Among the regular news about sports and an all-too-early election cycle and several more instances of police brutality, the story of hedge fund manager (a.k.a. wealthy, lucky break-catching, tangible job skill-lacking individual) John Paulson donating $400 million to Harvard might have gotten lost in the shuffle. Except for two things: 1) it made history (being the largest donation to Harvard, and maybe any other school, ever), and 2) Harvard doesn’t really need the cash.
Author Malcolm Gladwell didn’t miss a beat jumping on the donation as unnecessary and ego-serving, and he made the major points I would’ve made. Could that money have been better used somewhere else? Why not donate to two schools, or ten? Etc. (Another takedown of the ego donation courtesy of Slate as well.) Similarly, this Washington Post headline pokes fun at the situation a bit, then goes on to point out (as most articles do) the $36.4 BILLION (with a “b”) that Harvard is already sitting on.
Some fellow rich people came to the rescue, defending the donation (in the second link above), as you would expect. Gotta stick together and protect each other from the poverty-stricken rabble, right?
One thing I haven’t seen mentioned yet, though, is whether this donation, and many others like it, make Paulson and his fellow well-heeled alums enablers.
Enablers of what, you ask? Well, how about enabling one of the biggest problems with universities nationwide right now – the explosion of outlandish, nonsensical executive/administrative salaries/contracts/benefits.
There are many issues currently in academia, from the skyrocketing student loan debt to the buildings constructed for no reason or purpose other than to be shiny and to have someone’s name on them. But my focus here is on the obscenity inherent in leadership salaries at supposedly non-profit institutions of higher learning. And beyond the salaries, the absurd benefits, expense accounts, and golden-parachute severance packages given to even the worst examples of failed leadership.
Even the AAUP has issued a report titled “Losing Focus,” which, as you probably guessed, speaks to the short shrift many faculty are getting while board members, trustees, presidents, deans, and other administrative positions are granted more and more lucrative salaries.
The ridiculous growth of administrative positions and salaries has been noted time and again in reports that clearly show students’ money is being spent less and less on teachers and more and more on “attracting top talent” or whatever nonsensical phrase is being used to justify ridiculous pay packages, such as the $600K base salary recently bestowed upon the new University of Illinois president.
This is especially absurd when you begin to look at the discrepancy in average pay rates between administration and faculty – you know, the people to conduct the research and teach the classes and are generally the reason that students show up and pay tuition in the first place.
So, back to the point – are enormous donations like Paulson’s enabling the institutional irrationality of paying higher and higher salaries to glad-handers who only truly work to solicit further donations and financial support? Is Mr. Paulson guilty of encouraging Harvard to forget about faculty in order to pay more money to fundraisers and “development officers” and the like?
There are some simple solutions. Mr. Paulson could’ve put stipulations on his donation, requiring faculty in the college that will be named for him to receive regular, guaranteed raises as well as performance bonuses. He could’ve required that the money be spent in a certain amount of time in order to have the most impact on education seekers right now. He could’ve required that at least 25% of his donation be dedicated to scholarships for underprivileged students who want to pursue engineering and the sciences. He could’ve easily split the donation four ways and donated $100 million each to four different colleges within Harvard, or even four separate but equally grateful universities. The list of options go on and on.
But that does not appear to be the case.
The academy will eat itself at this rate, bending over backwards to demonstrate that it can be run “like a business” while failing miserably at it. After all, you can’t run a non-profit like a for-profit without finding/justifying ways to spend that money you “made” – and that’s where these obscene leadership salaries come into play. Never mind that you could award more scholarships, reduce tuition and room and board rates, improve on-campus infrastructure and transportation, etc., etc. That never even crosses the minds of the board members, probably because too many of them are coming at the task from the business model. Which is dead, dead wrong.