By pla2na @Adobe Stock
Colleges to Lose Tax Breaks/Funding over Anti-Semitism?
If you haven’t heard of the Harvard Corp., you’re about to. Read on.
Last week, Harvard Corp. issued a condescending statement affirming its support for Harvard President Claudine Gay. The corporation is Harvard’s governing body, which wrote that Ms. Gay “is the right leader to help our community heal and to address the very serious societal issues we are facing.”
In the WSH, Alysia Finley accuses Harvard of effectively giving a middle finger to its alumni, First in line for receiving the offensive gesture is hedge-fund titan Bill Ackman. Ackman demanded Ms. Gay be canned after she equivocated before Congress over whether calling for the genocide of Jews violated Harvard’s rules against bullying. The corporation wished to convey it wouldn’t bow to outside pressure.
Lack of Accountability
“Corporation,” agrees Ms. Finley, is an apt appellation for Harvard and other Ivy League schools. First to be considered: they operate more like for-profit businesses than educational institutions.
Unlike businesses, however, they lack shareholders to hold them accountable. This makes them models of the left’s “stakeholder capitalism” paradigm.
The Harvard Corp. consists of 13 members, including the president. It is self-selecting—members elect new members—and boasts that it is “the oldest corporation in the Western Hemisphere.” Governing bodies of other Ivy League schools, including Yale and Columbia, are also referred to as corporations, which are structured to limit alumni influence in their affairs.
Because the Internal Revenue Service recognizes Harvard and most private colleges as nonprofits, they don’t have to pay taxes.
This exemption saves Ivy League schools hundreds of millions of dollars each year and has enabled them to grow their fiefs and endowments.
- Harvard ($50.7 billion)
- Yale ($40.7 billion)
- Princeton ($34.1 billion)
- The University of Pennsylvania ($21 billion)
Ivy League endowments wouldn’t be anywhere near as large if the schools had to pay a 23.8% tax on capital gains, as their wealthy alumni must on their investment earnings.
What’s Missing:
- most taxes.
- price restraints: charging customers exorbitant prices for a product—a prestigious degree with inelastic demand.
If campus antisemitism or high tuition turn off some prospective students, notes Ms. Finley, “plenty of others are eager to enroll.”
These endowments wouldn’t be anywhere near as large if the schools had to pay a 23.8% tax on capital gains, as their wealthy alumni must on their investment earnings.
Fraudulent: “Open to All”
Price discrimination is also unrestrained, explains Mr. Finley. Elite schools award financial aid to lower-income kids so the schools can “market themselves as diverse and accessible even though most of their matriculants are affluent and ideologically homogenous.”
It’s essential to their branding that customers—i.e., undergraduate students—believe they are open to all.
Elite Schools Exploit
The schools exploit low-cost labor by employing graduate students to teach classes for higher-paid faculty. At most Ivy League schools, grad students outnumber undergrads. At Harvard the ratio is about 2 to 1. Like Big Tech companies, universities have created a progressive corporate culture in their selective hiring and admissions of like-minded leftists.
Accountable to Whom?
It was a Harvard grad student who was captured on video accosting an Israeli student. After Harvard removed him from his position as a residential proctor for undergrads, its graduate student union—an affiliate of the United Auto Workers—complained on Twitter that “Harvard is actively punishing and evicting” black, Palestinian and Muslim students.
Ms. Gay, Harvard’s president, seems reluctance to condemn antisemitism on campus. That, no doubt, stems in part from the institutions’ dependence on cheap labor.
Universities don’t want to risk a grad-student strike, which could compel faculty to teach sections and grade papers. Better to keep the labor peace.
Ivy Leagues vs Corporations
The schools don’t have shareholders who can force changes. In public capital markets, investors have the power to replace corporate management. Mr. Ackman, however, can’t wage a shareholder campaign to oust Ms. Gay or Harvard Corp. members.
The Ivy League, explains Ms. Finley, exemplifies the problems with stakeholder capitalism, which invariably results in rudderless and unaccountable leadership.
It’s time to stop calling them “colleges.” They’re corporations in the worst sense.
Why would Harvard be accountable to anyone?
From Business Insider
Federal funding, which accounted for approximately 67% of total sponsored revenue in fiscal year 2021, increased 1% to $625 million.
Non-federal sponsored revenue, attributable to funding from corporations, foundations, and other non-federal sponsors, remained relatively flat at $302 million.
