Ivy League universities, particularly Harvard and Columbia, have been in crisis since October 2023, when both schools were revealed to be places where blatant anti-Semitism was openly prevalent. Amid anti-Semitic violence on campus, the presidents of both schools were also charged with academic plagiarism. Alumni and donors, who expected more from the school's leaders and did not share their apparent tolerance for Jewish hatred, stopped making financial contributions.
As the reputational and financial damage mounts, Harvard University President Claudine Gay… resigned Colombian President Minouche Shafik disgraced last January I followed you In August.
Despite an endowment of more than $50 billion, Harvard University had to rush through a bond issue earlier this year and needed to raise $1.6 billion in cash right away.
But as the Toxic Ivies still try to find a way to balance their hollow commitment to “tolerance” with widespread anti-Semitism mitigation demanded by many in the faculty and student body, donors remain There has been a rebound, and fundraising continues to be a struggle.
In early October, Harvard University's new president, Alan Garber, was teased by some: very bad economic news The Harvard Crimson reported that Garber said, “Some of the new promises have been disappointing compared to years past.” In discussing the passion of alumni who are concerned about Harvard's current culture and events, Gerber added, “They're pretty vocal.”
The bad news came a week later. harvard crimson reported:
Harvard University's funding crisis now has a price tag of $151 million. Total philanthropic giving fell 14% in fiscal year 2024 after several billionaire donors publicly cut ties with Harvard over its response to anti-Semitism on campus. This $151 million decrease represents one of the most significant year-over-year declines in giving in the past decade.
Columbia University's donor crisis has worsened. The university held its annual “Giving Day” event this fall, but donations were down 29% from the previous “Giving Day” in 2022 (the university community responded to the Hamas terrorist attack in October 2023). Due to confusion on campus regarding support, Giving Day was not held in 2023.
columbia spectator I told you the bad news.:
Columbia University held its 12th Annual Day of Giving on Tuesday, raising a total of $21,362,592 after a one-year hiatus, a 28.8 percent decrease in funding compared to the record 2022. .
The number of donations is down 27.9% this year, from 19,229 in 2022 to 13,870 in 2015, as the university grapples with a donor crisis stemming from concerns over campus protests. It was the lowest since then. Since the event's inception in 2012, total donations have decreased from previous Giving Days.
Over a two-year span, the situation at Columbia University is truly catastrophic. The university raised a combined $58 million in 2021 and 2022, but the total plummeted to just $21 million in 2023 and 2024. The $38 million decrease in biennial giving represents a 64% decrease.
Both schools appear to be facing a liquidity crunch as endowments dwindle.
Despite an endowment of more than $50 billion, Harvard University had to rush through a bond issue earlier this year and needed to raise $1.6 billion in cash right away. The university raised $750 million in taxable bonds through Goldman Sachs and received approval from the state of Massachusetts to issue up to $2 billion in state tax-exempt bonds. But investor demand supported only $735 million of those state bonds, leaving Harvard more than $100 million short of its $1.6 billion goal.
Even further declines in endowments in the meantime won't help Harvard's cash crunch.
According to published reports, Harvard's endowment accounts for only about 20% of its liquid assets (cash, stocks, bonds), with about 40% in private equity, 30% in hedge funds, and 10% in Invested in real estate and other non-current assets.
A few months ago, a millionaire Bill Ackman pointed out that This means that Harvard's budgeting and endowment management relies on certain assumptions about alumni giving. These assumptions did not take into account the potential for donor revolt and the significant decline in cash gifts this year. Ackman speculated that Harvard's urgent need for cash to offset losses in its endowment, especially given the current high interest rate environment, may have led to the recent bond issuance.
journalist Ira Stoll revealed Much of the cash raised by Harvard was used to repay maturing debt issued at low interest rates and to roll over some short-term debt.
I don't know enough to question the validity of Harvard's illiquid investments, but I do know that Harvard's famous endowment is extremely illiquid and has several years of lead time in preparing for bond maturities. Even so, it is reasonable to question its “investment strategy.” Because investment assets cannot be converted into cash to repay maturing bonds, new high-interest debt is required. If an investment cannot ultimately be converted into cash, what happens to its value?
Columbia University too announced A few weeks ago, the company also entered the debt market for a cash injection. Colombia is seeking to raise about $500 million in new debt, despite having an endowment worth about $15 billion.
Ivy League schools, especially Harvard and Columbia, have exhausted their reputational capital and are now also exhausting their working capital. They have shown themselves to be morally and ethically bankrupt. If liquidity problems are not resolved and donors permanently reduce their regular cash lifelines, Harvard and Columbia universities are likely on the verge of financial collapse, too. It will take a long time.
