Universities rely on taxpayers for research grants while sitting on cash
Elite universities grew their endowments by billions while using federal grants and contracts to fund their activities, according to a new report from a government watchdog.
The report from Open The Books showed how institutions like Harvard University take in taxpayer subsidies, even though they have plenty of money to spend. The leader of the watchdog group said elite universities need to “start paying their own way.”
“What’s clear is that the enormous endowments these schools are sitting on could fund their activities entirely if they chose to invest in their education mission,” Adam Andrzejewski, founder of Open The Books, said in an email to The College Fix.
“Instead, they offload their research onto the backs of taxpayers, while growing their cash-value endowments to stratospheric levels,” Andrzejewski said. “The Ivy League and other elite colleges need to lighten the load on the American taxpayer and start paying their own way.”
His new report examined the endowment growth between 2018-2022 for the eight Ivy League schools, Stanford University, and Northwestern University.
None of the universities mentioned in the report responded to requests for comment.
The Fix reached out via email three times in the last two weeks to all ten universities listed in the report, asking whether there was any missing context and if they had any additional commentary on the findings.
The universities collected thirty-three billion in federal contracts and grants alone.
“Since 2018, $33 billion of federal contracts and grants flowed to these ten colleges – averaging $6.6 billion annually,” the report stated. At the same time, “they were collecting large private-sector donations to pad their enormous endowments.”
“The collective endowment of these elite schools grew by nearly $65 billion since 2018. The amount of federal contracts and grants outpaced the collection of undergraduate student tuition, Open the Books reported. “Today, these elite schools are more federal contractor than educator.”
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The government transparency advocate criticized the universities for manipulating tax breaks on the grounds of being “charitable organizations.”
“These colleges are exempt from most federal taxes, and they pay only a minuscule 1.4 percent tax rate on excess endowment growth, rather than the 20 percent capital gain tax that investors must pay,” Andrzejewski said in an email to The Fix.
“Tax breaks alone saved these wealthy universities at least $12 billion since 2018,” he said. “These elite institutions receive special treatment because they are classified as charitable organizations that do good for Americans and the world at large.”
According to Open The Books, millions in federal contracts and grants went into “woke” research and not to vital research into “cancer, heart disease, diabetes, etc., that the universities usually cite to avoid taxation.”
“Woke doesn’t mean broke within our elite institutions,” the report stated.
The elite institutions used taxpayer money to fund research into subjects such as, “$4.173 million in 2022 for Cornell to ‘increase the number of minoritized faculty in the biological, biomedical, and health sciences’ through a partnership with [National Institutes of Health]” and “$2,984,994 from 2018-2021 to Stanford from NIH to study ‘sex hormone effects on neurodevelopment in transgender adolescents.’”
The report identified “$2 million in 2018 from the Department of State to University of Pennsylvania to ‘support the preservation of cultural heritage sites of minority communities in northern Iraq.’”
Andrzejewski said the question is if the universities are “operating in the public interest or their own special interest.”
“We support Congress holding hearings to hold these schools accountable and to slap caps on the billions in grants, contracts, and special tax carve-outs,” Andrzejewski told The Fix.
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IMAGE: Open the Books/Substack
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