Two fund managers are personally receiving about $34 million and $35 million. How much is $35 million?
That number is 20 times the money earned by top football and basketball coaches, the next best-paid university employees in America.
It is 80 times what University President Lawrence H. Summers earns, 200 to 400 times what many tenured members of the Harvard faculty make, and 1000 to 2000 times what many of Harvard’s clerical and service employees earn.
Thirty-five million dollars is three percent of the entire Harvard operating budget for the current fiscal year, and the entire 5.5 percent tuition increase paid by all full tuition-paying students at Harvard College.
These six people are good at what they do. So are many other employees of Harvard, from deans to adjunct professors to medical staffs to police to cafeteria workers. The fund managers’ work is unique in that they deal with large amounts of money. So do employees in the office of Harvard’s vice president for finance, and they don’t get a slice of the sums that pass across their computer screens.
Let’s not forget: That money isn’t theirs. It’s the accumulation of gifts made by many generations, dating back centuries. The purpose of the endowment should be to serve current and future generations of students, not current and future generations of fund managers.
These six people received these sums based on formulas tied to “benchmarks,” which they can exceed even when the endowment loses value. This happened over the two years prior to June 2002, during which several fund managers were paid over $5 million apiece, and one as much as $17 million.
If Harvard is flush enough with endowment money to pay six people $107.5 million, Harvard can surely find the money to do things like freeze tuition for all college students, replace all undergraduate student loans with grants and fund a program of loan forgiveness for recent graduates in low-paying professions.
Plus, as long as Harvard persists in vastly overpaying this handful of employees, any staff layoffs, service cutbacks and (especially) tuition increases can and should be directly linked to that one enormous expenditure.
Last November, seven alumni from the Class of 1969 (including myself) wrote Summers to object to these fund manager payments. This is our 35th reunion year, and Harvard is asking us for gifts totaling roughly half of what is going into one fund manager’s pocket. A number of others in our class have similarly expressed themselves.
Come graduation week, I expect this fund manager pay issue—along with other questions about the endowment and the money culture—will be front and center among the entire community of alumni.
We have called for a public airing of this issue, but our request has been ignored. Instead, the University delayed its announcement by two months, and then announced its intention to pay the fund manager bonuses, with a terse statement from the treasurer asserting that it’s in Harvard’s best interests to do so. He offered a review of the pay procedures, but made no promises to stop the current practice.
It’s time for students (and others) to take up this cause—or, at a minimum, to hear out various points of view and then take a stand and make your voices heard. Changing minds won’t be easy, but it’s possible. There’s a lot at stake here. The example we set here is tremendously important—and not just for higher education.
Harvard is a great and powerful university, and we all want it to use that greatness and power to promote and serve the highest ideals of our society, culture and nation.
You have dreams, just as we did at your age. You deserve just as much chance to nurture and follow those dreams, without the money culture getting in your way.
William A. Strauss ’69 is co-founder and director of the Capitol Steps, playwright of three musicals and co-author of nine books, including Generations and Millennials Rising.