Hoarding endowments: How poor students and taxpayers preserve the wealth of private higher education

Hoarding endowments: How poor students and taxpayers preserve the wealth of private higher education

Buried in this story about elite universities' practice of hoarding endowments while squeezing money from Uncle Sam and poor students is a nugget of information on which the otherwise all-knowing Nonprofiteer has previously failed to focus: that colleges and universities are exempt from the 5% distribution rule which controls hoarding by foundations.  Institutions of higher education are operating nonprofits, and under ordinarily circumstances no one would expect an operating nonprofit to give away any portion of its wealth.  But multi-million and even billion-dollar endowments are not ordinary circumstances.

So the answer to the Nonprofit Quarterly's question---"Should wealthy colleges and universities spend more from their endowment earnings to help low-income students?"---is: Ya think?

 

 

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  • I think that it’s funny that Universities with $1 at least billion in endowments are continually raising their private educational rates. Harvard, Yale and the others ought to utilize this cash to hold the private educational costs down. Be that as it may they accumulate it like a cluster of scrooges.

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    The Nonprofiteer is Kelly Kleiman, principal of NFP Consulting, which provides Board development, strategic planning and fund-raising services to charities and philanthropies. Through her consulting practice and in her guise as The Nonprofiteer, Kelly has spent the past 25-plus years helping small and mid-sized nonprofits organize themselves better and raise more money. These days she focuses especially on helping them use high-skill volunteers. Kelly is also a lawyer and freelance journalist whose reportage and essays have appeared in the New York Times, Wall Street Journal, Washington Post, Christian Science Monitor and other dailies; in magazines including In These Times and Chicago Philanthropy; in the alternative press; on websites including the Huffington Post; and on the radio, including the BBC and WBEZ Chicago Public Radio. She and her fellow "Dueling Critic" Jonathan Abarbanel present a weekly podcast of their reviews of Chicago theater at DuelingCritics.net. Earlier in her career she was dean of admissions of IIT Chicago-Kent College of Law and Executive Director of the Chicago Children’s Choir, and practiced real estate and zoning law with the firm of Rudnick & Wolfe. Kelly holds undergraduate and law degrees from the University of Chicago. She was a founding Board member of the Association of Consultants to Nonprofits and also served for 5 years on the Board of the Association for Women Journalists–Chicago. She can be reached ("Dear Nonprofiteer . . .") at KellyNFP@yahoo.com.

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