Hey, there! Log in / Register
Harvard Medical School needs money; to sell off part of a Longwood building
By adamg on Wed, 01/03/2018 - 12:44pm
The Crimson reports the medical school hopes to sell 8 of the 11 floors in a building it owns at 4 Blackfan Circle in the Longwood Medical Area. The money will help reduce the school's debt and, if enough comes in, let it stop drawing down its endowment to pay for operations.
Neighborhoods:
Ad:
Support Universal Hub
Help keep Universal Hub going. If you like what we're up to and want to help out, please consider a (completely non-deductible) contribution.
Comments
!?!?!?
How could anything affiliated with Harvard (estimated endowment $37.1 billion, http://www.thecrimson.com/article/2017/9/20/hmc-2017-results/) be desperate for money?
Because the endowment is not
Because the endowment is not a general-purpose bank account. There are very specific things they can't do with it.
Specific things they can't do with it..such as..
..things that would be logical to those of us who don't have $37Billion squirreled away in a separate account.
If someone donates money to
If someone donates money to be endow scholarships in the English department, it is quite logical that the money cannot be used for the operations of the medical school.
Harvard may have billions of dollars, but most of that was via directed donations by wealthy people. They typically put instructions for how multimillion dollar gifts are to be used, as is also logical. If I donate $10MM, I have ideas for what should be done with the money.
Selling assets to pay off
Selling assets to pay off debt to fix the operational budget so they don't have to dip into endowment?
This is bound to become a case study at the business school.
Each Harvard school has its own endowment
Harvard has this peculiar philosophy called "each boat in its own tub", which means that the schools are essentially separate entities. This is dysfunctional in many ways (witness the resistance several years ago when academic calendars were made less asynchronous across schools). So, for example, while there's a university HR office, each school also has its own.
One of the effects is that schools that don't make people rich (like the Ed and Divinity schools) have low endowments, even though they are part of the wealthiest university in the universe. Another is that when the financial crisis hit, schools were affected based on how endowment-dependent they were - so a school like HSPH (not yet the Harvard TH Chan School of Public Health), which had a relatively low endowment but mostly depended on research money, was less affected than some of the richer schools.
Doctors being the "poor" graduates of Harvard
They're just the working stiffs from Harvard, much like Harvard looks down at MIT as a "trade school". Even poorer than the doctors are the doctorates doing research.
you missed my point
I didn't say the med school has a small endowment; my guess is that it's in the top third of Harvard's schools, but probably behind Law, Business, and the College (but that's just my guess). Clearly they over-stretched themselves.
The point I was making was that they don't have access to the entire Harvard mega-endowment, so if they dig themselves into a hole by unwise action they have to dig themselves out again. And if they depend on endowment income (interest, dividends, etc.) for operating expenses then they don't want to dig into the principle if they can avoid it. If they can sell an asset but still retain use of it, that meets their needs in a more prudent way.
It's actually "every tub on
It's actually "every tub on its own bottom," often just said as "ETOB" (at least that was what I heard when I was there), but you have the concept-- and its associated effects-- spot on.
Thanks for the correction
Since the philosophy has never made sense to me, I guess I didn't bother to memorize the saying correctly. Either way, stupid and detrimental financially and administratively. You should have heard the howls when they tried to get the libraries to talk to each other!