over 9 years on 2009-05-03


sitting in harvard square, i am feeling a bit in the mood for a harvard post....  for several years i have served as a representative of my class to the harvard college fund.  every year, as requested by the college fund, i have written a very small but personally not inconsequential check (actually, credit card charge) and dutifully gone out and asked my classmates to financially give back to their university.

i have always been more than happy to play this role.  i believe in it.  while a few hundred dollars from a recent graduate truly is inconsequential to a school with tens of billions of endowment dollars,i feel that i owe a great deal to the university.  further, i am very happy to be able to direct my dollars to specific causes at the university which are relatively less well funded (though i think it is very important to seriously underline the word relatively).

in almost all cases, my classmates and friends also contribute on the same thesis.  we all owe a lot back to an institution that directly and indirectly intellectually gave to us on a level which far outstrips the tuition we paid.

when people decide not to give back to the university, is is almost always based on the argument that they give to more 'needy' causes and charities.  after all, isn't it hard to justify giving more money to analready wealthy institution when people are literally starving, dieing of curable diseases, and facing incredible political oppression allover the world?

this year puts these issues in very stark contrast

on one hand, in the wake of one of the worst financial years in american history many many very important and needy charities are facing serious shortfalls and will have trouble supporting exceedingly immediate, humane, and important causes.  this is only compounded by the fact that some truly distasteful characters (like madoff) literally robbed these causes blind.  many worthy institutions face extinction,and those whom they support are in very dire need.

at the same time, on a relative basis, harvard also faces serious financial shortfalls.  especially after exceedingly bold recent initiatives around financial aid, the university is hardly the picture of financial health.

what is an individual with a limited charity wallet to do?

i have thought long and hard about this.  is it downright irresponsible to give harvard money this year of all years?  do the obligations i feel change in an extreme environment?  is harvard on the wrong side ofa diminishing marginal donation curve?

it is honestly a tough call.  there is not a cut and dry answer which i find fully satisfying, but after a lot of consideration i am going to give the same relatively small but personally meaningful check i did  last year.  i feel very good about this decision, and i will urge my classmates to do the same.

it isn't that i have any true delusions that my few hundred dollars is actually meaningful to the bottom line shortfall - it isn't.  while my emotional sense of pure obligation plays a role in this decision, that isn't the primary factor either.

what it comes down to is leverage on leverage (in a positive and transparent form - not the sub-prime form).

i think that harvard, and many other similar institutions, have an incredibly important role to play in our society in furthering the farthest reaching bounds of knowledge and science, as well as training some of the most driven and intelligent social actors of the future. critically, they have a role doing this in an environment beyond the biased reaches of governments and economic actors.

we need very strong entities harvard that have the institutional fortitude to play that non-partisan role, and to do that - they need a strong base behind them.

while harvard's institutional strength is seeded first and foremost in the university's immense wealth, it also is  based on the belief that living alums will guarantee the current and future credit of the institution as an independent actor.

it is based on the idea that this generation of graduates will not let an institution that has been in existence since 1636 disappear on our watch, which means access to cheaper capital, and a sense of support that allows them to maintain independent in their actions without checking over their shoulders.

in donating to harvard, i am helping the university raise the funding it needs to function independent of interference at highly preferential interest rates.  my few hundred dollars, aggregated with donations from thousands of other alums, in a very small way signals an institutional commitment.  that commitment translates to less expensive capital on the open market for the university, and the university's ability to continue to act independently and in line with its true nature.  i am donating to a cause in which i believe, and doing it in highly beneficially leveraged way.

it is a mistake to sell out the future for the present and to respond to immediate  disaster by sacrificing the grander picture.  -- and signaling to the broader world that harvard has deep deep leverage hasan enormous multiplier effect.

regardless of alum support, harvard will have to tighten the belt for the next few years.  that is probably a good thing to throw in the mix now and again.  perhaps some scaling back on the carnival cookies is in order - but i think that it is key that the university stays a very strong independent actor, with access to very cheap capital, firmly supported by an extra layer of security to rest upon in the form of their alums.

the last thing we want is for our universities to need a bailout and wind up with government or or private sector actors sitting on their boards, or even need to consider that a long term possibility.  so,sometimes scale matters, and sometimes leverage on leverage on leverage- really does provide leverage.

original swl blogposts and letters 2007-2010