From left: Claudine Gay, the president of Harvard University, Liz Magill, the former president of University of Pennsylvania, and Dr. Sally Kornbluth, the president of Massachusetts Institute of Technology

Haiyun Jiang/Bloomberg via Getty Images

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It’s Time for Congress to Open Harvard’s Books

The U.S. tax code and federal contracts swell the coffers of wealthy Ivy League universities that teach hatred is OK. Taxpayers should cut them off.

by
Adam Andrzejewski
December 11, 2023
From left: Claudine Gay, the president of Harvard University, Liz Magill, the former president of University of Pennsylvania, and Dr. Sally Kornbluth, the president of Massachusetts Institute of Technology

Haiyun Jiang/Bloomberg via Getty Images

In their congressional testimony last week, the presidents of Harvard, Massachusetts Institute of Technology, and the University of Pennsylvania refused to denounce terrorism or explain whether calls for the genocide of Jews represent harassment or bullying on their campuses. Parents who watched this spectacle are wondering where the $80,000 a year they pay in tuition is going, and whether the “education” their children are receiving is worth the price tag. American taxpayers who can hardly afford an Ivy League education but are equally disturbed by the moral rot they’re seeing might be even more alarmed to discover that they are personally underwriting it.

While parents should be free to pay for any form of education they want, the fact is American taxpayers contribute more to Harvard than the parents of Harvard students do. Prohibitively expensive universities that turn out students who believe that open antisemitism and championing terrorism are forms of “social justice” do so on the taxpayer’s dime. That’s because they all enjoy tax-exempt status as “educational” public charities. But are these institutions in fact serving the public interest? And how much are the lessons that students are learning at these wealthy “public charities” costing the American taxpayer?

The auditors at OpenTheBooks.com, a nonprofit government-spending watchdog which I direct, examined 10 universities—the Ivy League, plus Stanford and Northwestern. We found that during a five-year period from 2018-22 these wealthy universities collected $45 billion in taxpayer subsidies, special tax treatment, and federal payments. In fact, these universities collected a stunning $33 billion in federal contracts and grants. It therefore seems these schools are more federal contractors than educators—with federal payments exceeding undergraduate student tuition.

Additionally, the universities we surveyed profit handsomely from “nonprofit” tax breaks amounting to a benefit of roughly $12 billion. Wealthy universities pay only a 1.4% “excessive endowments” tax on their gains whereas wealthy individuals pay up to 23.4% on their capital gains.

The University of Pennsylvania, whose then-president (she resigned on Saturday), Liz Magill, seemed to smirk at the idea of being questioned by Congress, collected $3.7 billion in U.S. government grants and contracts, mostly for research, between 2018 and 2022. Over the same five-year period, Penn’s endowment ballooned to $21 billion from $13.4 billion.

It seems these schools are more federal contractors than educators—with federal payments exceeding undergraduate student tuition.

What is Penn doing with the U.S. government money it deposits into its swollen coffers? In September 2023, UPenn helped sponsor the Palestine Writes Festival, which organizers claim is “dedicated to celebrating and promoting cultural productions of Palestinian writers and artists.” However, the event showcased multiple writers deemed antisemitic by the Anti-Defamation League, most famously Pink Floyd’s Roger Waters, and, initially, poet Refaat Alareer. After the Oct. 7 massacre and reports that at least one baby’s remains were found in an oven, Alareer tweeted “with or without baking powder?”

Just days before Oct. 7, then-UPenn President Liz Magill had refused to move the event off campus. In the eyes of many donors, Magill then failed to sufficiently condemn or even bother to regulate or police ensuing protests that included chants of “from the river to the sea”—a call for the ethnic cleansing of Jewish citizens of Israel—and vandalism of school property. Angered donors include billionaire Cliff Asness, former trustee Vahan Gureghian, and venture capitalist David Magerman. In a letter to Magill, Magerman wrote, “I am deeply ashamed of my association with” the university. “I refuse to donate another dollar.” Investor Steve Eisman went so far as to demand his name be removed from a scholarship, telling CNBC, “I do not want my family’s name associated with [Penn], ever.”

An aide to House Committee on Education and the Workforce chairwoman Virginia Foxx said that Columbia University President Minouche Shafik was invited to the hearing, but had declined over a scheduling conflict. Nevertheless, Columbia’s own lightning-rod moments won’t soon be forgotten. Business school assistant professor Shai Davidai gathered students and asked them to record a 10-minute declaration in hopes they would spread it across the globe on social media. He called Shafik a “coward” for allowing pro-Hamas chants and rallies to go unchecked. “Imagine not being able to go to your work because your boss does not value your life, because your boss supports pro-terror organizations,” he said. His message for parents was brutal: “we cannot protect your child.”

Columbia’s five-year, taxpayer-funded haul? $5.8 billion in U.S. taxpayer money—while its endowment swelled to $13.3 billion from $10.5 billion.

That brings us to Harvard. Donor Bill Ackman, CEO of Pershing Square Capital Management, has helped spearhead the revolt of donors and Ivy League parents after dozens of university groups signed a letter blaming Israel for Hamas’ barbarism. Through open letters shared with journalists and exhaustive posts on X, Ackman has chronicled antisemitism at Harvard, calling the situation “dire and getting worse.”

Here’s just one example at Harvard: at a so-called “die in,” protesters physically surrounded an Israeli graduate student, blocking his vision and ability to navigate the campus. His fellow students grabbed at him, shoved him, and shouted “shame!”, boxing him in and intimidating him. While reports were filed with the university police department and the FBI, Harvard would not comment on internal disciplinary actions.

Harvard has collected $3.3 billion in federal contracts and grants. With a $50.9 billion endowment, Harvard obviously doesn’t need taxpayer money to coddle discrimination or antisemitism. But then why is it receiving federal money to begin with—not to mention massive federal tax breaks on its endowment?

Following the congressional hearing, multiple UPenn students filed a lawsuit against the school for running afoul of civil rights law by failing to apply its code of conduct against anti-Israel agitators, hiring “rabidly antisemitic professors” and ignoring requests for help from Jewish students. Speaking to reporters at the Capitol complex, plaintiff Eyal Yakoby said, “36 hours ago, I along with most of campus, sought refuge in our rooms as classmates and professors chanted proudly for the genocide of Jews while igniting smoke bombs and defacing school property.”

If none of this sounds particularly charitable, there is plenty to be done about it. Currently, these institutions can both fundraise from vast alumni networks while also raking in billions from the government. While donors pad the endowments that ostensibly keep the lights on, prestige-building research is funded to the hilt by taxpayers. But the same body that held this tense hearing also holds America’s purse strings.

In addition to examining the tax-exempt status of institutions that tolerate open antisemitism and other expressions of radical bigotry, House appropriators need to go line by line with a red pen through the $7 billion doled out each year to these 10 wealthy universities. A laundry list of projects are either wasteful, wacky, driven by radical ideology, or all of the above. In 2022, Penn spent over $700,000 studying “structural racism and discrimination in pandemic vaccine allocation.” It spent $2 million of our tax revenue to “support the preservation of cultural heritage sites” of minorities in northern Iraq.

In 2012, Columbia famously spent $5.7 million on fake voicemails from the year 2065, after the world has supposedly been decimated by climate change. Cornell in 2014 took $1 million for a study, “Where It Hurts the Most to Be Stung By a Bee.”

More fundamentally, lawmakers should revisit what it means to be a public charity in the tax code. As others have observed, these wealthy universities are “hedge funds with schools attached.” Why such wealthy institutions should continue to enjoy public sponsorship while incubating discrimination, racism, and antisemitism and advocating on behalf of terrorists seems like a good question for Congress to answer.

Public funding of any type of discrimination simply cannot be tolerated.

Adam Andrzejewski is CEO and Founder of OpenTheBooks.com, the largest private database of public expenditures.

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