The horrors. If they want to be a corporation fine, then pay taxes like one. Otherwise they should find ways to price education at cost, not at market clearing prices. I am sure they can, just hit up donors some more and trim the administrative largess.

throwawaycities 4y ago

> They are no different than many corporations. Harvard is significantly different than most corporations because Harvard doesn’t pay taxes. Yet Harvard is not a typical not for profit either, as you won’t find many non-profits with a $53B treasure chest. > If you want altruistic behavior and free tuition, well, you want a slightly different system. Yes, the majority want a different system, your average person doesn’t really like the fact institutions like Harvard/Yale have a combined ~$100B tax free war chest and supply 8 of the 9 lifetime appointments to the Supreme Court.