Harvard is the primary college to reject President Donald Trump’s demands, which require the college to make sweeping adjustments so as to maintain its $2.2 billion in federal funding, and is subsequently now going through a freeze on these funds, which the college has known as each unlawful and unconstitutional.
The federal government’s calls for comply with a review of nearly $9 billion in federal funding to Harvard, and are available amid a broad crackdown on school campuses aimed toward axing DEI and limiting free speech, underneath the guise of eliminating so-called left-wing ideology and antisemitism. Harvard college have sued to dam Trump from pulling their funding, and filed a short lived restraining order labeling the threats a “gun to the head.”
Harvard’s act of resistance brings up two very totally different however essential questions, one political, and one monetary: Will this set a precedent for different universities to comply with, and the place does Harvard get its funding, anyway?
What does Harvard’s resolution imply for different universities?
First issues first: Harvard College didn’t simply quietly reject Trump’s overreach. College President Alan Garber made a daring present of resistance, in a letter to the campus neighborhood, stating that the federal government’s calls for “violate Harvard’s First Amendment rights and exceeds the statutory limits of the government’s authority under Title VI,” and that “no authorities—no matter which celebration is in energy—ought to dictate what non-public universities can educate, whom they will admit and rent, and which areas of examine and inquiry they will pursue.”
Some commentators have stated Harvard discovered from Columbia University’s mistake. In caving to Trump‘s calls for, Columbia might be pressured to acquiesce in quite a few methods, together with hiring three dozen campus officers “who can have the flexibility to take away people from campus and/or arrest them when acceptable.” The administration additionally has paused federal funding for the College of Pennsylvania, Brown College, Princeton College, Cornell College, and Northwestern College, in response to the AP.
Former President Barack Obama praised Harvard’s decision and inspired different establishments to do the identical. As the New York Times reported, Harvard’s stance might set a precedent for different universities, and empower legislation corporations, the media and courts, and different targets to additionally push again. (In truth, on Tuesday, Columbia’s president released a statement seemingly backtracking and maybe following Harvard’s lead: “We’ve got not reached any settlement with the federal government at this level . . . We might reject any settlement during which the federal government dictates what we educate, analysis, or who we rent.”)
The place does Harvard get its cash?
This leads us to our second level, the place does Harvard get its funding?
It’d come as a shock, however whereas Harvard has an enormous endowment of $53.2 billion, it relies on several other sources beyond that for its funding.
These embody federal and nonfederal analysis grants, tuition and charges, and items from alumni and others. Harvard acquired roughly $2.4 billion from its endowment in fiscal 2024, which made up solely 37.5% of its general working price range of $6.4 billion. The college’s $686 million in federal funding represents roughly 16% of its working income.
Nevertheless, Harvard can faucet solely 20% of its endowment for discretionary spending to go towards the cash misplaced by Trump’s freezes. A majority of the endowment distributions are restricted by donors, each legally and from stipulations from donors, in regard to how Harvard can spend that cash.
One other manner Harvard is ready to cowl its excessive prices is that it doesn’t pay federal or state taxes. Many individuals don’t know that most major colleges and universities, including Harvard, are tax-exempt organizations.
On Tuesday, Trump threatened to remove Harvard’s tax-exempt standing in a publish on Truth Social, saying, “Maybe Harvard ought to lose its Tax Exempt Standing and be Taxed as a Political Entity if it retains pushing political, ideological, and terrorist impressed/supporting ‘Illness?’”
Based on its web site, Harvard is exempt from federal income tax as an educational institution underneath Part 501(c)(3) of the Inside Income Code of 1986, as amended. As an academic establishment, Harvard can also be exempt from state earnings tax in Massachusetts, the place it’s positioned.
Add comment