February 4, 2008

Money and the Ivy League

Saw this article today:

http://www.nytimes.com/2008/02/04/education/04endowment.html

It's about the enormous amount of wealth amassed by Harvard and other Ivy League schools. I've seen a number of articles discussing this topic. I'm not sure what the solution is.

One thing which struck me in the article though is this statement:

“These institutions continue to build up their kitties,” said Representative John F. Tierney, Democrat of Massachusetts. “They say it is the schools’ money. But it is not all the schools’ money. Some of it is. But when a donor gives them money, he is able to give more because he is not paying taxes. So some of what they have is federal money, every student’s money, every family’s money.”

I don't know if I agree that the tax policy should be changed for schools--maybe it should--I haven't yet formed an opinion on that (though companies might stop matching our school donations). But Tierney's implication seems to be that the schools, because donors are receiving a tax break, should have to spend it since it supposedly doesn't belong to the school. It's such a typical governmental way of seeing things. I for one would be glad if the government would build up a surplus the way Harvard has. Now of course there may be a conflict on interest if government were to invest in private companies as Harvard does, so things are probably not so simple...

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