
Malcolm Gladwell rips into Stanford University's request for donations - WheelsAtLarge
http://www.businessinsider.com/malcolm-gladwell-rips-into-stanford-universitys-request-for-donations-2017-2
======
geebee
I think that tax exemptions for universities should come with a lot more
strings attached. These exemptions are actually worth considerably more per
undergraduate that even the best state funded public institutions receive per
undergraduate.

[http://www.slate.com/articles/business/moneybox/2015/09/harv...](http://www.slate.com/articles/business/moneybox/2015/09/harvard_yale_stanford_endowments_is_it_time_to_tax_them.html)

Here's the report

[http://www.slate.com/articles/business/moneybox/2015/09/harv...](http://www.slate.com/articles/business/moneybox/2015/09/harvard_yale_stanford_endowments_is_it_time_to_tax_them.html)

Personally, I think one condition should be to increase the scale of
undergraduate admission. Berkeley and UCLA, for instance, enroll around 25,000
undergraduates, whereas Harvard and Stanford are in the 6,000-8,000 range.
This is of course a favorable arrangement for Stanford - enrolling very few
undergraduates keeps the US News numbers happy, and allows them to focus
mainly on research and graduate students. They shower a massive amount of
money on a small and largely affluent student body, and enjoy a huge tax
advantage because they benefit the public.

Although these institutions are generous with low income students, keep in
mind that they 1) enroll a much lower percentage of low income students than
UCLA or Berkeley, and 2) enroll far fewer students overall. As a result,
Berkeley enrolls more low income students than the entire Ivy League combined.
This is true of UCLA and several other UC campuses.

Why are we giving Harvard and Stanford a huge tax break in order to shower
benefits on a tiny and largely affluent student body? The state funding for
Berkeley and UCLA comes with all kinds of strings attached, and it's
considerably less per undergrad than the value of this tax break.

We have, through policy, put our public institutions at a severe financial
disadvantage. This isn't just a result of market forces or choice, this is
built into our tax code and regulatory state.

------
nafizh
Anyone knows why rich universities keep that amount of money lying in the
bank?

~~~
setr
I imagine banked money isn't taxed, but any spent would be, so every
expenditure shoots up a bonus 20-40% relative to the value of just leaving it
alone. Which means any revenue has to match, and exceed, the tax to actually
be profitable (versus sitting on it)

Same way, I think, apple keeps $800bn unspent; not spending is simply more
profitable than spending

And i guess at that level of money, its generally not worth doing much unless
its big (due to all the overhead necessary to keep such funds available and
tracked).

~~~
t3soro
Apple is different than Stanford. Stanford's fund is not an IRA - there is no
tax either when they withdraw from the fund. Apple has all that money stashed
because they can't repatriate it to the United States and their shareholders,
without realizing corporate income tax on it in the US. So as long as they
keep it overseas, the value of their stock goes up because they control the
cash, but they can't award it back to their shareholders as dividends without
biting the dividend tax bullet.

------
t3soro
Okay, Malcom, let's tax private universities so nobody gets a great education.
You're insane if you think those dollars should be taken from private
universities and be spent on public schools!

~~~
cprayingmantis
I went to a state school and received a great education that was very cheap.
Not sure what your comment was meant to imply?

