Federal lawmakers question whether billion-dollar endowments violate colleges’ missions
Earlier this week, Harvard president Drew Faust was one of many college officials to receive a four-page letter from federal lawmakers asking for information about the school’s multi-billion-dollar endowment.
More specifically, the authors requested that Faust, and administrators from 55 other private institutions, answer 13 questions so the lawmakers can determine whether the excessive wealth fits with the colleges’ “charitable and educational’’ missions, which allow them to receive tax breaks.
The letters were sent to private institutions that had more than $1 billion in their endowments at the close of the 2014 fiscal year. This included nine colleges in Massachusetts, and another five throughout New England.
Harvard’s endowment topped the list, and was valued at $36.4 billion in 2014. Jeff Neal, a spokesman for the university, said the school looks forward to working with the committees, and will provide clarity on the strong financial management practices governing the endowment and the positive impact it has had.
MIT had the fifth richest endowment at $13.4 billion. Boston College, as well as Smith and Wellesley colleges, also made the list.
“Despite these large and growing endowments, many colleges and universities have raised tuition far in excess of inflation,’’ Senator Orrin Hatch, chairman of the Senate Finance Committee, wrote in the letter. The letter was also signed by two leaders of the House Ways and Means Committee.
The colleges have until April 1 to respond to the inquiry.
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