Responding to Harvard University’s defiance of the coercive and illegal demands from the Trump administration, some major donors have recently urged the university to make accommodations rather than fight. A few have withheld large gifts over the last year and a half.
Holding degrees from two of Harvard’s least wealthy schools (Divinity and Education), I have made small annual donations to my relatively impecunious alma maters for 45 years, and I offer these considerations to weigh against those of the big donors who have generally graduated from Harvard’s wealthiest, so-called major schools.
Harvard’s resistance to authoritarian overreach bolsters the entire system of U.S. higher education, which came to be regarded as the best in the world only in the 1970s, after a century of slow development. Harvard’s defiance of unlawful authoritarianism inspires universities throughout the world.
This controversy is therefore not just about Harvard, but all of higher education everywhere. If Harvard caves, then no university will dare to defy governmental overreach. If Harvard resists, then others will be inspired to do so and shamed if they do not.
The urging by major donors to strike a deal with the Trump administration may result from feeling that Harvard’s small and secretive governing board, the Corporation, has, in recent months, not listened to them and ignored “the rightward shift of the country” that prompted Trump’s demands. (Although Harvard’s “major” and wealthiest professional schools—business, law and medicine—still graduate leading financiers on Wall Street and conservative justices of the Supreme Court, notwithstanding claims about the university’s “sins” of left-wing radicalism.)
In any case, the implied threat of major donors to withhold donations is transactional, just like the demands of the Trump administration. Thus, Harvard is caught between two transactional parties. Is the defiance of coercive and illegal overreach worth the possible loss in large gifts?
And the loss could be considerable. Over the last century, the rule in higher education fundraising is that 90 percent of gifts come from the top 10 percent of donors. Big donors count. Little ones scarcely, it seems.
But there are financial counterpoints.
By adjusting the spending rule for its endowment income and by floating bonds and loans, Harvard does have the resources to supplant lost federal income until its legal challenges are litigated, notwithstanding the prospect of further demands by the Trump administration.
Indeed, the annual investment income of large endowments vastly exceeds annual fundraising. As a result, wealthy universities were already shifting their focus from “gifts to growth” of investment yield by the beginning of the 21st century. Fundraising became less important than investing endowment.
Furthermore, major alumni donors, who might fear alienating the Trump administration by donating to Harvard, could easily make donations anonymously, which has long been a tradition in higher education.
Finally, and most importantly, Harvard’s defiance has already inspired support from many alumni who may now do more, counterbalancing the support of transactional big donors who withdraw.
I know that some little donors, like me, have not included Harvard in their estate plans precisely because Harvard has seemed so rich and invulnerable. As former president Drew Gilpin Faust once observed, Harvard’s commitment to its endowment could make the university “as close to immortal as any earthly institution might be.”
Now we see that Harvard needs the support of all of its alumni in these perilous times, not only for the sake of alma mater, but all of higher education.
