Buy Me a Chair: The wacky world of university endowments
musgrave.substack.com
musgrave.substack.com
(The prize is to the most deserving student irrespective of academic status, across arts/architecture and computer science and from feedback has been a godsend to some cash strapped mature students at times. I'm happy)
Anthony Trollope based "the warden" around the consequences of a bequest in medaevil times carried into Victorian English Anglican church politics.
If the student(s) still value it, I think it's doing its job. Good on your grandparents!
Indeed, but it's a bit different. A will or trust is limited to some period - say 21 years after the latest beneficiary.
But there's a difference between a trust with very specific rules, and a general endowment. Doesn't seem to work out the same way. Also, there's a lot of variance in state law.
(Side note, did you know that SPY is a trust that will dissolve after certain people die? In the early days of ETFs they didn't... bother figuring out the right legal structure, so they just used a unit investment trust, tied to a dozen or so specific people. So maybe have an exit plan for SPY by like.. 2090-ish, I forget)
Linking to
> When Strings Are Attached, Quirky Gifts Can Limit Universities
Going on to say that Princeton is being forced to run lots of greek courses due to dead guy paying for it.
Well...duh...of course. Wasn't that the point of the donation? The donor obviously wanted to imagine Greek studies going on forever.
I presume after some period they could stop? Give the money away, or repurpose it.
For me this is an arguement against the whole concept of wealthy benefactors vs taxation. If you tax the money the government can spend it on the public good. If you let the rich guy keep it they will spend it on their own whims.
There is a natural tendency to diminish money as a measure of anything good, but money really is the yardstick by which we jointly measure all things, trading off time with kids, family, travel, leisure against other priorities, and being rewarded by the rest of society for our contributions to what they want to spend money on, their tradeoffs.
Turns out that there are a bunch of very skilled highly educated people who want to spend their time researching cancer (which cure they could sell for a lot of money), compared to those who are most capable of and interested in, financially restructuring companies.
That hedge fund guy's donation to CMU is tax-deductible; we do that because everybody loves a philanthropist giving. His tax bracket is let's say 50%, so, where he would have owed $50 million to the government on that $100 million income, by giving it to CMU, they get the full $100 million and the guy owes no tax; of course leaving it to the rest of the tax payers to cover that $50 million in the state and federal budgets... but that's a good deal because a private elite university got more money? (And if hedgie donated appreciated securities rather than income, the bracketed tax savings get amplified that much more...)
There are plenty of places where "the market" chooses the wrong winners (by some important measures) but most of the complaints about the market don't go in that direction. Talk about how important money is, instead of socially devaluing it, then it would be easier to focus people's attention on cartel and monopoly pricing, negative externalities, etc.
Even for HN this level of delusion is rare.
Paradise Papers leak reveals secrets of the world elite's hidden wealth https://amp.theguardian.com/news/2017/nov/05/paradise-papers...
Also anyone with a brokerage account can get one of those loans. It's not remotely exclusive to rich people.
The best part about America, and playing by the rules of America and avoiding sketchy offshore nonsense, is that you can trust the law will treat you fairly. That is the simple secret of success for America’s entire existence, along with a decentralized government that makes power diffuse and a paranoid streak that infuses the populace with distrust of authority.
Live quietly, don’t be a public figure, and you can enjoy your (b/m)illions without serious socialist threat.
I am sorry for jumping in the middle of the discussion (which you seemed to want to quit :-P) but this statement seems to weird to not check out.
After looking into it a bit it SEEMS like it's only true under a very certain reading:
- "The 1%" must refer to the 1% with the highest income, and not the 1% richest, since the actual super rich don't really (often) have registerd income at all. So it's not top 1% richest, but the top 1% of the wage receivers. How much does the richest actually tax? No clue.
- Even when it refers to the top % of wage slaves, it is still wrong for "taxes", but true for "federal income tax" only. According to [1] the top 1% made ca 21% of the money, and payed 24% of the total tax burden. So not the majority.
They still don't contribute the majority of the taxes though;-)
Despite all the heeing and hawing, rich people do pay a ton of taxes. It’s mainly the one percent of the one percent you hear about that can structure both their income and lifestyle in a way where they pay less than say someone making 50k in taxes as a percentage.
In what universe is a hedge fund manager making W2 wages?
The details are more complicated than that of course.
And on a big donation that the charity inevitably sells, the other shareholders pay the price when they get dumped on the market (but you still get the pre-sale valuation).
Aaaaand if you arrange to get family naming rights to the whole org, a building or faculty, the taxman still considers it a "no personal benefit" 100% eligible donation.
Normies donating employment income could only dream of that degree of escaped taxes. The tax benefits won't even cover the income taxes you paid at 6 figure incomes. Go to a dinner fundraiser and they're sure to exclude the dinner value from your charitable receipt.
Secondly, there are annual limits on the amount you can deduct, percentage wise. What the limit is exactly is circumstantially contingent, but you are not allowed (generally) to zero out your income even if you donate 100% of it.
That being said, I agree that donating to universities is one of the dumber forms of philanthropy.
non-profits accepting donations will allow you to structure them as is tax advantageous to you, say $10 million a year for 10 years, is announced as a $100 million donation.
but with appreciated assets something trickier happens. Say I paid $10 million for a block of stock, and it appreciates to $110 million. If I sell it, $100 million of that is income, but I donate the income so I don't have to pay tax on it... However, if I don't sell the stock, and just donate $100 million of it as stock, my charitable contribution is $100 million, and there is no tax on the $91 million portion which is income (did I do that arithmetic right?) and therefore I can deduct the $100 million donation from an additional $100 million of income completely unrelated to this block of stock. The US treasury and public will never see any tax for all that income, and will give me a break on the rest of my taxes.
My goal/interest here is simply to be transparent about how it works; how it works could be a good thing, I don't know. The wealthy donors are giving lots of money; the question is, is it ok for wealthy elites to give a chunk of money, let's call it 50%, and influence where the money goes in a way that's similar to and impacts govt budgets that are set politically? There are plenty of rich people on both the left and the right; but elitism is a separate issue.
> The public likes the idea of philanthropy
I think that may be because very rich donors can afford good PR. Also there are few politicians strong enough to say, "sure x spent 100m on postgrad study of his niche interest, but if the treasury had got it instead it could have spent it on teaching everyone's kids to read and write".
I think a (real) cap on tax deductability would have a interesting consequence. a) the government has more money and better public services. It no longer has to cosy up to a 'philanthropist', helping them look good b) real philanthropists would still donate. However people pursuing dubious interest, like funding niche courses for elite kids at an elite school, would wane. Public stops looking at philanthropy in same way, perhaps
You and I both know that all that money would have gone to defense contactors and hospital administrators if the government had taxed it.
On average, nonprofits provide substantially more public good per dollar than the government does.
There are annual “limits”. No sensible mathematician, programmer, economist, or other non-politician would look at the actual formula and think it was a limit.
Count me out. I have a really unpopular opinion that philanthropy is nothing more nothing less than entertainment for the giver. There is no difference between me buing a movie ticket or giving money to a charity. (Well, other than in the movie case I create jobs, in the charity I foster helplessness)
If society thinks there are some things where money should be allocated without getting anything tangible back, it should be funded via taxes, not charity. No need to subsidize private charities.
(If your government can't be trusted to manage the money, it would be more efficient to use your money to try to fix the government instead of getting yourswlf some feelgood by giving money out to whatever else)
Effective altruism? Go and pay your taxes, that is according to economic theory the most efficient way to be altruistic in all the cases someone may bee freeloading on your charity (see tragedy of commons/prisoners' dilemma)
"Philanthropy" is largely rich people giving your tax dollars to a cause they like
It’s just not a good measure though. When I contribute to opensource, is my contribution worthless because nobody pays for it? If a company lowers the price for insulin, is that an indication that they are providing less value in the world?
I hear what you’re saying. Money moves the world. But there are an awful lot of things that humans value that don’t show up on a balance sheet. We become blind to all of that when we focus too much on monetary rewards.
How surprising that Carnegie[1] Mellon[2] University would honor a businessman and financier who donated a small fortune to the school!
[1] https://en.wikipedia.org/wiki/Andrew_Carnegie [2] https://en.wikipedia.org/wiki/Andrew_Mellon
Looks to me unless I already have that kind of money, there is no way I can get admission there. Oh well. That's capitalism for you I guess
Not a professorship -- an actual chair, that you can sit in.
They'd heard that joke before, unfortunately. I think they're missing a financial opportunity here :)
They could have taken your money, and written your name on the underside of the chair with a Sharpie pen.
They didn't sell them all, particularly at the back of the class.
One of our classmates and their year was scratched in while they took a nap... I should check if it's still there.
Ask HN: How to convince my parents to buy me a good chair? - https://news.ycombinator.com/item?id=585571 - April 2009 (7 comments)
(I'm joking)
Liberal arts FTW.
It works okay.
Meanwhile, the entire college ecosystem is disgusting. I went to a top private university and will never give them a penny, for the way they treated both students and non-professor faculty.
The Reverend Henry Lucas (c. 1610 – July 1663) was an English clergyman and politician who sat in the House of Commons from 1640 to 1648.
Since its establishment, the professorship has been held by, among others, Isaac Newton, Charles Babbage, George Stokes, Joseph Larmor, Paul Dirac, and Stephen Hawking.