And that business is now saying, yes, it will happily cash your $8.7 million taxpayer-funded check.
The name of this business: Harvard University. To be fair, Harvard is not the only well-endowed Ivy League institution receiving emergency assistance through the just-enacted — and quickly oversubscribed — Cares Act. Yale and Stanford universities, with similarly flush endowments, will receive about $7 million each, a small part of a $14 billion package to support institutions of higher education during the coronavirus pandemic.
And Harvard, after a massive social media backlash, announced Monday that it will allocate all of this federal largesse to students who receive financial aid. It had initially said that only half the funds would go to students in need. But that leaves the question: Why is Harvard — why are any of these rich schools — taking any money at all?
Why, when tens of millions are unemployed and many businesses are failing, did Congress neglect to apply any means-testing to the funds being distributed to colleges and universities under the Cares Act and simply limit federal assistance to struggling community colleges, trade schools and institutions without ample reserves? And, even if Congress fumbled, why are independently wealthy institutions of higher learning so unwilling to set a good example and use their own funds to take care of their students in this time of crisis?
I asked Harvard directly about these funds, and spokesman Jason Newton replied that “the school is just a pass through” to needy students. Newton further argued to me that approximately 80 percent of Harvard’s endowment funds are “restricted” and “must be spent in accordance with terms set forth by the donor.” As for the less than 20 percent of its $30 billion-to-$40 billion endowment that is “unrestricted,” those funds, and I am quoting Harvard here, “are critical in supporting structural operating expenses and transformative, strategic initiatives.”
To this University of Wisconsin graduate, there’s nothing more transformative or strategic than helping your own students with your own money. Harvard, Yale, Princeton and Stanford graduates are sprinkled throughout Washington, in Congress, on the U.S. Supreme Court and in top positions in the executive branch. These schools are synonymous with our national elites. The newly unemployed, waiting in line at food banks, are not interested in the funding formula that sent money to these elite schools. They are hungry and worried about mortgage payments or rent. They have every reason to think the system is stacked in favor of those with the right connections — and against them.
The entire $350 billion in designated small-business funds in the Cares Act has already run out: At some banks, the money was gone within minutes. Bank of America reported that it received more than 10,000 applications per hour. The Senate passed a $484 billion bill Tuesday with additional funding for small businesses, but how many more small businesses could have been helped by the millions in taxpayer funds now going to Harvard, Stanford, Yale and Princeton?
I think the decision-makers and “thought leaders” at these institutions should be ashamed. Harvard’s own alumni magazine wrote just this past January about its budget surplus, saying, “That cushion — surely the envy of other institutions of higher education — provides some protection against economic or financial adversity and creates flexibility in paying for the continuing campus construction boom.”
In this time of economic and financial adversity, it is time for all these well-endowed schools to open up their wallets. Less than 3 percent of Harvard’s 2019 budget surplus ($298 million) would cover its $8.6 million in taxpayer funds. Or ask these schools’ donors to lift the restrictions on their donations and repurpose the money to assist students. Or these elite institutions could simply do what Shake Shack did. The restaurant chain is returning the $10 million loan it was granted under the Paycheck Protection Program in the Cares Act — it’s going to take care of its employees itself. Let these schools do the same. Return the funds to the treasury and ask Congress to repurpose them for purchases of personal protective equipment for health-care workers, or beds for rural hospitals, or emergency food aid, or small-business relief — the list is long because the need is great.
Who knew that some of our most prestigious institutions of higher education could have so much to learn from Shake Shack?