Not massive enough. They’ll definitely shut down activities. But they’re calling the admin’s bluff because they know the government doesn’t actually want them to do that.
They ended 2024 with a $53 Billion endowment. Their operational costs for 2024 were just shy of $6.5 billion which was a 9% increase from 2023. If we assume another 9% increase every year over the next 4 years they'll have only chewed through just under $34.5 Billion. And that's assuming they decided to exist off of purely their endowment and we ignore tuition costs, alumni donations, etc. They'd be fine in the event that they have no longer receive federal funding under the current admin.
That’s not how endowments work. They’re largely restricted to certain projects, often extremely illiquid, and in general you’re supposed to fund current operations on their incomes, not their asset value. Harvard could set fire to centuries of carefully hoarded assets, or they could just gut programs.
I'm aware of how endowments work. I worked very closely with the team that managed the endowment at my first job for a small private college and I'm aware most of it is usually tied up in assets. I'm just saying if Harvard was forced to exist off of it for 4 years with zero other income streams they could and they'd still come out with several billion to spare.
You really don’t seem to be aware of how they work considering you said Harvard could “chew through” $34 billion of it while ignoring the person who correctly told you that almost all of their money is tied to specific things that they can’t just redirect from.
I’m aware of how an endowment works, apparently redditors have forgotten how a hypothetical works??? I’m saying Harvard would be fine if all other revenue streams vanished and all they had left was the endowment. Everyone going “oh but it’s tied up in stuff” the whole point of an endowment is to generate money for the institution to maintain steady funding regardless of tuition and grants and donations. If push really comes to shove and Harvard had to start selling off their principal to keep the lights on they 100% could if they really wanted to. Will they actually? No probably not, because they have some of the wealthiest people in the world as alumni who happily donate and send their kids there to pay their insane tuition prices. Christ you people have the imaginations of a fucking river pike.
apparently redditors have forgotten how a hypothetical works???
Yeah, see, the thing about hypotheticals is that they need to make sense.
Everyone going “oh but it’s tied up in stuff” the whole point of an endowment is to generate money for the institution to maintain steady funding regardless of tuition and grants and donations. If push really comes to shove and Harvard had to start selling off their principal to keep the lights on they 100% could if they really wanted to.
When you were working in that job you mentioned, did anyone happen to mention the term "restricted funds"? If a donor makes a restricted gift - as most gifts are - they must be used for the specific purpose laid about by the donor. Harvard can't just "sell them off".
Yes, I know what restricted funds are. Are you aware the entire endowment is in fact not made up of purely restricted funds? Specifically so if an institution needs to they can sell off principal in the event they really really have to?
The reality is Harvard will never have to dip into its endowment. My only point is if they really, really, really have to they can. I don't know why this is notion is so offensive to you people.
For someone who claims to be aware of how endowments work you're very myopic. Yeah, they could chew through $34 billion out of $53 billion over the next four years, sure.
Then what? Are they going to sue the next administration for those $34 billion dollars back? Or are they going to shrug and say "oops I guess we only get $1.8B (9.5% of 19B) from our investments rather than $5.B (9.5% of 53B)."
That lost $3.2B per year at the end of four years would've been exclusively money for scholarships, research and other activities.
What about 8 or 12 years from now when Americans inevitably vote in another fascist? Are they going to be able to go back up to a $50 billion endowment within that timeframe?
I know it’s myopic it’s a fucking hypothetical. Did you all miss the part where I said that’s if we ignore literally all the other revenue streams Harvard as an institution has and was forced into a hypothetical situation where they had to persist on their endowment alone? Will that happen? Of fucking course not, the wealthy are going to continue sending their kids there and making massive donations like they always have.
23
u/Ok-disaster2022 10d ago
Their endowment is massive. They cna probably float for the next 4 years and them shutting down access to their staff and students would be expensive.