When my husband returned last week from a business trip on the East Coast, he brought home a copy of the Boston Globe that contained a story about layoffs at Harvard.
Harvard is cutting loose 275 people and this comes on top of other recent cuts, including the postponement of an ambitious and very expensive campus expansion.
If Harvard’s in trouble doesn’t that mean that times are far more precarious for colleges that aren’t circling in its orbit? Not necessarily.
You see Harvard, which is undoubtedly the richest university on the planet, relies heavily on its endowment to pay to keep the lights on. The endowment, which at its height was about $38 billion, kept Harvard fat and happy for years. In fact, some alumni grumbled that Harvard was being piggish for demanding ever more money from its alumni, who could be spreading their wealth to more deserving causes.
But thanks to the financial markets implosion and dubious money management practices, Harvard has lost about one out of every three of its endowment dollars.
In contrast, most colleges in this country have never gotten to live as large as Harvard and a few of its elite peers. They just don’t possess mega-bucks endowments. Consequently, most private colleges have always had to depend heavily on tuition to pay their yearly expenses, which means they have to be more disciplined to live within their means.
Ironically, you’ll find many schools with far more modest financial resources that aren’t suffering as much as Harvard. At least not yet.