[bretpiatt]

With their endowment above $50 billion, combined with Federal plus Non-Federal sponsored revenue at 16% of operating budget, it makes sense to me they just forgo Federal funds and operate independently.

If all 16% is canceled, then they'd need to draw an additional $1 billion per year from endowment at current budget levels.

That would put them above 7% draw so potentially unsustainable for perpetuity, historically they've averaged 11% returns though, so if past performance is a predictor of future, they can cover 100% of Federal gap and still grow the endowment annually with no new donations.

[robocat]

Republicans Are Floating Plans To Raise the Endowment Tax. Here’s What You Need To Know : https://www.thecrimson.com/article/2025/2/11/increasing-endo...

Proposed College Endowment Tax Hike: What to Know : https://thecollegeinvestor.com/52851/proposed-college-endowm...

  College endowments are typically tax-exempt, but a 2017 law imposed a 1.4% tax on investment income for a small group of wealthy private universities. A new proposal seeks to increase the endowment tax rate to 14%

Other article:

  proposing an 8.6 percent tax hike

When hacking the government rules is used against you.

[hnburnsy]

>A new proposal seeks to increase the endowment tax rate to 14%

That would be great that Harvard pays %14 on investment income on its 50 billion fund, considering I pay a minimum of 20% on my 'way less than $50 billion' in taxable investments, which was funded by my already taxed earnings, where as Harvard gets much of its endowment funds gifted to it.

[deepsun]

But I don't understand why 14%? It should be the same as you, 20%.

Same goes for religious organizations, but it would be extremely hard to enforce, as they might say "government is interfering us practicing our religion", as practicing religions helps to not pay taxes and protected by the Constitution.

[johnnyanmac]

>But I don't understand why 14%? It should be the same as you, 20%.

Taxing donations is really thorny. If people realize that the government is taking money they want to give away... they stop giving away money. It's a self-terminating cliche in action. So you either leave it alone if you want to encourage people stimulating charities, or you make the tax very small.

>Same goes for religious organizations,

I don't fully know. Some attempt at separattion of church and state. The government tries to maintain that except when other boundaries are crossed.

It does sort of fall into the same umbrella though, when regarding tithes.

[WrongAssumption]

There are several proposed bills, including one that raises the tax to 21 percent.

https://nehls.house.gov/sites/evo-subsites/nehls.house.gov/f...

[ookblah]

because then those churches and schools will just leave the US! /s

[yieldcrv]

if your argument is "but they're not getting screwed equally" then its a completely flawed argument benefiting the government

you should be questioning why you are getting screwed at all. it doesn't solve the government's revenue problems or even make a dent.

[glompers]

People already paid their taxes on all of the principal before they donated it to fund education. You and I are not chartered as an educational endowment; things like Roth IRAs exist for us.

[jcalvinowens]

> People already paid their taxes on all of the principal before they donated it to fund education

That's not true, the donations are tax exempt (deductible).

[johnnyanmac]

I think the point is that money for many was taxed before the paycheck ever came in. And you have no control over it. Part of your W-2 goes to fund social security, part of it to fund the federal, part of it to fund the state.

Taxing donations is just double dipping on your money. That's how you discourage donating.

[qwertygnu]

holy shit dog, you make over $533,000???

[Daneel_]

Expletive aside, I think they’re talking about their total investment rather than their income.

[Brian_K_White]

"funded by my already taxed earnings"

Why did you even try that? Blew your whole argument.

[johnnyanmac]

why do you disagree? Most people working a job do have taxes taken out. That's why you get a "return" when the IRS realizes they took too much or you provide other means to deduct your taxes.

[Brian_K_White]

The comment attempts to suggest that something is being taxed twice. It is not. The original income that funds some investment is taxed. After that, only further income is taxed. The existing principle is not.

Nothing that was taxed was "already taxed".

[JumpCrisscross]

Eh, colleges were originally religious institutions. (Harvard was founded to train clergy [1].)

Converting the Corporation to Harvard Church is about the least shenanigany thing I could think of in this tale.

[1] https://en.wikipedia.org/wiki/History_of_Harvard_University

[abirch]

This is genius. Next up, Apple could easily convert into a church with its many disciples.

[giardini]

And this is why I believe governments should tax nonprofit organizations!

[eastbound]

In France, we ran an NGO whose music festival got a bit big… a million or two of beer sales. Tax office came in and put that part of the NGO under the business rules, ie we paid and received VAT, paid the corporate tax at the normal rate, etc. We ended up putting the entire charity under the business rule because it was more profitable (saving VAT on all providers, while our donations were exempt of VAT).

I’m surprised USA doesn’t have a rule that industrial/commercial sections of any org is liable to all corporate tax laws.

[johnnyanmac]

we "sorta" do. It's an all in or all out matter with 501c3's. You declare a non-profit and essentially all your money needs to be funneled back to the company. There's many other regulations to prevent the most obvious means of fraud.

[Thorrez]

Well, a nonprofit cannot have owners. Apple has owners.

[blitzar]

OpenApple, a privately owned public benefit corporation.

[Thorrez]

Public benefit corporations have to pay tax.

[blitzar]

If they become a church they will have to buy private jets for the faculty.

[adfm]

No skin in the game, but curious to know why any Republican would want to raise taxes. Is this some sort of power play like the tariffs? Feels like they’re ghost riding the economy for the lulz.

[mmooss]

They don't care about taxes - they are happy to implement regressive taxes that disproportionately burden the middle class and poor, such as sales taxes, Social Security, etc. They just don't want to pay taxes themselves.

[andsoitis]

> They don't care about taxes - they are happy to implement regressive taxes that disproportionately burden the middle class and poor, such as sales taxes, Social Security, etc. They just don't want to pay taxes themselves.

A very large portion of the country vote Republican, and I would be surprised if they are by and large the most well-off part of the American public.

[t-3]

The voters are not the party and the party is not the party leadership. The actual policies that end up being supported have little-to-nothing to do with the stuff that gets talked about while campaigning, and this only gets more true the further away from the actual voter the position is.

[Aeolun]

Yeah. You can implement any policy you want if you can always blame the other party for it (and have your voters eat it up).

[ringeryless]

These voters were scammed. Many still don't realize or believe this, and they avoid real news for the purpose of keeping faith in the easter bunny they voted for.

[johnnyanmac]

And you are right... that's why "The Party" instead appeals to "the party" with various single issues (you know all the hot topics) and implement (or perhaps, pretend to implement) those while the real bills "The Party" want are passed under their nosess. "The Party" spends a dollar on "the party" while grabbing hundreds from the vault they all pitched into.

Worked for decades. Not so well when Trump so publicly tanked the economy and snatched one of the 3 untouchable things.

[pjc50]

It's about punishing their enemies.

> Feels like they’re ghost riding the economy for the lulz

Yes. The abstract of "the economy" doesn't matter. The priorities are "owning the libs" on Twitter and other media, and their own personal bank accounts which can benefit from insider trading the tariffs, state-sponsored memecoins and so on.

[soundnote]

Easy, Harvard is essentially a training center for their ideological enemies on top of providing an actual education. They're just putting the boot down and saying stick to teaching instead of implementing and advancing a specific ideology. If taxes are the tools, so be it.

[johnnyanmac]

Harvard is a private instutution. If they want to teach underwater basket weaving, there's not much you can do to stop that. Anymore than Trump can raid apple and tell them to start making Androids. I thought a billionaire businessman would understand that much; imagine if Clinton back in the day tried to seize Trump Towers.

And while we long forgotten: don't forget that all of this is illegal. to retract congressionally appropriated funds that were already budgeted. The time to yoink this stuff legally was a month ago.

[onlyrealcuzzo]

LoL - why it makes any sense to do this for universities and not billionaires is beyond me, but I'm sure half the country can explain it to me like I'm 5.

[Braxton1980]

The current admin is openly anti-intellectual.

Edit:

"We need to attack the universities in this country"

"The professors are the enemy"

Specific clip https://www.reddit.com/r/ABoringDystopia/comments/1ichg58/ya...

If you want the full speech it's on YT so if you reply with "context" you should back that up

[amiga386]

I'd agree with you that the current admin is anti-intellectual, but this speech is not a smoking gun.

For those who need spoonfed, here is the full speech: https://www.youtube.com/watch?v=0FR65Cifnhw

It's JD Vance's keynote speech at the 2021 National Conservatism conference. The speech, which I've just skimread, is mostly well-worn US conservative complaints about US higher education. He also talks about red-pilling because he's down with the kids, and he adds Jesus sprinkles in case you forgot he's Christian.

The speech is dull but it's bookended with two spicy statements, both of which you mostly quoted. The latter statement is not his words but a quote from Nixon.

Opening statement: «So much of what we want to accomplish, so much of what we want to do in this movement in this country, I think are fundamentally dependent on going through a set of very hostile institutions - specifically the universities which control the knowledge in our society, which control what we call truth and what we call falsity, that provides research that gives credibility to some of the most ridiculous ideas that exist in our country and so I'm excited to close this conference with this particular set of remarks, because I think if any of us want to do the things that we want to do for our country, and for the people who live in it, we have to honestly and aggressively attack the universities in this country.»

Closing statement: «I really want to end this on an inspirational note [...] and the person whose quote I ultimately had to land on was the great prophet and statesman Richard Milhous Nixon [...] there is a season for everything in this country and I think in this movement of National Conservatism, what we need more than inspiration is we need wisdom, and there is a wisdom in what Richard Nixon said approximately 40-50 years ago. He said, and I quote: "the professors are the enemy".»

EDIT: And for the context of the Nixon quote, it comes from a private conversation Nixon had with Henry Kissinger in the Oval Office on December 14, 1972, recordings of which were released in 2008: «Henry remember... we're gonna be around and outlive our enemies. And also, never forget, the press is the enemy. The press is the enemy. The press is the enemy. The establishment is the enemy. The professors are the enemy. The professors are the enemy. Write that on a blackboard 100 times and never forget it.». It's worth noting that Nixon was already keeping an "enemies list": https://en.wikipedia.org/wiki/Nixon%27s_Enemies_List

[Braxton1980]

It doesn't matter what Nixon's context was Vance was quoting him literally by proclaiming it a piece of wisdom.

Posting the entire speech only bolsters my view. For example

"[To accomplish goals].. I think are fundamentally dependent on going through a set of very hostile institutions - specifically the universities..."

I'm confused about your argument. I don't consider it a smoking gun just a concise example of what Vance and MAGA Republicans belive. There's no context confusion, it's on video, and it being dull only shows how comfortable he is exposing insane views.

[amiga386]

The spicy soundbites on their own are scary and do suggest the state wants to destroy intellectuals.

The speech they're from doesn't.

The speech defends and praises universities and their role in society. Vance even claims some academics prefer to ignore evidence that refutes their positions, and he's against that; that would be a valid pro-intellectual position if true (but it's completely nebulous and unsourced)

The thesis of his speech was he doesn't like the content of what academics profess and he thinks they ought to teach his political views (and his audience's political views) instead. That's not anti-intellectualism, i.e. "don't trust those book-learning types, look to the common man for answers". This guy still wants ivory towers provided his cronies are in them.

Also it's interesting to see where his quote came from. He clearly picked an on-theme Nixon quote just to appeal to his audience, and he seems to miss the context of the Nixon quote in that Nixon is a paranoid nutter saying it, not coming from a rational place like Vance thought he just did.

[imgabe]

Current universities are openly anti intellectual.

[Braxton1980]

What evidence do you have of this?

[imgabe]

What evidence does the parent comment provide?

[gaze]

if you hate universities it makes obvious sense

[aikinai]

I’m not half the country, but I can explain it to you. Billionaires already pay tax on investment income. Universities are exempt but now the proposal is that they pay as well, just like individuals (including billionaires) and other profit-making groups.

[VincentEvans]

… or churches

[radicaldreamer]

Politics of resentment where elite colleges and universities are unjust scams and billionaires are just the pinnacle of self actualization.

[pqtyw]

Doesn't this tax only apply to "net investment income"/realized gains? Billionaires technically already have to pay it at a higher rate. And well they generally do? I mean when they personally actually sell stock and or receive dividends and interest.

[andoando]

Most of the wealth being in stock is really tricky. You can't really tax stock ownership, but at the same time stock can be leveraged against business deals (Musk for example bought Twitter with largely stock, without having to sell it first and therefore being subject to tax), and you can take out loans with stock as collateral.

[arrosenberg]

It's not that tricky. All you have to do is make it a taxable event to collateralize stock.

[twoodfin]

Should we similarly tax collateralizing real estate as in home equity loans?

[phkahler]

How? That makes little sense to me from an implementation standpoint.

[overrun11]

Why does it matter? It eventually gets taxed through estate tax and at a higher rate than income. This obsession with taxing them _now_ only makes sense if the point is to punish the the rich.

[peterbecich]

Agreed. For the revenue tax activists want from billionaires, it would necessitate a wealth tax, which I believe is unconstitutional. The non-profit tax exemption fight is about "income taxes" which billionaires already have to pay (but avoid). So it is an apples-to-oranges comparison.

[triceratops]

> it would necessitate a wealth tax, which I believe is unconstitutional

I take it you haven't heard of property taxes.

[peterbecich]

I'm not a lawyer but I do not consider a property tax to be the same thing as a wealth tax.

If I own a house or condominium in San Francisco, at a fundamental level I do not own the land or space the residence is sitting on. "Ownership" is basically a lease of the parcel from the city. The house structure is an improvement on leased land; this ties the property tax calculation to the value of the structure. The property tax is the rent on the land/space. I believe this is the constitutional justification for property taxes (no opposition from me).

[zeroonetwothree]

The Supreme Court explicitly allowed property taxes in Pollock decision. They haven’t for wealth taxes (they still might allow it but they also might not).

[pclmulqdq]

A federal property tax is also unconstitutional.

[nrclark]

what is unconstitutional about a wealth tax?

[rufus_foreman]

>> what is unconstitutional about a wealth tax?

Article I, Section 9, Clause 4:

"No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken"

A wealth tax is generally considered to be a direct tax. If you wanted to enact one at the federal level, my understanding is that it would have to be done in proportion to the census. So, given that Mississippi is around 1% of the total US population, Mississippi would have to pay 1% of the wealth tax. Mississippi is the poorest US state, so that would be a very regressive tax.

An income tax is also considered to be a direct tax, that's why it took an amendment to the Constitution to enact one.

The Constitution applies to taxes at the federal level, not state. States could enact a wealth tax the same way they enact property taxes now (depending on their state Constitutions). The problem for them is that wealth is a bit more mobile than property.

And yes there are arguments about what a direct tax really meant in the language at the time the Constitution was written, there are arguments that the income tax should have been legal without an amendment. But that's not how it went down.

[zeroonetwothree]

It’s not totally clear if it would be but here’s a summary: https://city-countyobserver.com/the-constitutionality-of-a-w...

[peterbecich]

I'm not a lawyer but my reasoning is this:

- as far as I know, double taxation by any given entity (Federal Gov) is unconstitutional

- a given dollar is taxed once as income. A federal wealth tax on the remainder of that dollar would be double taxation.

That does not prohibit the Federal Gov from taxing once, and your residential state from taxing you a second time.

There are other arguments about "direct taxation" I don't fully understand.

[johnnyanmac]

Why do you expect a billionaire to steal from billionaires? a portion of non-essential stealing comes from respct, and of course these billionaires are all a part of the same club.

The other lens is simple as well: big fish don't go after the other big fish. That just ends in two hurt fish and no food. Trump thought he was going after a small fry and underestimated the response. just because Columbia folded doesn't mean all universities will.

lens #3: this clip explains it well: https://www.youtube.com/watch?v=VLbWnJGlyMU

He's a bully but if everyone realizes they outnumber (and outmatch him) he loses his power).

[WalterBright]

Billionaires do pay income tax on investment income.

[triceratops]

If they sell and incur capital gains. But they have so many better alternatives than you or me. And if they do incur capital gains they pay the same tax rate (or maybe 5 basis points higher, depending on your income) as you or me.

[WalterBright]

What alternatives are those, that enable realizing income without incurring income tax?

[triceratops]

Borrowing against assets. Wealthy people get low, low rates, much lower than the hoi polloi would get on a HELOC or brokerage account margin loan. Banks like having them as clients.

[ajross]

Only short term gains are taxed as income. Long term capital gains tax caps at 20%, wildly lower than the top income tax bracket of 37%. And it's always possible to defer short term gains (e.g. put your trading money in an IRA).

[throwaway-blaze]

IRA contributions are drastically limited to a $7000 cap per year under 50. Whether they should be is another question, and one worth exploring.

Long-term investment is rightly seen as something to be encouraged hence the lower tax rates. You can make the argument that the rate should be more like 0% since the money invested and risked was already taxed most likely...20% is a reasonable value for the market regulating infrastructure provided by gov't entities.

[UncleMeat]

IRA caps are low, but loads of people earning enough that they'd reasonably save more than 7k annually have access to 401ks or similar accounts that raise the annual cap to >30k, vastly more than the typical person is saving.

The middle class isn't taking advantage of low capital gains rates to earn more from their taxable brokerage accounts because they haven't even filled up their tax-advantaged accounts.

[ajross]

There are loopholes to roll all sorts of nonsense into an IRA though. There was a whole news cycle in the 2012 election about Mitt Romney's $4M "IRA" or somesuch. And IRAs are hardly the only shelter from income tax, they're just the most obvious.

The simple truth is that wealth beyond the ~$10M level in the US pays essentially zero "income tax". It just doesn't happen, no one does it. Short term gains are only taxed for small investors who don't know any better.

[sunflowerfly]

Not at rates anywhere near tax rates on wages of a middle class worker.

[rtp4me]

Because investment income is not the same as wage income. Nor should they be.

[brewdad]

Why not? Money is fungible. A dollar is a dollar. Why should investment dollars be taxed less than those earned through the sweat of one's brow?

[cactacea]

So we can tax it at a higher rate? Couldn't agree more.

[WalterBright]

Short term dividend income is taxed at the same rates as wage income.

[Sonnigeszeug]

When i needed money for a house, without a good security i had to pay 1.6 and with 0.8.

Rich get richer, poor never see this advantage.

[zeroonetwothree]

Billionaires do not get a tax exemption

[killjoywashere]

No but their earnings are mainly in their companies, and those can hire fleets of tax attorneys and accountants to crush their tax burden.

Once the money is in stocks, it doesn't get taxed unless you draw on it, but the billionaires can use strategies like buy, borrow, die (which last I checked only really works if you're north of ~ $300M) to avoid personal taxes.

[Retric]

Billionaires benefit most from the largest tax exceptions. No tricky accounting needed it’s baked blatantly into the tax code. Long term capital gains are specifically lower than short term capital gains. Further gains are only taxed on sale allowing a lifetime of growth to pass to the next generation tax free.

They also operate at a scale where many tax breaks become viable. CEO owners aren’t paying themselves nominal salaries because they are actually working for free. Creating a shell company to own your 50k car isn’t useful but it’s damn well worth it if you’re buying a 50+m dollar yacht for personal use. Turning depreciation into a nominal loss offsetting capital gains etc.

Meanwhile people of lesser means get stuck with all kinds of crap like a 10% early withdrawal penalty on 401k plans.

[palmotea]

>> College endowments are typically tax-exempt, but a 2017 law imposed a 1.4% tax on investment income for a small group of wealthy private universities.

> LoL - why it makes any sense to do this for universities and not billionaires is beyond me, but I'm sure half the country can explain it to me like I'm 5.

Because they already do it for billionaires: unlike university endowments, billionaire investment income is not tax-exempt by default, it's already subject to income tax [1].

[1] At least theoretically, ignoring the loopholes and tax-dodges billionaires can take advantage of with literal armies of accountants.

[hnburnsy]

Billionaires pay 37% or 20% on their investment gains, can't really explain it to a 5 year old because congress and the IRS make it complex.

[radicaldreamer]

They don't pay anywhere close to that, there are tons of tricks to avoid paying that % on gains and the more money you have the more leeway for loopholes.

Very relevant in startup ecosystem as well (look up exchange funds, opportunity zones etc.)

[WalterBright]

40% of Federal income tax revenue comes from the top 1%.

[rurp]

Imagine how much federal revenue would increase if that 1% paid the same effective rate as say a typical plumber, rather than the <10% they currently pay. That might actually put a dent in the trillions of dollars this congress is about to add to the national debt.

[triceratops]

What percent of all income do they make?

Edit: it's an honest question. Maybe the top 1% paying 40% of all income taxes is too much tax. Maybe it's not enough. Without knowing how much of all the income they make it's a meaningless number.

[caslon]

The top 1% of people make 20.7% of the country's income. Given progressive tax rates, they should be paying a lot more than 40% of Federal income tax revenue, but rates don't scale enough, and aren't lax enough on other classes.

[stolati]

https://nymag.com/intelligencer/article/fact-check-richest-1...

[specialist]

That seems excessive.

Corporations are persons, right? Why is their tax rate just half that of real people?

Why aren't all persons taxed equally?

[chris_wot]

The top 1% own 39% of everything in the U.S. You are not in the top 1%. Why are you complaining again?

[eli_gottlieb]

If they don't wanna pay so much in taxes, they should stop having so much money. Taxes function to raise revenue and thus have to go where the money is.

[Jabbles]

This conversation is about billionaires, not the top 1%.

[hnburnsy]

There are no loopholes for investment gains. If you are talking about offsetting losses and delaying gains, those options would likely be available to endowment funds.

[__jl__]

I think the 9 billion is very misleading. More than half goes to hospitals affiliated with Harvard. I am not sure but I don't think they get anything from the endowment. The impact of loosing this money would be very uneven across different parts of the university and hospitals affiliated with it.

The faculty of arts and science would be fine. Yes, some cuts, a hiring freeze etc. The med school and public health school would feel a big impact. They employ so many people on "soft money" through grants including many faculty members.

The hospitals are a different story and I am not sure why they are even lumped together.

[tootie]

Yeah this isn't purely a question of Harvard's P&L being dependent on subsidies. The money in question is grants attached to specific practices or research. The money isn't just gratuity for Harvard being so great, it's awarded for specific objectives that Harvard was deemed capable of delivering. Cutting off the money isn't going to hurt Harvard, it's going to stop all the programs the grants were funding.

[wmf]

Stopping those research programs is a choice. They could also choose to pay for them out of the endowment.

[acmj]

People here have little idea about how Harvard works. Harvard is financially vulnerable. It is currently running on a deficiency considering the endowment. And Harvard can't freely use most endowment for personnels anyway. If the government takes away funding, Harvard will have a financial crisis. I guess the leadership made the decision in hope someone could stop the government before bad things happen but when bad things do happen, you will probably see mass layoffs of researchers in particular in life sciences and biomedical research.

[aoki]

I mean, we literally just saw what happened at JHU when their USAID funding vanished. Everybody on that soft money got laid off.

That’s what makes stands like this hard for admin: you’re risking massive layoffs in the programs that are often the least political to defend the academic freedom of the programs that are often the most political. Columbia made one decision. Harvard is making another. You could make Lord Farquaad jokes here, but if it alone loses its federal funding in these expensive research areas, it will lose its preeminence in those areas for a long time.

[acmj]

I guess Harvard saw the decision at Columbia made the situation worse [1], so they decided to make a different one.

[1] https://www.science.org/content/article/nih-freezes-all-rese...

[saagarjha]

Some universities should make sacrifices for academic freedom, yes. That's what they are there for!

[acmj]

I wouldn't say this easily if I were the sacrifice, especially as a visa holder.

[rtp4me]

With $50B in the endowment, how are they financially vulnerable? Honest question.

[tmpz22]

Much of the endowment is earmarked towards specific ends. It is not a slush fund for discretionary spending.

[firesteelrain]

Earmarked implies discretionary so it is discretionary

[TeaBrain]

That's not what discretionary means in this context. The funds having been originally earmarked at the discretion of the originator, means they are no longer available for any purpose at the discretion of the trustee, meaning they are no longer discretionary. You are confusing the funds having once been earmarked at someone's discretion for their being discretionary, which they haven't been since the point when they were earmarked at the originator's discretion.

[jakelazaroff]

Most of it is not discretionary, no matter what words random Internet commenters use to describe it.

[firesteelrain]

I am replying to the GP. GP must be mistaken. It was Harvard’s choice to operate this way financially

[janalsncm]

This might be true for Harvard, but I don’t think free speech should only be for those who can afford it. I know my school couldn’t if the government came knocking.

[silexia]

Harvard is free to say whatever it wants and operate without government funds. A shocking idea may be for a school to actually use the tuition paid by students to educate them.

This is forced speech for all those of us who disagree with Harvard's politics and yet have our tax dollars sent to support it anyways.

[NovemberWhiskey]

That’s a very odd perspective.

Could you explain how government research funding constitutes forced speech?

If an individual who receives a government tax credit (say EITC) speaks out contrary to your politics, is the government allowed to withhold that credit too?

[silexia]

My money is taken from me at gunpoint by government forces I cannot resist without facing life in prison. I don't want this money going to random causes I disagree with. The government should be far smaller or we cannot have rights as the government will intrude on us more and more.

[CogitoCogito]

> I don't want this money going to random causes I disagree with.

There certainly is _no_ government spending supported by _all_ Americans, so your position isn't a very practical approach to governance.

[silexia]

Lots of government spending is supported by the vast majority of Americans. Police, courts, fire, ambulance, and military (though size is up for debate).

[ericjmorey]

1st Amendment is more important than you not liking a specific spending of government funds.

[rurp]

Somehow I doubt you would apply these same principles to someone who doesn't believe in police and objects to their taxes being used to fund them.

[silexia]

Republicans won the presidency and both branches of the legislature. The people voted for their money to no longer be spent foolishly.

[lukas099]

So you support impinging on free speech as long as the majority of voters is against something? That's exactly the kind of thing the Constitution is meant to prevent.

Or do you agree that it is not a violation of free speech to fund police when there are citizens who disagree with it? You can't have it both ways.

[tacticalturtle]

I posted this deep in another part of this discussion - but the majority of the money being discussed here isn’t really for Harvard or educating its students - the largest portion are for NIH grants funding to Boston area hospitals, most of which have affiliations with Harvard Medical School.

> The Crimson analyzed the proposed Trump administration funding cuts and estimated that the five hospitals’ multi-year commitment from the NIH is over $6.2 billion and the University’s multi-year federal research funding exceeds $2.7 billion.

https://www.thecrimson.com/article/2025/4/4/funding-review-h...

I’m sure that you have legitimate issues with politics at Harvard, but penalizing a number of independent non-profits that serve the community because they associate with a University that the administration disagrees with also seems to be forcing speech.

[silexia]

I don't want the government to fund any of that. The government should be far far smaller. The bigger the government is, the less rights you have.

[iAMkenough]

Just watch what happens when they exercise their Constiutional right to "say whatever it wants."

Stephen Miller made it clear this morning: "Under this country, under this administration, under President Trump, people who hate America, who threaten our citizens, who rape, who murder, and who support those who rape and murder are going to be ejected from this country."

If the government decides you "hate America" or your business supports some hypothetical rapist/murderer they imagined, you're going to end up ejected from this country without due process.

[jakeydus]

They're absolutely teeing up to be able to deport whoever they want. Reasonable people should be (and are) very afraid.

[silexia]

Irrelevant and without basis.

[frm88]

Basis: words of the president on various different occasions, for example Trump wants to send U.S. citizens with criminal records to be imprisoned in EL Salvador.

https://apnews.com/article/trump-citizens-prison-el-salvador...

Relevance is subjective.

[jakeydus]

That's just how government works, buddy. I disagree with my tax dollars being spent to shoot wild horses and fund Lockheed-Martin, but here we are. It's not forced speech, because you have representatives who (in a working system) you could ask to fight against tax dollars being spent on something you dislike. You have a voice, you just don't get to have the only voice.

[silexia]

The majority of Americans elected Republicans specifically based on their platform of eliminating waste and corruption like these funds that go to Harvard and directly fund anti Asian discrimination. The President is simply following through on his mandate. Why do you oppose democracy?

[lukas099]

Democracy doesn't mean that a plurality of voters in a single presidential election gets to overturn the Constitution and established law.

[TheBicPen]

Communicating to elected officials that you will not vote for them if they continue their current behaviour is not anti-democracy, it's the main feature of democracy. You are actively participating in the democratic process by doing so.

[GuinansEyebrows]

i disagree with you but i still think you should be allowed to drive on public roads and access publicly-funded health care that are funded by my tax dollars.

[throwway120385]

Okay, disband all of CBP and then we can talk.

[inglor_cz]

They could also possibly fire some administrators. Not every vice-provost out there is strictly necessary.

Just a few years ago, Harvard Crimson carried an op-ed complaining about the bloat:

https://www.thecrimson.com/article/2022/11/29/anderson-burea...

[inglor_cz]

Cannot edit my original comment, because I wrote it 16 hours ago, but I am somewhat surprised by the fluctuating up/downvote count, going from 0 to 6 and back.

It seems that the very idea that some employees in academia might be superfluous is very disagreeable for some HNers.

Why? Institutional bloat is a well known problem, it happens in private sector, public sector, churches, military, wherever you can think of. It probably already happened in Ur and Nineveh. Why should academia be somehow immune from this problem?

And if it is not immune, shouldn't it try to do something with it?

There was a massive increase in tuition in the last generation or so. How much of that extra money goes to the core mission of the universities, and how much is spent on "nice to have extras", starting with opulent campuses and ending with "Standing Committees on Visual Culture and Signage"?

Everyone has to trim the fat down a bit from time to time. Even Google and Meta. Why not Harvard.

[oldprogrammer2]

People are reflexive. In a different context, driven by someone else, many of the people currently defending Harvard would instead be pointing out that Harvard and the other elite institutions are part of "the problem". In general this year, it's been interesting to me to see Republicans become protectionists and Democrats become neoliberal free traders, both parties flipping their talking points to either align or disagree with Trump.

[kelipso]

People in HN have been complaining about university admin bloat for many years. In this thread, the problem is it’s political and people struggle with the cognitive dissonance about that stuff.

[gruez]

This article lists out why it's not good of an idea as you think.

>Universities’ endowments are not as much help as their billion-dollar valuations would suggest. For a start, much of the money is reserved for a particular purpose, funding a specific professorship or research centre, say. Legal covenants often prevent it from being diverted for other purposes. In any case, the income from an endowment is typically used to fund a big share of a university’s operating costs. Eat into the principal and you eat into that revenue stream.

>What is more, eating into the principal is difficult. Many endowments, in search of higher income, have invested heavily in illiquid assets, such as private equity, property and venture capital. That is a reasonable strategy for institutions that plan to be around for centuries, but makes it far harder to sell assets to cover a sudden budgetary shortfall. And with markets in turmoil, prices of liquid assets such as stocks and government bonds have gyrated in recent days. Endowments that “decapitalise” now would risk crystallising big losses.

More worrying is the fact that the federal government can inflict even more harm aside from cutting off federal funding:

>the Trump administration has many other ways to inflict financial pain on universities apart from withholding research funding. It could make it harder for students to tap the government’s financial-aid programmes. It could issue fewer visas to foreign students, who tend to pay full tuition. With Congress’s help, it could amend tax laws in ways that would hurt universities.

https://archive.is/siUqm

[forrestthewoods]

if a $50,000,000,000 endowment can not be used to smooth things over in times of need or turbulence then the endowment managers need to make changes.

You can not possibly convince me that Harvard’s endowment doesn’t trivially have one year of liquidity in it.

I’m sure it’s not structured to handle a 7% annual draw down for the next 30 years. But it’s got plenty of time to restructure if needed.

[crazygringo]

The point is, it's eating your seed corn.

Spending a billion of it is not just spending a billion. It's spending the many billions it was meant to provide, in interest, over the next decades.

It's extraordinarily expensive to spend it directly, as opposed to spending the income it generates.

You can certainly do it, in a true emergency. But you certainly don't want to make a habit of it.

[empath75]

> The point is, it's eating your seed corn.

I've seen arguments of this general shape and form many times about this, and yes, this is true. In general, Harvard should not spend down it's endowment when it has other sources of revenue.

I think the issue here is that this _is_ an emergency. Harvard should consider that Federal money gone for the near future and spend and plan to spend as if they will not have it. There is no point in them continuing to exist as an institution if they accede to these absurd demands.

[davorak]

> You can certainly do it, in a true emergency.

This seems to qualify for many people though. Less pain than complying in many minds I am sure.

[unclebucknasty]

>You can certainly do it, in a true emergency. But you certainly don't want to make a habit of it.

Harvard's endowment returned 9.6% last year, growing the total by $2.5 billion. In the previous year, the endowment returned 2.9%, though the total endowment decreased as the gain was offset by contributions to operating expenses. [0]

In other words, Harvard already operates somewhat from their endowment, and can realize net endowment gains in spite of that.

[0] https://www.harvardmagazine.com/2024/10/financial-report-fis...

[gruez]

>In other words, Harvard already operates somewhat from their endowment, and can realize net endowment gains in spite of that.

The argument isn't that Harvard should never draw from its endowment, like it's saving for retirement or something. The argument is that they shouldn't raid endowments by doing additional withdraws to fund the current shortfall.

[unclebucknasty]

>The argument isn't that Harvard should never draw from its endowment, like it's saving for retirement or something

The argument I was replying to was actually of exactly this form.

That argument also implied that any endowment spending to cover shortfalls would necessarily be of the principal, but that is also incorrect.

In fact, the White House just responded with a $2.2B funding freeze—an amount that would have been covered by last year's endowment return.

[forrestthewoods]

> the many billions it was meant to provide, in interest

THATS WHAT WHAT THE FIFTY BILLION IS

It’s a war chest that has been carefully cultivated over decades. The fifty billion is the result of a hundred years of investment and management.

If it can’t be spent now then when the fuck exactly can it be spent? In 200 years you’d still be saying “this is the seed corn for tomorrow!!”

I’m not saying burn it down to zero. But the whole fucking point of an endowment is to provide stability during trying times. If you can’t use the interest that has been accumulated now then when the fuck can you??

[crazygringo]

No. You misunderstand endowments.

Their principal is not intended to be spent, ever. The point of an endowment is not to "provide stability during trying times".

The point is to spend the interest that it generates, in normal times, in perpetuity. Which Harvard already does and has always done. Interest from their endowment is already a large part of their revenue. That's what the endowment is for.

[forrestthewoods]

How much is the principle? Because I bet you $3.50 it’s multiple billion less than the current balance.

[saagarjha]

> The point is to spend the interest that it generates, in normal times, in perpetuity.

Yes, but these are not normal times.

[xienze]

> The point is, it's eating your seed corn.

How much is “enough” money to hoard in an endowment though? We hear lots of arguments about how the concept of a billionaire is itself obscene, why can’t we apply to same logic to institutions? E.g. much like people say “billionaires shouldn’t exist”, perhaps endowments over some similarly arbitrary value shouldn’t exist either.

[crazygringo]

Well, it's proportional to their spending to some degree. It takes a world-class endowment to fund a world-class university. And it's all from private donations.

Harvard doesn't make a profit. It educates students and does research. It sounds like you're arguing Harvard should be broken up or something? But based on what? Is it abusing its power or something?

[JumpCrisscross]

> it's eating your seed corn

Paraphrasing J. P. Morgan, the man, in the midst of the Panic of 1907 reassuring a banker concerned about dipping into reserves to pay out depositors: "what are reserves for if not times like these."

Eat the seed corn. Fight. Then raise unencumbered donations from the billionaires whose balls haven't fallen off. If Harvard plays this correctly, they could become one of the flag bearers of the legal and financial resistance to Trump.

[Finnucane]

To some degree it already has been. After the economic genius Larry Summers paid for the Allston campus expansion with some dodgy loans that blew up in their faces during the 2008-9 financial crisis, there was some attempt to reform the endowment, back off some risky investments, and build up more of a free-cash emergency fund. This actually paid off during the Covid lockdowns, which the university was able to weather without too much disruption.

The other oddity of Harvard's endowment is that each school at the university basically has it's own fund--so that for instance, the Business school and the Law school don't have to worry about money the same way that FAS (the main undergraduate school) does.

[pc86]

Not to mention all those legal covenants have another party to them - they're not written in stone. I'm sure a good number of them would be willing to considering loosening legal restrictions if it would really help.

[ThrowawayR2]

Endowments have come from people over the entire history of the institution. The vast majority of the endowers are likely deceased and won't be able to agree to change the terms of their endowment.

[pc86]

And yet some trust, estate, or descendant somewhere ultimately has the authority to change those agreements. These things are not immutable facts of the universe, they can be changed.

As for the minority where that is not the case, it also means nobody will have standing to sue if the school decides to stop letting someone who died 200 years ago decide exactly how Harvard's money will be spent.

[beerandt]

They made a big fuss a few years ago about what I read imo as over investing in foreign farm land, esp south America and Africa. Which seems to have completely flopped, if not yet realized.

At this point, you really do have to question whether each university hire was merit based or not, including the fund managers.

[kjellsbells]

I don't know that making a bad investment makes them terrible fund managers, just as making a good one would not make them brilliant. Don't you need a string of data points?

If you are going to claim that they were not hired on merit, and that they are bad investment managers, you'll need to provide a lot more evidence on both points, rather than a "just asking questions" post on HN. Otherwise, it's just snark and not in keeping with HN's ethos.

[hnburnsy]

>...much of the money is reserved for a particular purpose

I would assume that a tax on an endowment would be like a capital gains tax, i.e., taxed on the investment growth. Is the growth 'reserved for a particular purpose'?

[gruez]

It's reserved because the donation was earmarked for a specific purpose (eg. a business program or whatever), not because they reserved 30% on tax owing.

>Is the growth 'reserved for a particular purpose'?

It's probably safe to assume donors are competent enough that such glaring loopholes don't exist. After all, the concept of endowments being used as long term savings, rather than spent immediately, isn't exactly a new concept. Failing to take this into account would mean any earmarks are void after a few decades.

[firesteelrain]

It’s never a guarantee when it comes to government funding. It can come and go at any time. Take the politics out of it, Harvard has been operating at risk with this funding source for some time.

[Obscurity4340]

He's not gonna be happy they can operate financially without his assent

[bilbo0s]

He still controls the congress, the white house and the supreme court. So he could potentially pull a completely illegal fast one and freeze their accounts. Since rule of law seems on fairly shaky ground right now in any case.

[alabastervlog]

He may issue an EO against them similar to the ones he's successfully used to bring major law firms he doesn't like to heel: ban consideration of former Harvard employees (... maybe also graduates?) for Federal jobs, revoke clearances held by anyone employed by Harvard, and ban them from Federal property. Maybe with some other creative terms thrown in to mess with universities in particular.

[JumpCrisscross]

> ban consideration of former Harvard employees (... maybe also graduates?) for Federal jobs

Oh, those federal jobs he’s been DOGEing for the past weeks in an attempt to demotivate folks out of them?

This administration’s incoherence comes back to bite it in the ass again.

[SoftTalker]

That is always a risk of working for the government. Your job exists more or less at the whims of the currently governing administration.

[unclebucknasty]

>Your job exists more or less at the whims of the currently governing administration.

Perhaps in theory, but not in practice as a historical norm. And, certainly not for "standard" non-appointed, bureaucratic roles.

It's important that we don't normalize what we're seeing here, in terms of quality or degree.

[const_cast]

No, this is not the case. This is a recent and never before seen phenomenon. Please, do not try to downplay it. And, if you do, do not do it dishonestly.

[ajross]

That has essentially never been a risk for a non-appointed government employee in the United States of America, at least for the past century or so. We Don't Politicize the Bureaucracy. And that was at least in part the secret sauce to our generational success, that we could immunize the workings of the government from the pique and emotion of its leadership.

Or we didn't. Now we do. Kinda sucks.

[ethbr1]

Since ~1885 and the Pendleton Civil Service Reform Act: https://en.m.wikipedia.org/wiki/Pendleton_Civil_Service_Refo...

Submitted some historical breadcrumbs here: https://news.ycombinator.com/item?id=43686221

[SoftTalker]

Well this was advice my father (an academic and lifelong straight ticket Democrat) gave me decades ago. So it was nothing specific to the current administration.

[JumpCrisscross]

> he could potentially pull a completely illegal fast one and freeze their accounts

Harvard (and most institutions and powerful individuals) would be smart to maintain liquid assets and a bank account outside America’s control.

[outer_web]

Maybe their endowment is held in treasurys they should start selling off...

[bilbo0s]

LOL

I like the way you think!

[colechristensen]

>a bank account outside America’s control

There really isn't such a thing if you want to do business in America. If you're in the US and doing business with a bank, the courts can order that bank to do things or face isolation from the entire financial system.

[JumpCrisscross]

> There really isn't such a thing if you want to do business in America

There are to varying extents. You want a country that isn't aligned with or dependent on America, but also isn't its adversary. (And which has a good banking system.) That list was classically Turkey, the UAE and Switzerland. Today I'd add India, Qatar, Canada and Brazil and remove Switzerland.

[Boldened15]

Yeah I'm no expert in financial systems but since the money ultimately needs to be spent in the U.S. it doesn't seem that important whether the funds are frozen in the U.S. or locked away overseas and can't be transferred in for the next ~4 years.

[colechristensen]

It's much more than that, foreign banks will comply with US court orders, it's not just a blockade.

US courts shut down a series of Swiss banks that were trying to hide American's assets behind the swiss banking secrecy laws while also doing business on American soil (just having bank employees in the country did it).

[JumpCrisscross]

> since the money ultimately needs to be spent in the U.S. it doesn't seem that important whether the funds are frozen in the U.S.

Of course it does. The hypothetical we're considering is the administration illegally freezing bank accounts. You don't need something legally impenetrable. Just complicated enough that it slows down the goons while you fight them in court.

[bilbo0s]

This is true, and they have likely been accelerating the arrangements they already had for a while now. At the same time however, getting 50 billion in assets into various European jurisdictions is not at all easy. I'd estimate Trump could cut off 70-90 percent of what Harvard has to work with.

Alumni will need to come through for continuing operations if the worst does happen. And I'm certain Harvard has put some thought into that contingency as well.

[bgarbiak]

Trump can make that illegal in no time. „No foreign funds” is a well known method of fighting opposition, tried and tested in many soft regimes (looking for a recent example, Hungary comes to mind).

[chairmansteve]

Bitcoin!

[qingcharles]

I mean, it turns out the fed has the power to pull any money from any account they wish, at any time, like they recently did with NYC.

[sandworm101]

This is about lots more than money. Sure, Harvard can go without federal funds. Then comes federal tax breaks. Then Harvard's ability to recruit foreign students (no visas, no foreign students/professors). After that comes the really draconian stuff like the fed revoking clearances or not hiring/doing business with Harvard grads. Such things were once thought illegal but are now very much on the table. That is why Harvard needs to win the money fight no matter the numbers.

[morkalork]

Right, money is just the first and most obvious cudgel. Does Harvard have any biomedical labs that require federal approval to handle hazardous materials? That could be delayed or revoked. Do they file taxes? They could face an audit. There's no shortage of painpoints an organization that large has exposed to an unethical government.

[benrapscallion]

Harvard affiliated hospitals are dependent on NIH funding for survival. Wonder if they are included in the scope of this.

[mikeryan]

NIH falls under HHS, and the HHS acting general counsel was a signatory on the original letter.

That said, affiliated hospitals are not owned or operated by Harvard.

The affiliates could be pushed to drop their affiliation if NIH wanted to play hardball with Harvard.

[benrapscallion]

According to NYT, “ of the $9 billion in federal funding that Harvard receives, with $7 billion going to the university’s 11 affiliated hospitals in Boston and Cambridge, Mass., including Massachusetts General, Boston Children’s Hospital and the Dana-Farber Cancer Institute.”

[paulpauper]

80% of the endowment funds are heavily restricted as per donor requests and cannot be used unconditionally.

[hnburnsy]

Could you give us some of these restrictions? This seems like a BS excuse to not support the students.

[forgotoldacc]

If I give a school 20 million yearly to research a specific form of cancer, and I find out that they instead used that money to upgrade the plumbing in their dormitories and spent nothing on cancer research, I would not give them 20 million ever again.

Sure, due to funding cuts students will suffer with slowly degrading infrastructure and will need to do plumbing fixes at some point. But that doesn't mean people who give them money for one purpose are happy with it being used for another purpose.

[kristjansson]

You might even form a contract with the institution obligating them do certain things with your gift

[kristjansson]

This is absolutely par for the course for university endowments. They're not big pots of money, they're thousands of small pots of money with various restrictions on their investment, disbursement, etc.

[hnburnsy]

Not asking for the breakdown, wondering what some of those restrictions look like and whether they support the students with those restrictions.

[kristjansson]

For a quick institution specific overview, see “with donor restrictions” on page 20-21 (pdf page 21-22) of their most recent annual report[0].

I’d imagine “maintain and invest the original contribution in perpetuity” covers majority of the restricted funds, with use-specific restrictions in a distant but comfortable second. Since it’s Harvard, they probably also have more funky restrictions than the average bear (gifts of stock in kind with restrictions on timing of sale, voting, etc.).

[0]: https://finance.harvard.edu/files/fad/files/fy24_harvard_fin...

[hnburnsy]

thx

[firesteelrain]

Harvard has sat on $53B tax free leveraged 40% into private equity and now might have to panic sell because their VIP status got clipped? Color me surprised.

[ren_engineer]

those endowments, especially for the Ivy League schools, aren't liquid at all. They'd take a massive haircut if they had to start pulling funds from it

[Marsymars]

Presumably they could go to a large bank and make a deal so that they only have to take a relatively small haircut by getting a loan to be paid back from endowment interest.

[hnburnsy]

If this is the case then they really are not for the benefit of students?

[fma]

Harvard is probably thinking they just need to draw the $1 billion extra for another 4 years. Unless, Trump runs for a 3rd time which he has floated. If that happens then I think everyone's just screwed.

[formerly_proven]

With an overbearingly powerful executive like the federal US executive you can come up with so many ways to fuck with companies or institutions like this one beyond not giving them money.

[tremon]

It's very dangerous to assume "oh, this will only last four years". The rights currently being eroded (free speech, habeas corpus and voting rights themselves) are required for free and fair elections. Even if the term of the current Shitstain In Chief ends when it's supposed to, his replacement will be from the same cloth.

[throwway120385]

I'm sure he's got plans to issue an executive order declaring all of the votes against him null and void because they weren't cast and counted within 4 hours of each other on election day.

[bitcoin_anon]

I agree. Also, the quality and independence of the research will improve when it is funded outside of government influence.

[jmye]

Which is, of course, why the internet is a spectacular failure and SpaceX is our best chance to ever put a man on the moon, and polio is still ravaging the country. Great point.