You Know, Harvard, When You Have To be Embarrassed And Shamed Into Doing What Should Have Been Your Automatic Response Anyway If You Had Any Decency, It’s Too Late To Save Face.

The cat, as they say, is out of the bag. Harvard is arrogant, ethically inert, and avaricious. But we knew that.

Yesterday I noted that Harvard had accepted nearly $9 million from the pandemic relief package. “With a 40 billion dollar dollar endowment, Harvard is better off financially than the U.S. government,” I wrote. “There is no excuse for the school accepting the money. It is getting widely criticized for taking it, and ought to be.”

Harvard’s disingenuous rationalization was unconvincing:

“By federal formula laid out in the CARES Act, Harvard was allocated $8.6 million, with 50% of those funds to be reserved for grants to students. Harvard is actually allocating 100% of the funds to financial assistance for students to meet their urgent needs in the face of this pandemic. Harvard will allocate the funds based on student financial need. This financial assistance will be on top of the significant support the University has already provided to students — including assistance with travel, providing direct aid for living expenses to those with need, and supporting students’ transition to online education.”

My conclusion: “The only issue is that Harvard has plenty of money to do all of this without any hand-outs from the government, and many other institutions need the money more, which is an easy calculation because no institution needs money less than Harvard does.”

Others, including President Trump, chided The Greatest University In The World for its indefensible greed. The school pushed back earlier today with a word-parsing justification that made no sense. It has 40 billion dollars sitting in investments. That’s the end of the debate.

The double talk didn’t work, and by this afternoon, with the backlash growing and the episode becoming a public relations nightmare, the Crimson had capitulated. Trump and the other critics were right. Harvard was wrong. The University announced that it would not apply for or accept  emergency relief, joining Stanford and Princeton.

In an ignominious statement trying to shift blame for the fiasco, Harvard said “that the intense focus by politicians and others on Harvard in connection with this program may undermine participation in a relief effort that Congress created and the President signed into law for the purpose of helping students and institutions whose financial challenges in the coming months may be most severe. As a result of this, and the evolving guidance being issued around use of the Higher Education Emergency Relief Fund, Harvard has decided not to seek or accept the funds allocated to it by statute.”

Good.

But too late.

18 thoughts on “You Know, Harvard, When You Have To be Embarrassed And Shamed Into Doing What Should Have Been Your Automatic Response Anyway If You Had Any Decency, It’s Too Late To Save Face.

  1. “As a result of … evolving guidance.” Hah! Now there’s some really expensive, up-to-date, slick Authentic Frontier Gibberish. I bet the focus group ate it up.

  2. Forty billion dollars is a staggering sum. It’s too bad that it took public shame and embarrassment to get them to change. I wonder if other universities are similarly flush with money. Is Harvard the exception or the rule? I’m guessing your diploma still hasn’t moved…

  3. I really don’t think Congress actually allocated funding specifically to Harvard. That statement is pure BS.
    I could be technically eligible for all sorts of handouts given my limited retirement income but that does not mean I deserve them.

  4. Jack: “ Trump and the other critics were right. ”

    Don’t sell yourself short, Jack. I am sure all of the higher-ups at Harvard are EA readers and saw the error of their ways.

    -Jut

  5. I’m curious as to what these funds are intended to pay for in the first place. Campuses are all but completely shut down, and nobody’s refunding any tuition. Wouldn’t that actually mean the schools are in better financial shape, or at least not suffering in any significant way? They’re keeping the tuition money, but providing fewer services to students. Maybe I’m not good at math, but if you keep the same income, but lower your expenses, doesn’t that reduce, not increase, your need for a handout?

    • Jeff, Jeff, Jeff. This is Congress we’re talking about. They’re buying votes and loyalty. With the taxpayers’ money. Who needs math to do that?

  6. Harvard’s greed is something new? I am old enough to remember the university grumbling when it had to sell off its holdings in apartheid South African kuggerands… “Money is money” was the basis of their argument. I also remember a Harvard magazine article a few years ago praising its investment counselors: both of whom made were awarded between $300 and $400 million as salary by Harvard — in a single year! Concern for students, my ass. All they really want are those naifs who still want that old Harvard cache’. But it’s getting thinner and thinner. Good. It’s been rotting for a long time now.

  7. Can I play Devil’s Advocate here? (Maybe just devil’s half-advocate.) I mean, I think it’s delicious that Harvard is getting a first hand experience in “political correctness”, “public shaming”, and “fake news” all in one fell swoop; but this is an Ethics site and the saying the truth should always be ethical.

    Harvard’s endowment is $38.3 billion, but what does that mean? Endowments are donations intended not for the donation to be “used” but for the donation to be “invested”. The investment grows and pays income distributions to the target recipient. Sure, Harvard has an endowment of $38.3 billion, but that generates an annual distribution of roughly $1.9 billion. That’s a distribution during “good times”. Any bets out there that the distribution might crater this year?

    Let’s assume it doesn’t. The $1.9 billion distribution is roughly 1/3rd of Harvard’s annual operating budget. That’s money that they were counting on, budgeted, and spent.

    The “fake news” comes into play when there’s an out sized focus on the principal balance of the endowment (like that could be tapped into, withdrawn, and spent) versus the annual income distribution of the endowment. It intentionally causes a mental disconnect in the reader to maximize outrage. However, even focusing on the distribution ignores the fact that the university was relying on the distribution as regular income.

    I prefer E2’s comment strategy above that focuses on irrational and exorbitant spending. I haven’t vetted the claim within the comment, but accepting it at face value, I would query whether the sums of the bonuses paid were reasonable. I’d attempt to do that by trying to understand if the sums went solely to individuals or to a whole firm and what resources were dedicated and expended to attain the investment goals. I could see employing an army of information researchers and strategists to complete game-theory scenarios on hundreds if not thousands of scenarios to achieve the best investment return in a gamble to attain a lofty goal. Conversely, I could see one investment manager getting lucky during “boom times” and unnecessarily collecting $300 million as an individual for no damn good reason.

    Suffice it to say, my over-arching thought here is that we should always consider the nuance in these stories, even if we agree with the end result. By diving into the nuance behind the sound-bite headline we acknowledge competing voices, we show our careful consideration, we educate by experience, and above all we are promoting these qualities because they are beneficial to society.

    Then we can make the determination that Harvard should have done this from the start and it’s too late to save face.

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