By Peter Wood
April 14, 2017
Reading the new report from Open the Books about the amounts of money the eight Ivy League universities manage to extract from the public purse makes me feel like the tiny antennae on a tiny green bug.
The report, Ivy League, Inc.
, details how Brown, Columbia, Cornell, Dartmouth, Harvard, the University of Pennsylvania, Princeton and Yale pulled down a total of $41.59 billion in taxpayer-funded payments and benefits from 2010 through 2015. My organization, the National Association of Scholars, runs on an annual budget of $1.3 million, none of which comes from the government. But I wave my little antennae proudly.
How the Money Stacks Up
$41.59 billion buys a lot of ivy. A significant portion of that was spent in ways that might trouble ordinary observers. Ivy League universities in this period, for example, received an estimated $3.7 billion in local government property tax breaks. Some received government funds for research projects that many Americans would object to on moral grounds, such as the $882,841 Cornell received to help Latino "patients and family caregivers reframe their beliefs" about dying. The $23.89 billion the Ivy League universities received over five years in federal grants included Brown University getting $53,419 for a case study on how to teach gay Mexican prostitutes to practice safe sex.
From the tiny green bug’s perspective, the Ivy League haul of $41.59 billion over five years seems like a lot. But I can understand that the Ivy League institutions themselves see it as no great shakes. Americans after all, support a U.S. "postsecondary education" industry, as the economists like to call it, at the level of roughly a $500 billion per year. That puts it in the neighborhood of 3.6 percent of the GDP. For context, manufacturing accounts for 12.1 percent of the economy, and construction about 4.2 percent.
Annualized, the Ivy League’s $8.2 billion is only 1.64 percent of what all of higher education spends in a year—and it is spread over eight universities. Surely we taxpayers owe at least that much tribute to Harvard, Yale, and Princeton, et al. for the privilege of residing in the same country.
The closer one looks at the data in Ivy League, Inc., the greater the temptation to behave boorishly and to say things like, "The rich are getting richer." Or to join up with the insurrectionists who want to tax the endowments of the Ivy League universities. Class resentment, however, is a terrible thing. We must do our best to recognize that when the Yale administration dedicates $50 million to pay off their version of Black Lives Matter protesters, and Brown University reaches further by dedicating $165 million to the same cause, they are expiating not just their own sins but the sins of all Americans.
Cushioning the Blow
$41.59 billion may be only a small fraction of the nation’s annual expense for higher education, but it still seems like a lot of money. Let’s cut it down to size. What would the Ivy League’s $41.59 billion buy if it were expended in a lump sum? It would cover the GDP of Lithuania for one year ($41.2 billion, according to the World Bank). It could have covered the market value of the company Uber in December 2014. And it is an amount equivalent to what American businesses walked away with in unredeemed gift cards from 2005 to 2011. In other words, the Ivy League bonanza of taxpayer funding during that five-year period doesn’t look like enough to buy a decent-sized small country or a somewhat risky ride-sharing business, and Americans have been frittering away at least that much cash on unused gift cards—which are arguably worth even less than an Ivy League education.
Ivy League, Inc. does not provide these helpful comparisons to cushion the blow of that hard number, $41.59 billion. I throw them in to make up for my failure to put a trigger warning for fiscal conservatives at the head of this article. Open the Books is a brusquer, facts-only organization that doesn’t care about your feelings. It just uses freedom of information requests to pry financial data out of federal, state and local government. It has employed its data collection and analysis to study federal funding for sanctuary cities, to investigate the Small Business Administration’s bad loan portfolio and to study the EPA.
Closing the Books
According to Ivy League, Inc., the eight universities received a $9.56 billion tax break on their collective $27.3 billion growth in endowment funds. They received more money annually on average during the five years than sixteen states. Collectively, they employ 47 administrators who each earn more than $1 million per year. But I recommend that the reader, now appropriately forewarned, examine the report for himself.
Yes, those eight universities are notorious incubators of bad ideas, unearned privilege and divisive ideologies. But that’s not all they do. Their laboratories still produce first-rate science; they still maintain micro-niches for the traditional humanities that are elsewhere on the verge of extinction; and the idea of intellectual excellence still smolders somewhere in their souls, even if it is buried beneath heaps of preference-driven and grievance-celebrated mediocrity.
Ivy League, Inc. is mainly a voice of indictment. These universities abuse their special status. Curing them of their greed and fostering a resurgence of what is best in them will be hard work. Ivy league, Inc., is a start.