The Purpose of Harvard is Not to Educate People

By Sean Carroll | May 29, 2008 1:12 pm

300px-john_harvard_statue_at_harvard_university.JPG Harvard University’s endowment is $35 billion, and some people aren’t happy about it. Massachusetts legislators see money that could be theirs, and are contemplating new taxes. Social activists see money that could be going to charity, and want to divert it. Distinguished alumni who have landed at public universities wonder why, with all that cash, Harvard graduates such a tiny number of students.

These are all legitimate concerns, and I won’t be suggesting the ideal policy compromise. But there is one misimpression that people seem to have, that might as well be corrected before any hasty actions are taken: the purpose of Harvard is not to educate students. If anything, its primary purpose is to produce research and scholarly work. Nobody should be surprised that the gigantic endowment isn’t put to use in providing top-flight educational experiences for a much larger pool of students; it could be, for sure, but that’s not the goal. The endowment is there to help build new facilities, launch new research initiatives, and attract the best faculty. If it weren’t for the fact that it’s hard to get alumni donations when you don’t have any alumni, serious consideration would doubtless be given to cutting out students entirely. Sure, some would complain that they enjoy teaching, that it keeps them fresh, or that students can be useful as research assistants. But those are reasons why the students are useful to the faculty; they are not assertions that the purpose of the institution is to educate students for their own sakes.

Don’t believe me? Here is the test: when was the last time Harvard made a senior tenure offer to someone because they were a world-class educator, rather than a world-class researcher? Not only is the answer “never,” the question itself is somewhat laughable.

This is not a value judgment, nor is it a particular complaint about Harvard. It’s true of any top-ranked private research university, including Caltech. (Note that Caltech has over 1200 faculty members and fewer than 900 undergraduate students.) And it is not a statement about universities in general; many large public universities, and smaller liberal-arts schools, take education very seriously as a primary mission. This is by no means incompatible with being a top-notch research institution — the physics departments at places like Berkeley or UC Santa Barbara would be the envy of almost any private research university. But those places also take their educational mission very seriously, which Harvard, honestly, does not.

Of course, certain individual faculty members at Harvard might be great teachers and care deeply about their students; but that’s a bonus, not a feature of the institution. (Harvey Mansfield, to a visiting colleague: “You should close your door. If you don’t, undergraduates may wander in.”)

None of this is necessarily good or bad; it’s just a recognition of the state of affairs. Harvard et al. judge themselves by the research and scholarship they produce. Students will always keep applying to those places and trying to get in, because the aura of intellectual attainment produced by precisely those scholarly accomplishments will always act as a powerful draw. Such students are by no means making a mistake; the intellectual atmosphere at such places truly is intoxicating, and if nothing else the interaction with your fellow talented students can be a life-changing experience. But to try your best to get into Harvard and then complain once you are there that the professors seem interested in their own work rather than in teaching is to utterly miss the point. And to complain that Harvard has a giant endowment that it chooses to use for purposes other than educating more students is equally misguided.

  • Ellipsis

    Clearly you wouldn’t be saying that governments should tax the endowments and use the money, as governments tend to do, to subsidize fertilizer purchases for farmers, or send soldiers to Iraq, or any of the other wonderful alternatives. Isn’t doing good research in itself part of public education? Not saying there couldn’t be improvements, but I think you should mention that the people fighting to simply tax endowments are generally way on the wrong side of the public good, and maybe suggest some gentle ways that governments could help foster the educational mission without heavy-handedly damaging both research and education.

  • George Musser

    Leaving aside the fact that a complex institution can have multiple purposes, the sheer size of the endowment suggests Havard’s main purpose — that is, the one that dominates the senior management’s time — is neither to educate nor to do research. It is to manage money. Harvard has become, in effect, an investment fund with a few scholars on the side.

  • ike

    Let’s point to the real issue here, which is not really being addressed – it is not the educational mission of the university, nor is it the research and knowledge mission of the university – let’s dispel that myth right up front. Harvard is wealthy enough to provide both full-time researchers and full-time instructors, with some level of mix in-between. Yes, there are brilliant researchers who should never be allowed near students, and great teachers that shouldn’t be allowed in the laboratory, but a good dean makes sure all the bases are covered. A good dean is rare in science, as the job calls for a brilliant scientific career, good interpersonal skills, great management skills, and a willingness to devote a lot of time to the task.

    However, that’s not the issue these days. The real issue in academics is who gets to control any lucrative patents generated under the provisions of the Bayh-Dole act of the early 1980s, which allowed universities to grant exclusive licenses for their patents to private parties. This has been trumpeted by 95% of administrators as a “great leap forward” for academics – but that is not really the case (unless we’re talking Mao, and cheering the consolidation of the state with industry).

    What it has led to is a situation in which deans are hired not to promote research and education, but rather to help generate and license lucrative patents which will then, in turn, increase the amount of the university’s endowment!

    Most of our leading universities, including everyone from Harvard to MIT to Colombia to Stanford to the University of Texas and the University of California are now trying to run this multi-agenda program – licensing patents and pursuing sales & marketing, doing research, and educating students – and devoting about equal resources to each. Not only that, they’ve been allowing large private donors to set the research agenda – this is the case for Stanford’s “Global Climate and Energy Program”, in which final funding decisions are made jointly by ExxonMobil, Schlumberger Oilfield Services, Toyota and Stanford U.

    The conflicts of interest are legion, and extend across the entire academic spectrum. If the University of Berkeley takes millions from British Petroleum for “alternative fuels research”, will they also be interested in hiring junior scientists who specialize in environmental toxicology of crude oil pollutants? If one of Harvard’s patented drugs is found to have negative side effects by a Harvard scientist, will publication of the results be encouraged? These are basic conflict-of-interest issues that are widely accepted in other areas – that’s why we have insider trading rules, for example (as scientists who thought they could use their inside knowledge of patents, IPOs, etc. to make big bucks are starting to discover).

    Such considerations might also play into whether or not to fund basic physics research, as well – not too many patents being generated by the cosmologists these days, are there? Should the unproductive departments be eliminated, as per good business practices?

    The solution to this mess is simple: eliminate Bayh-Dole, and make all patents generated with the use of public tax dollars available under non-exclusive licensing agreements, free for U.S. citizens, but with a fee for everyone else. There is no excuse for allowing taxpayer-generated intellectual property to fall into private hands. BP is wealthy enough to set up their own world-class in-house research center, after all – that’s what Google does, right?

  • Spiv

    heh, I remember trying to describe this phenomenon to an interviewer while I seeking new employment- namely that I had received the better part of the education at a junior college, and then went on to a fancy dancy university to have other top tier students to compete with and try to glean some bit of information from the professionals that happen to teach classes there. I was fortunate (or unfortunate?) enough to realize just what you’ve stated while I was still undergrad soup. Prior to graduation I was labeled by the faculty as “a mediocre student, but an excellent pupil,” IE I did what was required for the term and not much more, but managed to get a heck of a lot more out of it than most other students and transplant that into real world stuff.

    Undergrad is getting a piece of paper to get some jobs. Grad is a bit like an expensive apprenticeship. My only complaint is that from a learning perspective that apprenticeship should be more accessible, and earlier on. That is, however, impossible unless the .gov wants to fund it, in which case they will almost certainly find another way to make it useless (see public k-12 schooling).

    Alternative would be to legitimize other forms of apprenticeship to the level of college education. Also not going to happen.

  • Anonymous


    I don’t think the point is that Harvard is or isn’t in educating students or not. Rather, why should large University endowments be qualified as a non-profit organization?

    Most non-profits that exist today (and I do qualify that with a most) run mostly on the basis of a few paid executives and administrators with a bevy of volunteers to dole out money to worthy causes, of which Universities are no doubt a benficiary.

    When you see that same non-taxable status being used to:

    a) Make the University’s buildings prettier
    b) Make the Professors’ salaries larger
    c) Serve to dilute the academic quality of Universities which DO wish to pursue both research and education (as you mentioned, UC Berkeley and UC Santa Barbara and others)

    The fact of that matter is, as the above commentator has noted, the passing of the Bayh-Doyle Act has effectively made Universities into research corporations. And like other corporations, it should be taxed, unless there is an overriding reason to not do so.

    The education v. research argument is a red herring. What ultimately needs to be discussed is what public good does Harvard and Yale put forth (impact per dollar) compared to other non-profits? And there I believe you will find the chasm to be so enormous as to make the entire question ridiculous in the first place.

  • former harvard student

    When I was a student at Harvard, it always seemed to me that educating people was a very important part of the university’s mission. And many students would prefer to learn from world class scholars, even if they are not always the best teachers. In addition, I imagine that part of the attraction of joining the faculty there is the opportunity to interact with excellent undergraduates. I had a number of incredibly good teachers there. A couple of classes were disappointing, but usually the teaching assistants could fill in the gaps.

    On the other hand, when people from Harvard call me asking for money, I laugh at them. I really can’t see why they need any more.

  • LAR

    I could not agree with you more. Not only is this the case in private institutions, but it is also the case in many public institutions. In the US, there are very few universities out there for the purpose of primarily teaching. To me, it’s all about the money. Believe it or not, research brings in more money and prestige than teaching.

  • Lab Lemming

    “Here is the test: when was the last time Harvard made a senior tenure offer to someone because they were a world-class educator, rather than a world-class researcher? Not only is the answer “never,” the question itself is somewhat laughable.”

    What about Henry Dunster, in 1640?

  • Sean

    LAR, I think you are projecting a bit. It is certainly not “all about the money” — it’s about research, as I said. If you want to make money, there are certainly more lucrative things you can do than go into academia, even as an administrator. It’s true that the Harvard endowment, if you pretend that it’s a hedge fund, makes an amazing return on investment; however, you can’t invest in it, and you can’t cash out, so that’s not a good thing to pretend.

    This is not an issue of morality. Research is a good thing. So is teaching. They are just not the same thing, nor necessarily of equal relative priority in every institution of higher education.

  • Matt

    You’re right, but so is George above in the comments. If the endowment were being used mostly to fund research with only modest leftovers used for reinvestment that would be one thing. But teaching and research come in a distant second to “growing the endowment” as the purpose of the endowment. I believe it’s an example of the Iron Law of Oligarchy.

    I’m not suggesting the government solve the problem. Even an endowment doing nothing but being invested is much better than one being blown on the latest government boondoggle.

  • fh

    “Research is a good thing. So is teaching. They are just not the same thing…”

    But to suggest they are basically orthogonal is not sensible either. Again, this might be a German prejudice, but our University system used to be build on the principle of units of research and teaching (Humboldt e.g. All I am saying is that the seemingly so natural and sensible categorization of activities you propose is cultural and not a function of the unalterable state of the Universe.

  • Kuas

    From the Harvard Charter of 1650

    “And that all the aforesaid transactions shall tend to, and for the use and behoof of the President, Fellows, scholars, and officers of the said College, and for all accommodations of buildings, books, and all other necessary provisions, and furnitures, as may be for the advancement and education of youth, in all manner of good literature, arts, and sciences.”

  • Joseph

    I thought that a Harvard undergraduate obtained an excellent education merely by being in the presence of the great men and women who do research there.

  • capitalistimperialistpig

    “The purpose of Harvard is not to educate…” says research professor Carroll. No doubt the purpose of a cotton boll might not be centered on socks and T shirts if one’s vantage point is that of the cotton boll worm. Education may not be its purpose, but it is its raison d’entre.

    Moreover, most of the budget of the college of arts and sciences is allegedly devoted to students and instruction – about 80% vs. 15% for research. I suspect that the ratio is similarly slanted toward instruction in the professional schools.

    Any long lived and prosperous institution develops its own evolutionary purpose though – that of surviving and expanding its power, prestige, and affluence, and Harvard is singularly good at that. The denizens and leaders of the institution try to exploit it for their own benefit, and the faculties of the great private universities have done that too.

    The citizens of Massachusetts have a right to consider whether the privileges they have granted a vastly wealthy institution are worth the trouble, and Sean has given them a bit of ammunition – which is probably a good thing.

    Educating a few bright students and providing a very talented faculty with opportunity to pursue their interest are doubtless good things, but should the resources of a small country be devoted to them?

  • Marshall Perrin

    As another former Harvard undergrad, I agree with the previous anonymous alum – Harvard does indeed have some excellent educators, for instance Eric Mazur and Howard Georgi. I agree that education is not “the” mission of the university, but is it truly even meaningful to speak of a single mission for a sprawling institution of a hundred thousand people? Education is a mission at Harvard, one of several (and yes, the others include producing research, inventing and licensing things, and even occasionally winning sporting events.)

    That being said, I agree with the point that Harvard does not tenure people for their teaching skills. I can think of two exceptionally good instructors I had while there who were not tenured (Bert Vaux in linguistics and Kamal Kuri-Makdisi in mathematics), and there are plenty of other examples. And that is, without a doubt, a flaw of the system and I won’t for an instant defend that.

    However, let’s not forget that there are certain kinds of education which require a top-notch research environment. As an undergrad, I worked on a balloon-borne X-ray telescope and played a very small role in design studies for a spacecraft (EXIST). As a freshman, I worked on laser atom trapping with Lena Hau, now famous for her work “freezing light” in Bose-Einstein condensates. I participated in a six-student seminar on planetary astronomy co-taught by Matt Holman and Bob Noyes, both leaders in the field. If you want to learn how to be a researcher, then being part of a community of researchers is itself an education.

    So sure, Harvard doesn’t always prioritize education as its one and only goal – nor in my opinion should it – yet there’s a heck of a lot of education going on there nonetheless. Like I said, I’m not defending the tenure system, and personally I’m extremely glad to have then gone to Berkeley, where I learned and grew tremendously both as a scientist and as an educator myself. But it just seems fruitless to me to speak of what “the purpose” of a huge institution like that is. There are many purposes, contradictory and complementary and unrelated all at once, rich and complex.

  • ike

    Sean, I think you’re ducking the patent agenda issue here. There are really two kinds of research in many administrator’s minds these days: patentable and licensable research, and everything else.

    There is an analogy to traditional practices, in that even though Harvard has a huge endowment, it wants Harvard researchers to have outside funding from the leading national agencies, both for reasons of prestige and finance. A successful record of external grant-writings is a pretty key career issue for scientists, after all – so at some level, it is “all about the money”, in the sense that without funding, most research can’t be done. However, there are traditional ways of balancing these issues. Professors have always consulted on the side for industry, the issue being how much time they devoted to it.

    What is different today is that university administrators are behaving like corporate CEOs and trying to run their research departments as for-profit institutions. This is a real disaster in the making.

    The role of a research department is not just to do research, but also to educate scientists for roles outside of academics. This is precisely how the Silicon Valley computer tech explosion happened – Stanford and the UC system were generating a steady stream of highly-trained solid-state physics PhDs and engineers, who then went to work for a wide variety of small startups, from HP to Apple. Stanford and the UC never thought to try and run the business themselves, but they were happy to get donations from their old students, and their computer research departments were among the best anywhere.

    By repealing Bayh-Dole, we should be able to return to that model. The notion that this will “slow technology transfer” is simply bogus. By making basic patents more widely available, this will actually speed tech innovation and development, as no one company will be able to lock out the competition. If they want to own patents, they should fund their own R&D labs, right?

    Some progress is being made – after much controversy, the University of California has agreed to new review rules for tobacco-funded research:

    They were forced to do this after revelations such as this: At the end of fiscal year 2006-07, UC researchers held 23 active grants, totaling $16 million, from sponsors with known ties to the tobacco industry. All of this funding, which supports research and related activities on the Berkeley, Davis, Irvine, Los Angeles, Riverside, Santa Barbara and San Diego campuses, is from Philip Morris USA.

    However, they are not even considering extending that to other areas of funding, such as pharmaceuticals. This all revolves around the “sensitive issue” of securing intellectual property rights to research done by university staff. These patents can be worth hundreds of millions or even billions of dollars, as the human growth hormone story showed.

    So, sad as it may be, many of the critical decisions made by the leading universities in the U.S. these days are indeed “all about the money.”

  • Sean

    CIP, why do you consistently give into the temptation to be obnoxious? You have interesting things to say, but seemingly can’t help but turn them into personal remarks rather than just making your point. It honestly baffles me.

    For what it’s worth, I’m pretty well acquainted with the perspective of a Harvard student, and also that of a teacher, as well as that of a research professor. And what matters is whether what I say is right or wrong, not my personal perspective.

    I’ve seen it from both sides, and I can testify that — at this very small number of institutions, which get an oversized share of attention when it comes to “higher education” — it’s not about teaching, and it’s not about money; it’s about research.

  • Anonymous


    I’m sorry, but I am going to ask that same question (this time, my post will be proofread!)

    What qualifies the endowment of Harvard University to act as a non-profit corporation (with all its tax advantages), when it is not even dictated by the standard rules of a non-profit (ie, the requirement to spend at least 5% of a foundation’s assets per year) while minimizing the public impact that it makes?

    You can argue that the (limited) number of students it educates and the research that it performs qualifies as a “public good”, but again it stands in stark contrast to the public good performed by a majority of non-profits on an impact-per-dollar basis.

  • Ben

    Many of the elite large flagship state universities do somewhere from 0.1-1.x times as much research as Harvard, but have 0.001x the endowment. I’m pulling these numbers out of my you-know-what, but I bet they would be supported by actual metrics like numbers of papers and books published per year.

    So I don’t think we can say that the endowment is what it is out of the need to support research, any more than its purpose is to support undergrad or grad education. Research could be supported on a 10x smaller endowment, and the salaries would still be high and the perks would still be perky.

    The purpose of the endowment is to make Harvard the biggest ape in the higher education cage. Somebody has to be the biggest, and all the others have to want to be the biggest (and be looked down on for not being the biggest).

    None of this means that I think taxing the endowment is a good idea. I suspect it’s a very bad idea. However, I think non-profit organizations that make a ton of money are a little suspect, and periodic review to insure that they serve a public or charitable purpose is not a bad idea.

    (BTW, ETS is another example, even more so: ETS is a non-profit that makes a lot of money, pays its leaders well, has a cushy campus, a near monopoly on the test part of its business, and basically zero oversight, since it doesn’t have either shareholders, major competition, or any serious accreditation review.)

    The real question is why any private donor chooses to give money to Harvard, since the marginal value of a donation to Harvard is much smaller than it is to schools with non-astronomical endowments.

  • capitalistimperialistpig


    I apologize for my obnoxiously feeble efforts at wit. I certainly didn’t mean it as a personal attack, as I am well aware of your reputation as an excellent and dedicated teacher (and am a fan of your book). I don’t think that the focus on research at the big universities is either a permanent or necessarily completely desirable condition however, and I’m not crazy about their ability to endlessly attract and accumulate wealth.

    The big private universities have become the mocern equivalent of the medieval monastery – semi-autonomous components of society that gradually accumulate vastly disproportionate amounts of the societies wealth. Society shouldn’t subsidize that unless they are delivering a pretty substantial service in return.

  • Mike

    I think the title should be “…Educating Students” not “…Educating People.” The mission of Harvard is not only performing scholarly work, but *sharing* it with other scholars. Thus education is an important component of all aspects of Harvard’s operations — just not so much education of tuition-paying students.

    Incidentally, I read an editorial for the NY Times that suggested an interesting policy with regard to ballooning private university endowments. The policy suggestion is, if a university does not spend a large enough fraction of their endowment every year, the various government research funding agencies “punish” them by forbidding them to charge full administration fees.

    This gets to the heart of what I see as the problem: the government should not be a vehicle driving inequality, but when it allows private institutions to charge excessive administration fees (as most of them do, relative public institutions) while at the same time building their endowment, this is indirectly what government is doing. Meanwhile, this particular policy is not really *punishing* of wealthy institutions — all it does is provide financial incentive for them to actually make research (or education) their *primary* mission (as in, having more priority than saving for the future).

  • Ellipsis

    One thing it’s certainly _not_ about are patent revenues, which are a tiny fraction of revenue. Patent revenues at U.S. universities are typically about 1-2% of federal and state research revenues:

  • Thad

    I recall as an undergrad at Berkeley, the local media cornered the vice provost regarding complaints from parents that too many courses were taught be TA’s and not professors. Isn’t the purpose of the University to educate the state’s students? The replay; No, it isn’t. A comprehensive university is a clearinghouse of human knowledge and wisdom. Teaching is just one way this knowledge is disseminated. I liked that definition and have used it here where I’m faculty to encourage vision growth as a school.

    I think the endowment in fact should be taxed. You don’t link to the other recent article on this topic:
    “Tax Exemptions of Charities Face New Challenges”

    The case involved revoking the tax-exempt status of a day care because they don’t actually give anything away, so how can they be called a charity? Tax exemption is because you can provide a service better than the government can. thus the tax normally collected to pay for that service is waived. What service does Harvard provide? Education obviously. But Harvard charges pretty much the same for every student. Some may get government grants, so in fact the government is already paying for the service. What about research? The government pay for the bulk of that as well.

  • Roberto Gonzalez-Plaza

    The first paragraph of the Harvard charter?? You may agree or not with it, which is besides the point, but there it is the reason for the Harvard framers, euphemistically speaking, to fund Harvard at all, the rest is commentary:
    WHEREAS, through the good hand of God, many well devoted persons have been, and daily are moved, and stirred up, to give and bestow, sundry gifts, legacies, lands, and revenues for the advancement of all good literature, arts, and sciences in Harvard College, in Cambridge in the County of Middlesex, and to the maintenance of the President and Fellows, and for all accommodations of buildings, and all other necessary provisions, that may conduce to the education of the English and Indian youth of this country, in knowledge and godliness

  • Sam Gralla


  • ike

    “CIP” and Sean are both ignoring what is really the central issue in academics today, and since Harvard is a leading U.S. academic institution, and is deeply involved in “technology transfer” and patent licensing efforts. However, CIP’s claim that this is a “private” phenomenon is misleading. The big public universities are just as deeply involved – take a look at the the University of California’s Technology Transfer Office, for example. It sure would be interesting to hear what CIP and Sean think about the role that Bayh-Dole has played in creating the current situation.

    It is also worth noting that Harvard itself seems to disagree with the title of this article – see what Bloomberg has to say:

    “Harvard, Yale Boost Engineering in Race With China (Update1)
    By Brian Kladko

    May 30 (Bloomberg) — Harvard and Yale are boosting their engineering programs because of increased demand and competition from China, where more engineering degrees are awarded each year than in the U.S…

    The growth in engineering reflects increased hiring needs of companies as diverse as biotechnology developer Genzyme Corp. and solar-cell maker SunPower Corp. The Labor Department anticipates an 11 percent rise in engineering employment in the U.S. between 2006 and 2016. While China says it annually turns out seven times as many engineers as the U.S., a Duke University researcher says that number is inflated, though the Asian nation does outpace American schools.

    U.S. engineering and technology degrees peaked at 97,122 in 1986, and fell 16 percent to 81,610 in 2006, according to the Web site of the Washington-based National Center for Education Statistics.”

    By the way, the claim that “it’s not about teaching, and it’s not about money; it’s about research” ignores the obvious point that one cannot do research without funding. How much does it cost to run a small research group, after all? A PI, a few technicians, a few postdocs, grad students, equipment, overhead, salaries? We are talking hundreds of thousands to millions of dollars per year – and high-energy physics experiments these days cost quite a bit more than that… Of course, we all like to portray ourselves as the modern equivalent of high priests, unsullied by venal monetary concerns, and focused on a higher, more noble mission… :)

    Scientists who want to preserve their reputations as “independent scientific researchers” really do have an obligation to roll back the Bayh-Dole makeover of academic institutions, and also to oppose the corporate takeover of public academic institutions in the U.S. The first step will be to repeal that bill.

  • Roberto Gonzalez-Plaza

    Amen it is, but actually I am not concerned with godliness here, maybe I should, I am concerned here with Indian youth as in Native American or American Indian among other appelatives. Indian youth has remained the lowest achieving group in science and else in all categories forever.

  • Julianne

    One wrinkle is that the money in the endowment cannot be spent in the same way as “real” money. A large fraction (and perhaps the majority) of the money is in the form of gifts tied to specific purposes. When a donor gives one million dollars to Harvard, they rarely just give that money outright, leaving it up to Harvard to decide the best way to spend it. Instead, they usually give the money to a specific purpose that resonates with causes they believe in (the rowing team, daily tea in a specific dorm, the biology department, etc). Legally, this ties the money to a limited use in perpetuity. If someone has endowed a professorship in railroad technology, then that money (and the money earned by that money) cannot be spent on scholarships or gardening or middle eastern studies or whatever other needs are more pressing. So sometimes, it becomes almost _impossible_ to spend down your endowment.

    I’d also like to point to the Carnegie Institution for Science as an effective version of “Harvard without the students”, at least for the sciences.

  • beowulf888

    Let’s not kid ourselves. Harvard has only one purpose, but they’ve been neglecting their duties ever since President Eliot reformed the curriculum.

    The Massachuesetts General Court chartered Harvard “To advance Learning and perpetuate it to Posterity; dreading to leave an illiterate Ministry to the Churches.”

    “Let every student be plainly instructed and consider well that the main end of his life and studies is to know God and Jesus, which is eternal life. And therefore to lay Christ at the bottom as the only foundation of all sound learning and knowledge.”

    So what the General Court giveth the General Court can take away… 😉


  • Mike

    There are several different issues that have entered this discussion. As to how the money should be spent, I don’t care to comment. Harvard has its own priorities, and historically these have defined its success. I see no reason why Harvard should limit its priorities to those outlined in its charter, as some posters seem to think. If this were required by law, I’m sure Harvard would simply amend its charter. Another poster excuses Harvard spending by noting that endowment income is typically not discretionary. I do not think this is a valid excuse. Harvard is not obliged to accept gifts — it can select among donors to ensure that gifts appropriately reflect its priorities. If Harvard has accepted gifts that direct funding away from its priorities, for example putting it at risk to lose tax-exemption, that’s Harvard’s problem.

    A separate issue is how much of its endowment should Harvard spend. Certainly, it has been to Harvard’s advantage to not spend all of its money, but invest in industry instead. But investing in industry is the job of industry, and is not a tax-exempt business. Harvard obtains tax-exemption via the promise that, ultimately, its revenues will be spent on other priorities. However, this promise loses meaning the less of these revenues are spent on a regular basis. Consider, for example, if Exxon announced that in the year 2500 it would liquidate its capital to feed the poor. Should this grant Exxon tax exemption? This possibility for ambiguity is resolved for charitable foundations by requiring they spend above a fixed fraction of their endowment to qualify for tax exemption. This seems to me to be a good rule for universities.

    I think this is an important issue, because a large imbalance in the resources of Harvard (and peer institutions) with respect to other universities does not seem to be a public good. Although Harvard attempts to be an equal-opportunity institution, it is not (by this I mean Harvard students do not reflect the demographics of the nation). As such, the prestige of Harvard plays as a vehicle for an advantaged class to perpetuate its advantage. That is, it more benefits the priviledged to have rarer opportunity for early-career distinction, since the priviledged start with a competitive advantage. The cure for this is greater parity — and competition — among a larger set of institutions. Part of achieving greater parity is inhibiting wealthy institutions from increasing the wealth divide. Among individuals in society, this is attempted with the progressive personal income tax. I think the philosophy behind this applies to universities as well.

    If one finds it impalatable to tax an research/education institution, this isn’t really necessary. These institutions are, of course, heavily subsidized by government, and this subsidy could just as well be used to accomplish the desired end. In practice, grant administration fees are probably more valuable to any institution than tax-exempt endowment revenues. As it stands, the federal government is a major enabler of institutional wealth inequality, as elite institutions generally get away with higher administration fees than other institutions. Tying these fees to endowment payout seems an effective means to encourage high endowment payout.

  • former harvard and berkeley student

    As a former student of both Harvard (which supposedly doesn’t take teaching seriously) and Berkeley (which apparently does) I can say that the worst, most apathetic teachers I ever had were at Berkeley. I don’t think we should kid ourselves: there’s not a particular sense of mission that sets Berkeley or UCSB professors apart from Harvard professors. Both are mainly concerned with their own careers and their own research. You’ll find both terrible people and gems in both places.

  • Roberto Gonzalez-Plaza

    I am pointing to the first paragraph of the anno 1650 Harvard chapter and Indian youth. The shadowing and fencing about teaching, taxes, patents, research, Nobel prizes and else is irrevelant for Indian youth. Most of them cant get an education. Nonetheless, Harvard tries and is trying harder and I was trying to concite your interest in this unusual opportunity to bring forth the inimaginable circumstances of Indian education and research, mostly unknown and purposefuly ignored. One example: the 100 buck laptop program could have started here AT HOME.

  • daisyrose

    Well it does say on the entrance to the Emerson building – “What is man that thou art mindful of him?”

  • capitalistimperialistpig

    #30 LOL indeed.

  • Roberto Gonzalez-Plaza

    and…”What is the son of man, that you care for him?”

  • ike

    It is beyond me as to why no one on this thread wants to talk about corporate university patent & licensing policy as it relates to Harvard’s endowment. I would take a look at this story for a good intro:

    “Today, Harvard and Nano-Terra Inc., a company co-founded by Professor Whitesides, plan to announce the exclusive licensing for more than 50 current and pending Harvard patents to Nano-Terra. The deal could transform the little-known Nano-Terra into one of nanotechnology’s most closely watched start-ups.”

    “It’s the largest patent portfolio I remember, and it may be our largest ever,” said Isaac T. Kohlberg, who has overseen the commercialization of Harvard’s patent portfolio since 2005. Nano-Terra, based in Cambridge, Mass., said that the patent filing and maintenance costs alone top $2 million.”

    “Terms of the deal were not disclosed, but Harvard said that it would receive a significant equity stake in Nano-Terra in addition to royalties.”

    So, how does that fit into the “non-profit” picture here? Is Harvard just another corporation, and are its professors just tightly controlled industrial scientists with little or no “academic freedom”? Seems like it – and that is all due to Bayh-Dole.

  • Jack M.

    Every major university bases tenure decisions on the amount of research performed ( exhibited by published papers) and the amount of grant money obtained. Harvard is not unique in this regard. The sad truth is no research university grants tenure to a good teacher. Tenure goes to people who bring in the big grants – period end of story.

  • TJ Colatrella

    Recently David Rockefeller stated that it was due to Harvard’s language requirement he went to Germany to study and was there to witness the rise of Fascism..

    So there you’ve got it folks right from the horses mouth..

    It’s Harvard that is to blame for the rise of The International Corporate Fascist Conspiracy..and here all along I thought it was Yale..

  • Alex F


    Whether Harvard’s goal is to educate students or to produce research, it’s sitting on a pile of 35 billion dollars that it’s not using for *either* purpose. That’s what an endowment is: money that hasn’t been spent. As commenters above point out, standard foundations have a requirement to spend X% of their endowment each year in order to justify their tax-privileged status; universities are exempt from these rules.

    Brad DeLong wonders why Harvard can’t spend that money to teach more students today. Don’t you wonder why Harvard can’t spend that money to produce more research today? If Harvard refuses to spend its money on either purpose but rather acts as an endowment-maximizing bank, it’s not clear why donations to the Bank of Harvard should be tax deductible.

  • Maynard Handley

    Sean, I don’t have a stake in this argument one way or another. I would, however, be interested in hearing some concrete numbers regarding your implied claim that Harvard’s endowment is intimately tied to its research.

    At one level I’m guessing this is obviously true. My suspicion is that tuition fees and similar such (whatever per student money the state provides etc) do not fully cover the costs of running the place. Thus some fraction of the interest generated by the endowment every year is being spent on the salaries of researchers, and that is good. Some fraction is also being spent on buildings, and that’s also good.

    Some fraction may also be being spent on library materials, and the goodness of that is debatable. By making a larger amount of money available for this purpose, purchasing a monopoly commodity whose prices have no anchoring in reality, Harvard is probably ramping up the profits of Elsevier and similar parasites, and making the world a whole lot tougher for every other university.

    But what about beyond this? Are there substantial scientific facilities on campus, elsewhere in the world, or in space, that were funded by Harvard rather than by NSF, DOE and the usual suspects? Are there huge arrays of gene sequencing machines that were not paid for by NHS? Are there archeological expeditions to Peru that are funded directly by Harvard rather than having the university simply act as a facilitator?
    These are not rhetorical questions; I honestly don’t know the answer.

    It does seem strange, however, that at a time when, for example, most Harvard faculty would regard it as a matter of vital importance than the US engage in something like an energy Manhattan project to look into ways of dealing with peak oil and greenhouse gas emission, Harvard is sitting on a massive pile of cash rather than, eg, funding a center for this subject, seeding it, and basically trying to start some momentum (that can then be augmented by federal government and industry money).
    If something like that is not considered an important enough way to spend the money available, one does have to ask exactly what DOES qualify as important enough.

  • Kaleberg

    Harvard may seem to be a research and education non-profit institution, but if you actually look at their books, you’ll see that they are basically an investment house which operates a research and education institution to provide them with a tax exemption. That $35 billion endowment did not come out of cash flow. The endowment was about $500 million back in 1970, so the growth rate has been on the order of 12%. Of course, a lot of that gain was in the form of tax free donations, including appreciated stock, but Harvard is noted for producing an excellent return on its portfolio.

    Tax law in the US draws a distinction between a tax exempt foundation and a nonprofit organization. Foundations are subject to stricter rules. For example, they are not allowed to accumulate income, and are required to distribute a certain portion of their income every year. If Harvard were a foundation, it would have to spend most of its portfolio income on education and research, and if they made more money, they’d have to increase their spending on their stated mission.

    A non-profit organization, however, is allowed to accumulate income. In fact, it may hold for-profit assets, but it needs to have a distinct wall isolating its business operations from its tax exempt operations. The case law is fascinating. If you think the folks at Cosmic Variance are clever, you should check out and see human ingenuity red in tooth and claw. (Or perhaps, that’s green, not red).

    One popular approach in the 1940s was a real estate transfer. For example, Yale created the Boola Corporation to buy the land under the Macy’s in San Francisco, hold it as a nonprofit, and lease it back to Macy’s. That and a number of similar deals were struck down. The Muller noodle company was actually a wholly owned subsidiary of NYU, and attempted to operate as a tax exempt, nonprofit noodle company. This led to changes in the tax code and they still teach the Muller Noodle case at NYU law school. (One doctor actually transfered his practice to a nonprofit and hired himself as a research employee whose job was to see patients). If you wonder why our tax code runs thousands of pages, look no farther.

    Are the big nonprofit organizations pulling a fast one? Are they basically pulling a Muller Noodle company scam, except operating as a financial firm, tax exempt under cover of their research and education arm? Shouldn’t they be treated more like a tax exempt foundation and be required to keep their spending on their pro bono mission proportionate to their income?

    I think that an awful lot of nonprofits have crossed the line. The mission for which they have been granted a tax exemption is no longer a central part of their economic make up. Harvard and its ilk should be restructured as two entities: a foundation to manage the investment fund and produce income and a non-profit research and education organization funded by the former, government grants and tuition payments. The folks at Harvard, if you haven’t noticed, are recognizing the issue. They’ve been extending financial aid up the income ladder, and it is costing them peanuts out of their investment income.

  • Mike M

    But if it is a scam, who is the criminal mastermind who is benefiting? Surely, this argument that Harvard is subverting a noble educational cause for evil capitalist ends only holds water if there is an evil capitalist behind the scenes creaming off the profits.

  • Maynard Handley

    Mike M
    Not every law in society, even those to do with taxation, is about restraining evil capitalists. There are other issues like efficiency and fairness that are also relevant.

    In Harvard we have a situation where Harvard, through the existence of this pile of cash, is making decisions that affect the economy. We can ask

    (a) is this efficient? Does it make sense to give Harvard a greater leverage (through its tax exempt status) in its degree of control over the economy than other actors (it has this control through its investment decisions) and

    (b) is this fair? It is, after all, allowing very wealthy people to avoid paying some taxes. We allow this tax avoidance in the case of “genuine” non-profits because we believe in the value of the good works being done. But when the primary good work being done is to grow the endowment ever larger, we can ask why the money so donated should be non-taxed.

  • Mike

    Just to enter some facts into the discussion, according to the Harvard Fact Book, Harvard has been spending 4.3% of its endowments market value the last couple of years.

    This spending comprises about 31% of Harvard’s revenues, which total very nearly $3B. If Harvard had spend 5% instead of 4.3% in 2007, its revenue would be larger by $150M. Although this could fund a tremendous amount of research, it also seems that even if Harvard had been spending 5% of its principle each year, the endowment still would have ballooned (over the last few years, it has been increasing by over $3B a year — having to draw an additional $150M would not have significantly hampered that growth). This is to say, treating Harvard’s endowment like a foundation would not have significantly inhibited its enormous growth in the last couple decades. On the other hand, it would have funded billions more in research/education.

    It is tempting to criticize Harvard for not spending much more than 5% of its endowment, given its performance has been so strong. But it doesn’t seem appropriate to *require* such high spending, as investment performance at other institutions wouldn’t support higher rates. And such criticism would be quite speculative — clearly Harvard is still the premier university in this country and the world, so it’s hard to argue it has suffered for ‘holding back.’

  • Mike M

    Still don’t think I quite follow the logic here. The reason why investment funds are taxed is because their profits are ultimately realized for the direct financial benefit of individuals. That is not the case here.

    So, yes, it gives Harvard a larger fund to invest, and hence more influence on the market, but what of it? There are always funds with more or less money that have more or less influence. Personally, I have no problem with extra clout being given to one where that clout cannot be used for the financial benefit of the already-rich.

    And, yes, it allows rich people to avoid paying tax, but only by giving untaxed money away, so they end up less rich than they would have been if they hadn’t made such a donation. So, again, where is the inequity?

  • Kaleberg

    Re: “But if it is a scam, who is the criminal mastermind who is benefiting? Surely, this argument that Harvard is subverting a noble educational cause for evil capitalist ends only holds water if there is an evil capitalist behind the scenes creaming off the profits.”

    The issue isn’t good or evil. There is no criminal mastermind. There is no issue of conversion. The issue is government spending. Tax exempt organizations are granted their status because they are providing some societal benefit, often a benefit which cannot be funded as a capitalist enterprise. Since our society has both capitalist and non-capitalist organizations, it is important that the government provide a level playing field and not provide tax exemptions for one noodle maker as opposed to another because the former is owned by a university. In my town we have a YMCA which runs a health club. This health club basically subsidizes a good bit of their charitable operations: youth outreach, subsidized day care, fitness for the disabled programs and so on. I also know a couple that has started a 24/7 health club, and they hope to make money on it, but they are concerned that they have to pay taxes, but the Y does not. (Washington State has really nasty business taxes. It’s the price we pay for not having an income tax).

    From time to time, it makes sense for our society to examine our spending in the form of tax exemptions. Do we have the right mix or rules and restrictions to get a good societal benefit, without raising every one else’s taxes to cover the relevant exemptions?

    As for Harvard; I’m not picking on Harvard. They are just one of the largest nonprofits. I’m not surprised that they could be run as a foundation, since in many ways they are structured as a foundation with a university built around it. Harvard actually takes its educational mission pretty seriously. They frequently tweak their core curriculum, and their more successful changes are often copied. Of course, Harvard does have some of the best students, so not all of their ideas are transferable, or scalable. Can you imagine Harvard with 10,000 or even 30,000 undergraduates? They would have to become a fair bit less selective, and I could imagine the uproar from the Ivies and other elite schools. When tweaking things, we have to be careful what we wish for.

  • Marshall Perrin

    This is a minor point, but #46 Kaleburg writes “Can you imagine Harvard with 10,000 or even 30,000 undergraduates? They would have to become a fair bit less selective, and I could imagine the uproar from the Ivies and other elite schools. When tweaking things, we have to be careful what we wish for.

    In fact Harvard has some 6500 undergraduates. The number of applicants has been steadily rising in recent years (in large part due to their increasingly sweet student aid policies). As a result, the acceptance rate has recently been 7-9%. Double the size of the school to 13,000, and you’d end up with an acceptance rate around 15-18% – right back where it was when I was admitted myself in the mid-90s. And nobody then would’ve called Harvard “less selective”! I suspect that Supersized Harvard would end up looking very much like Harvard does today – only with even more student groups and activities, and ten extra undergrad Houses crammed into Allston somewhere…

    I’m not disagreeing with your overall point. But the detail-oriented scientist in me couldn’t resist the temptation to inject some more numbers into the discussion.

  • Mike M

    Again, I am not sure I follow the logic here. I understand why your health-club friends might be annoyed that the YMCA offers similar services in a tax-exempt manner, which could be seen to be distorting a commercial market place.

    However, for the most part education is not a commercial market place. Indeed, society has recognized that there are serious problems in exposing it to such commercial pressures (“buy one degree, get one free,” etc). Aren’t Harvard’s tax-exempt privileges available to all educational establishments?

    On the investment side, they are in some sense competing with investment funds, but again not in any commercial sense since they aren’t pulling potential investors away from other funds.

    So, what is the issue?

  • Mike

    Mike M (#48): It seems to me there are many issues.

    (1) Tax exemption is granted to charitable gifts, and charitable organizations, because they are seen to provide a public good. Growing capital is NOT one of those public goods, or else we’d grant tax exemption to that in the private industry. Thus, when charitable organizations divert resources to growing capital, they are diverting resources away from the public services that motivate their tax exemption. One can imagine an extreme situation, where society becomes socially/culturally impoverished because all of its charitable organizations are diverting their resources to growing endowments, and not to their primary missions.

    (2) One can argue that Harvard is better at what it does because it competes with other elite universities. Historically, we have done just fine with the set of elite universities we have. But our society is growing, and growing more advanced, and it might be argued the circle of ‘elite’ academic institutions should grow to maintain healthy competition across the depth of academic endeavors in our advancing society. This requires inhibiting ‘advantaged’ institutions from too powerfully leveraging their advantage.

    (3) As much as Harvard strives to provide equal opportunity to its resources, as an elite university it still serves to perpetuate the advantage of a more privileged class, because it provides a means for those starting with an advantage to increase that advantage merely by institutional affiliation. I don’t think one can really blame Harvard, who simply seeks the most qualified students (and perhaps even sacrifices this aim in order to open its doors to at least some disadvantaged students) — but as a society we can try to muffle this trend by increasing the circle of elite universities. This requires inhibiting ‘advantaged’ institutions from too powerfully leveraging their advantage.

    All this said, I do think we (as a society) should proceed cautiously with such forms of ‘social engineering.’ As much as is wrong with our society, we’ve certainly got a lot of good things going for us, when you compare to the scope of human history. The Harvards of our society are among its most valuable resources, and it is important not to put those resources in jeopardy with speculative policies to improve the situation (or prevent a possible problem).

  • Kordan the Merciless

    Thoreau, an 1835 graduate of Harvard, said his real
    education didn’t start until after he left college.

    He also said of his diploma: “Every sheep should keep
    its skin.”

    Major universities are mainly there to crank out
    corporate drones – and this applies to science as well.

  • Pingback: Or What’s A Harvard For? « In Other Words()

  • Arun

    I think the best solution was to stop giving tax write-offs to donors to universities with endowments above a certain size. (Sorry, can’t find the link to the person who suggested it). The social utility of a donation decreases after a certain point.

  • http://n/a UbiDubi

    You people think too much.

  • Alex F

    “Still don’t think I quite follow the logic here. The reason why investment funds are taxed is because their profits are ultimately realized for the direct financial benefit of individuals.”

    Well… not exactly. The reason we have taxes isn’t to punish individuals by stealing their hard-earned cash — it’s to raise money for the government. Hypothetically at least, we try to do this in “fair” ways which inflict the least amount of damage to the economy. The fact that Harvard’s profits don’t go towards individual incomes is a reason *to* tax it, not to leave it untaxed, because reducing individual incomes is a bad thing that we want to avoid if we can. On the other hand, Harvard’s profits (supposedly) go to other good things that we don’t want to hurt. The government has essentially decided that we’re willing to leave nonprofit institutions untaxed (and therefore to tax you and me and everybody else more) because they engage in goals that the government considers worth subsidizing. But there’s nothing unreasonable about saying, Hey — we’re giving up a lot of revenue, and we’re not getting a whole lot back for it.

  • Roberto Gonzalez-Plaza

    It is sad that the size of the endowement brings so much attention, rather than attention focusing on what the endowement is supposd to be doing, which is, once again, according to the 1650 charter: “educate english and indian youth’. The Harvard Indian College died of market forces.

  • Bob Schambach

    For 30 years, I taught in a well know liberal arts college that really did value teaching, and promotions and salaries were strongly related to teaching abilities. One year I taught a night section of a course at a local major research university, and tried to get in contact with the Univ Prof who was currently teaching most of the other sections. He didn’t want to talk, but agreed to send me a copy of his “Class Rules” that he distributes to all of his students. Working in an environment where students were always welcome in my office, I was amazed, and probably a bit naive, when I saw his statement, “Each year there are a few students who feel it is necessary to talk with me. For those students, I have reserved 4:15 to 4:30 on Thursday afternoons. Your need to meet with me should be of such importance that you will be willing to cancel any other meetings/activities.” From then on, whenever one of my liberal arts college students complained to me that, “Where were you? You weren’t in your office”, I showed my student the Univ Prof rules about talking with him.

  • from a professor at a research university

    Well, I would like to thank the other commentators for bringing up the issue of the endowment. I knew it had grown to be huge, but I wasn’t really questioning this.

    Basically, I agree entirely with Sean’s thoughts. I am now a tenure track professor at a second tier research university.

    Like any other job, it doesn’t take a genius to figure out what is valued. Here I offer an easy way to figure out this stuff.

    Offer letters are not talked about openly, generally, but all that you have to do is look at one to get a sense of what is valued. My offer letter is about 2.5 pages. There is a small part of one paragraph dedicated to teaching. The great majority of the rest talks about “external funding” as a requirement (read: research grants), publications, and my startup money package.

    I’m new at my university (less than 6 months). During this time, the total time that I have spent talking/meeting/emailing about teaching with any other professor/dean/etc is about 1 hour (and, yes, I am expected to teach in the fall – it just isn’t important enough to actually discuss). In contrast, I have had many, many conversations and meetings about funding – conservatively, I’d say 100 hours on this. That *does not include* the two grants that I have already submitted and the one to three (depending on my choices) that I am about to start work on. (And I’m not even counting “minor” things like training grant applications for people in my lab; did those, too – and got the salary money for my people!).

    Need I say more? Again, it doesn’t take a genius to figure out what is valued…

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Cosmic Variance

Random samplings from a universe of ideas.

About Sean Carroll

Sean Carroll is a Senior Research Associate in the Department of Physics at the California Institute of Technology. His research interests include theoretical aspects of cosmology, field theory, and gravitation. His most recent book is The Particle at the End of the Universe, about the Large Hadron Collider and the search for the Higgs boson. Here are some of his favorite blog posts, home page, and email: carroll [at] .


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