The donors have spoken.
Apparently, it was the revolt of the university’s rich, powerful donors that helped seal the fate of Harvard University President Claudine Gay, who resigned this week. The board had spent months trying to defend her. First, it was against accusations that she wasn’t taking a strong enough stand against antisemitism on campus in the wake of the Oct. 7 Hamas attack on Israel. Then it was against accusations of plagiarism — or “duplicative language without appropriate attribution,” which is how the university described more than 40 alleged instances.
Harvard, naturally, declined to comment.
But Robert Reich, a former Harvard professor and former U.S. Cabinet member, is among many making the point forcefully that the donors pushed Gay out.
He may be right or not, but nobody is denying that donors have put enormous pressure on Harvard ever since this crisis erupted in early October. Many, reportedly, have been keeping their wallets closed — and warned that they would keep doing so until the crisis was gone.
Hedge-fund billionaire Bill Ackman, one donor, has been especially vocal and just published a long critique of how the university has lost its way.
I suspect many MarketWatch readers may have had their fill of this topic already. I wouldn’t blame them. But there are two things that bother me about this.
First, why is anyone giving money to Harvard anyway?
And, second, why does Harvard give two figs what donors say?
Harvard, in case anyone didn’t know, is richer than Croesus. It is by far the richest university in the United States, or the world. Its endowment is now up to $53 billion — which means that just parking the money in index funds should be enough to generate a good $5 billion a year or more. That’s before charging any student a penny for admission.
That’s equivalent to 85% of the university’s entire operating expenses, according to the annual report, which says they came to $5.9 billion a year.
This endowment is obscene. It is four times the size of the one at Columbia University, and five times that at Cornell University. It’s 20 or 30 times the size of the endowment at almost any college outside the Ivy League.
Who on Earth is still giving this institution a nickel? And why?
Pretty much any educational establishment you can name would be a better recipient of your charitable dollars. Last year — again, from the annual report — donors gave Harvard another $1.4 billion in gifts. The year before, they also gave $1.4 billion.
To put this in context, that’s bigger than the entire endowment at, say, Brandeis University, or Colgate University, or Vassar College. One year’s gifts!
It’s twice the (alleged) net worth of the British royal family.
I’m trying to think of a single private institution that needs your money less than Harvard. You want to do some good with your $1 million or $100 million? Don’t give it to the richest institution in the world. Give it to someone who needs it. There are colleges and schools and educational charities out there crying out for nickels.
(Harvard won’t say how much it’s lost in donations since this entire crisis blew up. Apparently, we’ll have to wait until the next annual report.)
But if the donors have baffled me, the alleged behavior of the Harvard board is also confusing.
Of all the possible reasons for Claudine Gay to resign — don’t email me; I’m not getting into it — surely the worst would be that donors wanted it.
What is the point of having a $53 billion endowment if you can’t tell hedge-fund managers to go jump in the Charles River? How much more do you need?
Harvard won’t comment. Fair enough. The university also points out that Gay resigned, and was not fired. As so often in these cases, it’s never entirely clear whether someone jumped, was pushed, or jumped before they were pushed.
And let’s be clear that Gay resigned after a confluence of several things: the events on campus after the Hamas attack on Israel, her appearance before Congress last month, and accusations of plagiarism that broke a few weeks ago. It’s impossible to know exactly how much of a role pressure from donors played in relation to everything else.
But I see hedge-fund billionaire Bill Ackman is now demanding that the entire board should quit.
You know what? The best reason for them to quit en masse would be if it turned out they were kowtowing to donors — including hedge-fund managers.
