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Comment by RGamma | Hacker News Reader

Isn't Harvard ultra-wealthy? Surely they can continue research for decades without external funding.

They only spend a small percentage of the endowment so they don't eat into the "principal." So, technically yes, but practically no.

As large as it is, income from the endowment covers about a third of the total operating costs of the university. There are contractual limits on what different funds can be spent on, though you can bet that as we speak, accountants at Harvard are going through ledgers to see what funds can be shifted around. You can bet that calls and letters are going out to donors and alumni. In fact, this is incentive to make the endowment bigger, so that it can cover more.

Unfortunately a lot of the endowment is probably donated by people who are no longer alive.

And even if they have a trust that’s allowed to make decisions for them, the trusts are unlikely to change the principal’s choices.

And if you divert income from one fund, or liquidate it to raise cash, that comes out of someone's budget one way or another--as the saying goes, you are robbing Peter to pay Paul. And in the long run, it leaves them with less. The feds are trying to force them to choose to cut programs they don't like--they've been explicit about that in the demand letter.

Also, regarding endowments: They can, and often do, come with strings attached.

I wouldn’t be surprised if much of the endowment is not legally available to them.

At least when I was heavily involved in the finances of a school with a much smaller endowment, less than 5% of it was general funds. The rest had tremendous restrictions on how it could be used.

>Projects that were stopped after Harvard rejected the government’s demands include a $60 million contract supporting an international study of tuberculosis, a $15.2 million project to develop treatments for long-term radiation exposure like the kind cancer patients experience in radiation therapy, a $3.2 million study on the effects of microgravity and radiation in space on human cells, and a $700,100 project to detect ALS early.

https://archive.today/latest/www.wsj.com/us-news/education/h...

Whether you mean to or not, you are parroting one of Trump's talking points. He wants people to think universities are full of rich liberals sponging off taxpayers to do silly science experiments. The reality is different. Endowments aren't just a slush fund you can spend on anything you want.

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