Tax Exempt Status For 9 MA Colleges With Billion Dollar Endowments

The dirty little secret is out: private foundations, which receive a tax exemption, are required to spend 5% of their endowment yearly, but 9 Massachusetts colleges with endowments that exceed one BILLION dollars face no such requirement. They are: Amherst, BC, BU, Harvard, MIT, Smith, Tufts, Wellesley, and Williams.

With these huge fortunes just sitting there earning vast amounts of interest daily, these are colleges which, on a student's appeal for more financial aid, will respond by saying that there are "not enough funds available." When it comes to discussing finances, these colleges have no credibility as their public remarks boggle the mind.

Here's an example:

Boston College justified raising its tuition last year on the basis that their employee health care costs and energy costs were rising. To add insult to the injury of increasing tuition costs, a BC official was quoted in a Boston Globe article: "Excellence is an expensive proposition." Not to be outdone in the elitism department, when the president of BC, Rev. William Leahy, was asked about the school's BILLION dollar endowment, and if it would mean rising tuitions would stop at BC, his response was: "A billion dollars is a great deal of money, but it by no means eliminates all the pressure."

Pressure? The Boston Globe reported that BC was able to outbid for a purchase of real estate near its campus for nearly 100 million dollars "with cash up front." That's how BC defines pressure - having to bid with 100 million dollars in cash up front. I'm probably naive for suggesting this, but maybe their tax exemption is helping to relieve some of that pressure. Do you think?

Derek Bok, former president of Harvard, said in a recent book: "Universities share one characteristic with compulsive gamblers and exiled royalty: there is never enough money to satisfy their desires."

Members of the Massachusetts legislature are now considering eliminating the tax exemption. They're looking to impose a paltry 2.5% tax, half of what private foundations are required to pay. But my guess is that these colleges are not worried. They won't even bother sending their lobbyists to protest the proposed tax. If it happens, the colleges will do what you can already predict: raise tutions and fees.

With good intentions mixed with lots of pandering, Massachusetts politicians will likely enact this tax and parents who send their kids to these schools will pay more.

Now you know why such colleges as these don't care what you think about what they charge. As long as the demand to get into these schools far exceeds the supply of seats, colleges will continue to corner the market on arrogance, or, biting the hands that feed them.


AfterThought: Harvard is attempting to be the exception: students whose parents make less than $60,000 a year get free tuition. But how many exceptionally bright students who meet Harvard's requirements come from homes earning less than $60,000 a year? Not surprisingly Harvard doesn't say. Could it be that Harvard's own press releases want us all to think that it doesn't want any child left behind? My cynicism must be showing....

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More Dishonesty From Colleges: Dropping The SAT Requirement

A college's ideal press release will suggest their compassion and understanding for the student, particularly for those who "don't test well."

Baloney. Pure. Extra Virgin.

It's part of the PC mentality that runs amok on colleges campuses everywhere. Two examples are illustrated in today's NY Times: Smith College & Wake Forest.

From Wake Forest University: “By making the SAT and ACT optional, we hope to broaden the applicant pool and increase access at Wake Forest for groups of students who are currently underrepresented (italics added) at selective universities,” Martha Allman, director of admissions at Wake Forest, told the Times.

Did you get the gobbledigook in this statement? "Underrepresented" what? Are they dummies whose test scores don't meet the school's "extraordinary" standards?

Here's the veiled truth in the Times article that gets missed: "Applicants to both schools will have the option to submit their test scores." Read: we colleges want to use these test scores as a tie-breaker with equally competiting students. Plus, if truth be told, we want to make our decisions easier, our jobs easier, not more difficult.

If colleges could be accused of trying to monopolize dishonesty, this is a validating example.

To demonstrate the success of such a press release, this one was issued 2 years ago by Holy Cross College (Worcester, MA), which asked this question: "Why would a student submit standardized test scores if they don't have to?" Their answer: "A student might decide that his or her test score gives a more competitive picture of academic achievements and potential."

Replace the word "student" with the word "college" in the above statement and you have Truth in Advertising. Like most elitist colleges, Holy Cross likes to engage in feel-good Oprah babble to make us all feel warm and fuzzy about what they represent, or more accurately, how they market their image. After all, these colleges are a business whose strategy is to design, package, market, and sell their image. They've attended expensive marketing seminars where they have learned that perception is reality, and reality is what they want parents and students to perceive, not actually what is.

So far roughly 70% of students who apply to colleges that require no standardized test scores submit their SAT and ACT scores anyway. Talk about being competitive.

If you were working in the admissions office, what would you be thinking of those applications that did NOT come with their SAT scores? "Hmmmm...does this student have something to hide?" How's that for reality?

Bottom Line: If these colleges were honest and forthright, they would require that their applicants not submit their standardized test scores. When the first college in the United States makes non-submittal of test scores a requirement in its application process, watch for this TV news headline: "Hell freezes over. Film at eleven."



The dishonesty of "non-SAT" colleges is astounding, proving once again that marketing their image trumps the truth we parents deserve.