Argh! Tax Exempt Status For 9 Massachusetts Colleges With Billion Dollar Endowments

The dirty small secret is out: personal foundations, which obtain a tax exemption, are needed to invest five% of their endowment yearly, but 9 Massachusetts schools with endowments that exceed 1 BILLION bucks encounter no this kind of requirement. They're: Amherst, BC, BU, Harvard, MIT, Smith, Tufts, Wellesley, and Williams.

With these massive fortunes just sitting there earning huge quantities of interest day-to-day, these are schools which, on a student's appeal for a lot more monetary help, will respond by saying that there are "not sufficient dollars offered." When it comes to discussing finances, these schools have no credibility as their public remarks boggle the thoughts.

Here's an instance:

Boston College justified escalating its tuition final year on the basis that their employee wellness care fees and power charges had been increasing. To add insult to the injury of rising tuition fees, a BC official was quoted in a Boston Globe short article: "Excellence is an high priced proposition." Not to be outdone in the elitism division, when the president of BC, Rev. William Leahy, was asked about the College's BILLION dollar endowment, and if it would indicate increasing tuitions would cease at BC, his response was: "A billion bucks is a good offer of dollars, but it by no signifies eliminates all the strain."

Stress? The Boston Globe reported that BC was ready to outbid for a get of true estate close to its campus for practically a hundred million bucks "with dollars up front." That is how BC defines stress - obtaining to bid with one hundred million bucks in revenue up front. I am likely naive for suggesting this, but possibly their tax exemption is assisting to relieve some of that stress. Do you imagine?

Derek Bok, former president of Harvard, mentioned in a latest book: "Universities share one particular characteristic with compulsive gamblers and exiled royalty: there is hardly ever ample revenue to satisfy their desires."

Members of the Massachusetts legislature are now thinking of getting rid of the tax exemption. They are wanting to impose a paltry two.five% tax, half of what personal foundations are essential to shell out. But my guess is that these schools are not worried. They will not even bother sending their lobbyists to protest the proposed tax. If it comes about, the schools will do what you can previously predict: raise tutions and expenses.

With terrific intentions mixed with plenty of pandering, Massachusetts politicians will in all probability enact this tax and dad and mom who send their little ones to these colleges will shell out alot more.

Now you know why this kind of schools as these do not care what you consider about what they charge. As prolonged as the demand to receive into these colleges far exceeds the provide of seats, schools will carry on to corner the marketplace on arrogance, or, biting the hands that feed them.

AfterThought: Harvard is trying to be the exception: college students whose moms and dads make much less than $60,000 a year acquire totally free tuition. But how numerous exceptionally vibrant college students who meet Harvard's needs come from houses earning significantly less than $60,000 a year? Not surprisingly Harvard does not say. Could it be that Harvard's personal press releases want us all to believe that it does not want any kid left behind? My cynicism should be displaying....