Can you guess what Yale is not doing with its $24-billion endowment?
Yale has an endowment of $24 billion. Harvard has $32 billion. It pains me to say it, but both my alma maters are getting richer while poor students are getting poorer.
WHO do you think received more cash from Yale’s endowment last year: Yale students, or the private equity fund managers hired to invest the university’s money?
It’s not even close.
Last year, Yale paid about $480 million to private equity fund managers as compensation — about $137 million in annual management fees, and another $343 million in performance fees, also known as carried interest — to manage about $8 billion, one-third of Yale’s endowment.
In contrast, of the $1 billion the endowment contributed to the university’s operating budget, only $170 million was earmarked for tuition assistance, fellowships and prizes.
Despite the success of its endowment, in 2014 Yale charged its students $291 million, net of scholarships, for tuition, room and board.
In 2012, Harvard spent about $242 million from its endowment on tuition assistance; in 2014, it paid $362 million in private-equity fees, and nearly $1 billion in total investment management fees.
Now, it is true that money managers who earn high returns expect higher rates of compensation – but I find it hard to believe that Yale can't find someone who can manage its money reasonably well for only, say, $100 million instead of $480 million. In the meantime, Yale and Harvard are sitting on huge stacks of money and spending only a tiny percentage on the students, when they could literally let all students attend for free.
Why are these big, rich liberal institutions so greedy? Why won't they redistribute their wealth to the students, most of whom have very little money? The gap between student and university wealth is growing wider and wider. The well-to-do universities are doing little to help their less fortunate student bodies. The 1% is ignoring the 99%. Are there any class warfare slogans I've forgotten?
The article this is taken from supports legislation that would require schools with more than a $100-million endowment to spend at least 8% on education. That makes sense, given how much money these schools are hoarding. They are nonprofit, but when they keep billions inactive, and waste money on Pharaoh-like monuments to themselves in the form of never-ending building and elaborate construction, they are abusing their nonprofit status.
Do you think we need the government to form a "Student Financial Protection Bureau" to monitor the finances and spending of elite billionaire liberal schools? Naturally, such a board would have to be well-funded, perhaps by a modest 1% wealth tax on schools with endowments over $100 million. Do you think Elizabeth Warren would call this a progressive thing to do?
This article was produced by NewsMachete.com, the conservative news site.