Thursday, February 22, 2007

The $911,163,132 questions

By Bryan O’Keefe

Our friends over at Inside Higher Ed have a very interesting story this morning on charitable contributions to the academy. According to the Council for Aid in Education, colleges and universities received an astounding $28 billion dollars in charitable contributions in 2006, up 9.4 percent from the year before and a new record high. Looking at individual schools, the usual suspects were at the top of the list – Stanford taking in $911,163,132, Harvard at $594,941,000, Yale at $433,461,932, and so forth and so on (Inside Higher Ed has the top 20).

This finding raises two important questions. First and foremost – when your contributions received are now nine-digit (and for Stanford approaching ten digit) figures, the question must be asked, what exactly are these colleges and universities doing with these funds? Why are any of the colleges on the top 20 list raising tuition at all? More importantly, should we continue to spend vast amounts of federal monetary resources when it appears that the colleges and universities are quite capable of providing greater financial aid themselves? When you see these types of figures thrown around, it makes the calls for greater funding of higher education appear more like corporate welfare than aid for struggling non-profits, at least for the top schools.

The second interesting question is one that Wick Sloane discussed a couple of months ago in one of our Perspectives pieces. Namely, is it the proper function of federal tax policy to subsidy these types of large gifts and fundraising campaigns? Or are these gifts and campaigns simply the “rich getting richer” at the expense of taxpayers? While I don’t think that the tax deductions for higher education gifts should be eliminated entirely, there should at least be some discussion about whether or not there is a better way of using tax policy to make higher education more affordable and accessible.

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