
Why Is Harvard Getting $9M in Stimulus Money When It Has a $40B Endowment? - Reedx
https://www.forbes.com/sites/susanadams/2020/04/21/why-is-harvard-getting-9-million-in-stimulus-money-when-it-has-a-40-billion-endowment/#619ce766f007
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vosper
While we're at it, the University of Southern California has a $5,700,000,000
endowment [0], just (literally just in the last few weeks) bought an amazing
$8,600,000 residence for it's president [1], and is receiving [2] $19,278,560
in CARES act funding.

I guess with that extra money could have bought a nicer palace... I mean
house.

[0]
[https://en.wikipedia.org/wiki/University_of_Southern_Califor...](https://en.wikipedia.org/wiki/University_of_Southern_California)
[1] [https://variety.com/2020/dirt/more-dirt/usc-
buys-8-6-million...](https://variety.com/2020/dirt/more-dirt/usc-
buys-8-6-million-santa-monica-house-to-use-as-presidential-
residence-1234569818/) [2]

~~~
lippel82
I'm sorry, but the article you linked clearly states that they bought a
cheaper and smaller residence for their president, and they are in the process
of selling the old residence for potentially more than twice the amount.
What's your point here?

~~~
vosper
Cheaper and smaller, and still $8m dollars. My point is that $8m is a lot of
money to be spending on a house for your president (why is the university even
paying for this at all?) especially when you then turn around and take a bunch
of taxpayer stimulus money.

------
jl2718
>> Harvard won’t use any of its $9 million stimulus check to make up for
losses

>> “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 need the money. It issued room and board refunds to students
who left campus.

So... they’re giving full refunds plus an extra $9M, right? Not counting on
it.

Government money doesn’t come from nowhere. It comes from people with a median
of around $41k income and $100k net worth for the entire household. What
percentage of Harvard families fall below that line? They need it though. I’m
sure the average American would gladly donate if it wasn’t forcefully taken
from them.

~~~
dragonwriter
> Government money doesn’t come from nowhere.

That's actually closer to the truth than your idea.

> It comes from people with a median of around $41k income and $100k net worth
> for the entire household.

The median federal tax dollar comes from a household making over $200k/year.
But marginal spending doesn't actually come from current taxes anyway, it
comes (insofar as the concept of the public purse approximates reality, which
as MMT observes isn't very much) from borrowing which is repaid by marginal
changes to future taxing and spending policy compared to what it would have
been without the constraint of that debt. Who that comes from is...obscure and
dependent on future elections and policy priorities.

~~~
jl2718
True in the short term. I suppose that "In the long run, we'll all be dead."

------
eesmith
When I was a kid, my home state of Florida introduced the state lottery, one
of the arguments for it was that all profits would go to education.

Of course, what that really meant was that the state could reduce the state
contribution to school system by an equal amount.

Harvard says that 100% of the money goes to the students. What that really
means is the money doesn't need to come from somewhere else.

Are we to believe that Harvard ("a hedge fund with a university attached to
it") couldn't plan for a pandemic, or couldn't have set aside funds for this
possibility?

Or (IMO more likely) assumed the government would pay for some of it anyway -
private profit, socialized risk.

~~~
kinkrtyavimoodh
Barely anyone plans for a pandemic. It does not make business / economic
sense.

~~~
olyjohn
It makes sense now, doesn't it?

You don't have to plan for a pandemic specifically. Just any kind of a
downturn where you might not be making money for months at a time. It's called
an emergency fund.

You always hear how people at home should have 6 months worth of expenses
saved up in case of emergency. I'm honestly blown away how many businesses
don't do the same thing. Basic fucking financials.

I understand a bit more if you're a smaller business, with small margins, and
you're just getting started. But if you've been in business for years, with
tons of money flowing through... and you can't get through a few months, maybe
you should go out of business.

~~~
hemogloben
This has been the most frustrating thing for me. The advice for the individual
is essentially the exact opposite of the advice for the 'too big to fail'. I
understand that the circumstances are different, but it feels frustrating that
my accountant would suggest I save 6 months for unforeseen circumstances, but
wouldn't provide the same advice to an employer with many people's livelihoods
in their hands.

That said: Are there any studies on the economic impact of every company
hoarding 6 months worth of safety vs the likelihood of that event vs the cost
of no company having the safety net during this pandemic?

------
busymom0
This was addresses in yesterday's press conference. He was not pleased:

[https://www.independent.co.uk/news/world/americas/us-
politic...](https://www.independent.co.uk/news/world/americas/us-
politics/coronavirus-funding-trump-harvard-companies-give-back-money-
stimulus-a9477316.html)

[https://www.foxbusiness.com/money/trump-mnuchin-say-
coronavi...](https://www.foxbusiness.com/money/trump-mnuchin-say-coronavirus-
sba-loans-will-be-paid-back-by-big-companies)

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jamisteven
Fairly certain endowments arent just bank accounts without stipulations. 1m
for athletics, 1m for research, 1m for infectious diseases, etc. Not 40b to do
whatever you want, there are strict rules on how these funds can be used and
what they can be used for. That said, I dont agree with them getting financial
assistance from the government. Yea, goes into this further down the article:
"a Harvard spokesman emailed a list of bullet points about restrictions on
endowment spending. The short version: The endowment is made up of more than
13,000 separate funds. The “overwhelming majority” of those are restricted to
spending designated by donors, like professorships and scholarships"

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a3n
Because they're rich, and have the deployable resources and relationships to
ensure that they got the money when they successfully asked.

