Alma Mater Blogging...

Greg Mankiw's desire to move Harvard to someplace better adapted to human life than Massachusetts was triggered by:

Greg Mankiw's Blog: Time for Harvard to Move?: The Wall Street Journal reports one of the most pernicious ideas I have heard of late: "Massachusetts legislators, demonstrating a growing resentment against the wealth of elite universities in tight economic times, are studying a plan to levy a 2.5% annual tax on the portion of college endowments that exceed $1 billion. The effort takes aim at one of the primary economic engines of the state, which is home to nine universities with endowments that surpass the $1 billion level, led by Harvard University's $35 billion cache, the nation's largest.... Supporters said the proposal would raise $1.4 billion a year. Based on the most recent size of Harvard's endowment, the university would have to shell out more than $840 million annually..."

There is an important underlying issue here with respect to America's private universities...

Let me put it this way: in 1960, the University of California--then overwhelmingly UCB and UCSF and UCLA--was about four times the size of Harvard, 5000 vs. 1200 undergraduates a year, with graduate students and faculty roughly in proportion. Clark Kerr, as president of the University of California in the 1960s, took a look at space constraints in Berkeley and Westwood, took a look at the rising population of California, took a look at increasing wealth, took a look at increasing educational attainment, took a look at the increasing attractiveness of American universities to people abroad, and conclude that the number of undergraduate students who could and would want to take full advantage of a UC education was going to grow eightfold over the next fifty years. So he decided to go all-out to clone UCB and UCLA.

And he did it.

Today we have UC Davis, UC Merced, UC Santa Barbara, UC Santa Cruz, UC Sunnydale, UC Irvine, UC Riverside, UC San Diego which together with UCB and UCLA graduate 40,000 undergraduates a year. Quality of education at UCB and UCLA has suffered a little bit as this cloning process has diverted resources away from us--but only by a very little bit. And the other UCs are damned good--with Davis and UCSD now being, I think, equal to the flagship campuses (although we don't admit it in bureaucratic system wars). And the Cal States do an impressive job as well. And the community colleges provide remarkable educational value for the money. The high administrators of the University of California starting with Clark Kerr have an extraordinary, remarkable accomplishment to look back upon. And they should be very proud--especially as they have accomplished it in the face of declining relative levels of support from the state legislature in Sacramento.

Harvard, over the same fifty-year time span... Harvard has gone from 1200 undergraduates a year to 1600, and has done so in spite of starting with a substantial endowment and receiving $15B of private charitable gifts. Harvard does a great many things well--and I am impressed by the fact that Larry Summers's presidency seems to have had the effect of creating a large brand-new science building on every block. But it is hard to think that the production function from resources to outcomes is an efficient one or something to be particularly proud of: I think presidents Pusey, Bok, Rudenstine, Summers, and Bok again were beaten by the system. At meetings of high academic administrators Berkeley Chancellor Robert Birgeneau and his ilk can hold their heads up high as proud successors to a highly capable group of administrators who made a lot of lemonade out of the lemons that they were handed, but I don't think Harvard president Faust can do the same.

Somebody last week--was it Jan de Vries? John Ellwood? Somebody else? I forget who, but it is not original to me--said that the right model for Harvard over the past century is Yugoslavia. Remember the story of the Yugoslavian socialist worker-managed firm? If you add another worker to the firm, that worker gets a pro-rata share of the firm's value added. The firm's value added has a component attributable to the firm's capital stock, a component attributable to the ideas embedded in the firm, a component attributable to the firm's market position, and a component attributable to the workers. Hire another worker, and only the last of these goes up: the first three do not, and so average compensation falls.

This means that a worker-managed firm is likely to shrink whenever it gets good news that makes it more productive--the larger is the value added due to ideas, capital, or market position, the more expensive does it become for the existing workers to replace workers who leave, let alone hire enough workers to expand. While a competitive market capitalist firm responds to good news about its productivity and value to society by increasing employment, a Yugoslavian-model market socialist firm responds to good news about its productivity and value to society by shrinking. On this analysis, the very success of Harvard over the past two generations together with its degree of worker management has created enormous internal pressures not to expand, the better to share out the surplus among the existing stakeholders.

If this story of Harvard-over-the-past-two-generations-as-the-socialist-Yugoslavia is correct, then a bunch of hard questions to which I do not know the answers are raised about:

• The judgment of those who have tried to satisfy their charitable impulses by giving $15B to my alma mater over the past two generations.
• The proper incentives that the government should try to present to the institution--and to those who might try to satisfy their charitable impulses in the future by adding to its endowment.
• The responsibility of alumni like myself to try to influence the future governance of the institution: corporation members like Bob Reischauer know what is going on at least as well as I do, but seem to have been unable to move the institution.
• The question of how Harvard should expand if indeed it should expand: it doesn't seem to be nearly as good as the small liberal arts colleges or even its rivals Yale and Princeton at undergraduate education (I did very well, but only because I quickly found two places--Social Studies in Hilles basement, and the graduate economics program--where Harvard was, effectively, a small college); the medical school and the biomedical complex that surrounds it appears to do very well indeed as research institutions; the public policy school seems to have been an experiment worth trying that did not fulfill Derek Bok's hopes, but that I cannot fully evaluate; few of the many people I know who went to the law school say many good words about it; et cetera.

Comments

[MMGood]

UC Sunnydale

You must admit that this one is a knock on the UC system--since so many students died. Darn vampires!

[Bloix]

Harvard is an investment bank with a mom-and-pop non-profit enterprise attached to it for tax purposes. Of course it should be taxed. And what happened when the tax idea first came out? The admin couldn't move fast enough to cut tuition, so as to garner some sympathy for its tax exempt status. Even the recent cuts are painless. Harvard could reduce tuition for every undergrad to zero - like Cooper Union - and its endowment would continue to grow.

[Alan]

Don't forget Pat Brown's role in all of this.

[a]

For years now, I've thought that the private universities in my state leached off the state budget in greater proportion than they contributed, or were oblivious to the condition of the state government and local economy. I've even thought that the private universities had a perverse incentive to see the local economy dive (deteriorate) because this sends people back to school and retraining - profit opportunity for a private operation (and for private universities in a state with significant public ed competition, a weakened state budget is a chance to maintain and edge over public institutions). You also might suspect that perhaps Harvard and other elites are somewhat collusive and anticompetitive. Perhaps the federal antitrust department should be expanded to cover private universities - more transparency (admissions, who is donating what, etc).

So some sort of incentive for Harvard and others to care about the local economy might be nice. Perhaps the tax on the endowment would kick in only when GDP in the state did not increase quarter-over-quarter and year-over-year. Or perhaps foundations and endowments should be required to spend more.

All this said, the savings rate in the U.S. may be higher than some think - there is a lot of money "saved" via donations to higher ed and research.

[Fifi]

In other words, what is Harvard doing of its money, collected under a highly privileged status and supposedly dedicated to the greater good?

Where are the results to justify the privileges?

The same question would apply at some extent to Stanford, btw. Lots of money and for what?

[Maynard Handley]

Brad, isn't this article a perfect example of how, if you start with incorrect premises, you land up in a morass of contradictions?

My understanding, based, for example, on all the current complaining about the cost of higher education, is that the primary value of a Harvard undergrad education is perceived by most of the people involved to be networking --- it's how you get to meet the future great and good, and thus substantially increase your chances of being hired by Bill Gates when he starts his new company, or by some future president.

If we accept this premise (and it does seem pretty plausible) then
(a) Harvard is not interested in more students because the goal of Harvard is positional. Five times as many students means fives times as much education, but it means one-fifth as much value attached to the Harvard networking brand and
(b) It seems rather less obvious why it is wrong for MA to tax Harvard. Personally I'd rather do the taxing more directly (tax the successful on their wealth and income, not the engine that got them there) but the US political system being what it is, that ain't gonna happen, so I'm not going to lose any sleep over this second-best option. Sure it's not ideal in that taxing Harvard is taxing a bundle of goods, some of which we want to encourage, but, as I say, the facts are the facts --- Harvard appears to exist primarily to hook up future movers and shakers, not to educate the world or even to perform leading edge research.

[Bloix]

Maynard Handley is exactly right on the reason that Harvard doesn't expand. The rationale for Harvard is not the education of young people. It is to produce a certain class of educated person who will go on to fill a certain role in society - primarily in government, banking, and law. You don't need too many of these people and so Harvard is not terribly interested in producing more of them.

But he's less persuasive when he says that the endowment shouldn't be taxed because one should "tax the successful on their wealth and income, not the engine that got them there." The astonishing thing about the endowment is that, once you get past the few billion, it is not part of the "engine" that is the university. It is an ever-growing mountain of money that serves no productive purpose at all. It pays enormous salaries to the people who manage it but it does not benefit the students or faculty in any tangible way.

[sd]

America's private colleges were originally built on the largess of religious groups. The Calvanists needed ministers and teachers, and by golly they were going to open up schools to produce them. Lots of people, many essentially uneducated and unwealthy, gave money to fund the establishment of colleges because they felt a religious obligation to do so. Under this model, there is no reason to spend money to make Harvard ever more gold plated. Once Harvard is up and running, the next order of business is to found new colleges in the Ohio River valley, in the Northwest Territory, etc.

But now private colleges have mostly abandoned their religious roots, and most of the private philanthropy supporting higher education comes from alumni. Under this model, there is every reason to make Harvard ever more gold plated. Alumni don't need more ministers and teachers, they need for their own degree to become more and more valuable in the marketplace. And that comes from giving more and more money to Harvard, not from founding new colleges in the Ohio River valley, in the Northwester Terriority, etc.

I don't think its a good idea to tax colleges (Lord knows what the undesirable unforeseen consequences would be), but it does feel odd to treat Harvard as legally the same as a neighborhood soup kitchen or a small college educating mostly the sons and daughters of the working class.

[Matthew Austern]

I agree that Brad is wrong to include UC Sunnydale in the list of today's UC campuses, but surely the University administration can't be blamed for what happened. It was destroyed in a perfectly normal seismic incident that had nothing to do with demons, and it was completely not evil.

[a]

some private school people strike me as a clubby and collusive, not necessarily movers and shakers. making donations and paying tuition is somewhat like joining a very expensive and exclusive country club.

[2010]

Yay social studies! How much math do I need before I can get attention in Ec though?

[save_the_rustbelt]

The weakest section of the Internal Revenue Code is the not-for-profit section, where a Cub Scout pack and Harvard are afforded much the same treatment.

The IRS, to its credit, is slowly tightening the grip on the NFP "industry," but it a tough game of whack-a-mole played against some very influential moles. Harvard educated moles.

And yes, what Maynard said.

[Sunnydays]

UC Sunnydale? Whaddya?!

[DaveL]

Seems like a very simplistic model of how Harvard (or worker-controlled factories) works. Harvard sells education and research to customers who want to be educated or to have research done because the faculty, staff and facilities are first-rate. The attractiveness of Harvard as a purveyor of these things is directly attributable to their faculty. Education and research and alumni gifts only happen because the faculty has historically been one of the best in the world. The same is true of any top-tier university, and to a lesser extent that was true of worker-controlled enterprises in Yugoslavia, even.

The argument you present is similar to "What use is a new-born baby?" A newly-hired faculty member is perhaps a drain on the resources of the school, but eventually they attract more education and research dollars which pay off the initial drain. The Harvards of the world are careful about who they hire because they want to make sure that drain is paid off.

[StJoe]

-The Harvards of the world are careful about who they hire because they want to make sure that drain is paid off.

With a $35B endowment, it seems the drain is more than paid off. I agree with Bloix, this is just a mountain of money whose size is not justified by legitimate social or educational purposes.

[John Emerson]

As I understand, Harvard is also bad in the way it abuses adjunct faculty.

[mpowell]

I don't think there is any particular reason for Harvard to expand. That's not what it's purpose is. But I am inclined to support a tax on it's endowment above $1B. Use the money to improve funding for public education in Mass.

[Robert Waldmann]

Harvard also abuses assistant and associate professors and, of course, graduate students and post doctoral fellows (that's true by definition) and it virtually ignores undergraduates. Harvard full professors are a very tiny very privileged club.

[roublen]

Maybe putting a Harvard of the South in Haiti would be a good test for whether elite universities are good for development? Semi-seriously, that would be truly awesome.

More jokingly, perhaps Mankiw could be Dean. To paraphrase Sir Humphrey on the Dean of Baillie College, "If he fails, at least he's tried. If he succeeds, he's a hero. And if he doesn't come back, he won't be missed."

[Peter H]

Is there any emperical evidence (as opposed to theoretical arguments) that worker-owned factories actually respond to good news by shrinking?

[a]

the public schools in city of Chicago could use some money from u of c and northwestern.

[E. A. Kline]

As an alumnus of Stanford, I sent a letter to the alumni magazine a couple of years ago proposing that the university -- now that it is sitting on an endowment of about 15 billion dollars -- could certainly afford to return to one of the fundamental principles of the institution put forth in the founding charter by Governor and Mrs. Stanford: that no tuition would be charged to the students, in order to make a first-rate education available to all, regardless of their financial means.

This foundation-stone of the university was abandoned "temporarily" during the financial hardships of World War I, when the school began charging tuition.

Tuition is now well over $40,000 -- close to, or higher than, the median income of an employee in California.

Unaccountably, the alumni magazine did not print my letter, though it took up very little space.

I wonder why?

[E. A. Kline]

As an alumnus of Stanford, I sent a letter to the alumni magazine a couple of years ago proposing that the university -- now that it is sitting on an endowment of about 15 billion dollars -- could certainly afford to return to one of the fundamental principles of the institution put forth in the founding charter by Governor and Mrs. Stanford: that no tuition would be charged to the students, in order to make a first-rate education available to all, regardless of their financial means.

This foundation-stone of the university was abandoned "temporarily" during the financial hardships of World War I, when the school began charging tuition.

Tuition is now well over $40,000 -- close to, or higher than, the median income of an employee in California.

Unaccountably, the alumni magazine did not print my letter, though it took up very little space.

I wonder why?

[Allison]

Birgeneau has made lemonade? I wish he'd done that at *this* big public university....

[CalDem]

You make the UC system look good by comparing it to Harvard, but there is a real problem in making the goal of all the UCs to be prestigious research schools just like UCB. a better goal for the 2nd tier UCs is to do an actual good job educating the smart but completely unprepared kids that come out of the Cal HS to places like Irvine, Riverside, etc.

[NA Patriot]

One thing that often gets lost here is the role that private institutions play in educating society. Harvard notwithstanding, private colleges educate thousands of folks with (virtually) no cost to the public coffers. And, as the data shows, they do so much more efficiently (measured by graduation rates - and the length of time it takes to graduate) and effectively, if you look at a number of metrics...alumni success, graduate admissions rates and the like.

The not-for-profit small private college is an enormously important contributor to American society. At the same time, I won't be making any donations to a place like Harvard. The small, undergraduate focussed liberal arts colleges deserve that support.

[a]

In response to Mankiw (see end of this post), I'd say his response is interesting: residents of a state do not need to apply to a private university in that state that has more than $x amt in the endowment, and where the endowment is taxed or regulated by the state govt. There are plenty of other private universities in other parts of the country. This may be more than a fair trade for taxing the endowment.

In the meanwhile, in exchange for a small filing fee or regulatory tax on the endowment, Harvard and others would be free to hire workers from public schools, use public transportation and the local airport, fill the sewers, utilize law enforcement to protect its important people, and otherwise enjoy the state infrastructure.

The tax on private school endowments could be a % of assets (eg, 1% per year), or it could be a flat fixed rate, or it could be an amount assessed on a per degree basis (based on number and type of degrees granted per year). The tax on a per degree basis is due for consideration: traditional owners of real property in a state may be overtaxed relative to the intangible property (degrees).

Greg Mankiw's blog:

Monday, May 12, 2008
The Empire Strikes Back
In response to the proposal in Massachusetts to tax Harvard's endowment by $840 million a year, one of my esteemed colleagues has an idea that he thinks would be better than my proposed move: Harvard can decide to no longer accept the children of Massachusetts residents.

Faculty children excepted, of course.

[jerry]

Greg Mankiw is a Whiny Ass Titty Baby. (*)

(*) WATB in the Duncan Black vernacular.

[garrettnelson]

As a current Harvard undergrad, I have to agree with the assessment of Harvard as primarily self-interested. I love the place to death, but to pretend like it's in any way exempt of the sort of private concerns on which we justify the taxation of businesses and individuals is utterly ridiculous. More here ... http://legion.matinic.us/2008/05/12/open-wide/

[Ken Houghton]

Once again, Brad DeLong viciously attacks Barack Obama. When will it stop??

I like the "declining tax, based on the amount of the endowment spent" (down to 0 at the 5% level) idea: if the money were truly being invested in Harvard (the entity), then the benefits would accrue accordingly.

If, otoh, they are not being using to support the school (and, of course, its environs)--and Widener, for instance, could use a few more staff, or at least retention of its current level--then why should they be allowed to trade on the good name of Cambridge, Massachusetts without cost?

[Onkel Bob]

Well they are expanding, but it's in Dubai.
The frau's university set up shop in Qatar and always asks her if she'll do a stint teaching there.

[Onkel Bob]

Well they are expanding, but it's in Dubai.
The frau's university set up shop in Qatar and always asks her if she'll do a stint teaching there.

[Richard Cownie]

Quite right. Give your money to Berklee College of Music instead - just
starting a $50M fundraising drive - peanuts next to Harvard's endowment,
but enough to make a big difference to a school that leads the world in
its field. And for all their massive endowment and fancy professors, how
many Grammys go to Harvard alums ?

And if they get enough money maybe eventually my wife will get her own desk
instead of a 3-way timeshare :-)

[Jim Lund]

Over the period 1976-2006, Harvard's endowment had a real growth rate of 6.7%, while US GDP growth in real dollars was half as large, 3.5%. Having some fun plotting exponential growth, in 2056 Harvard's endowment is projected to be $747 billion (2006 dollars), and exceeds 1% of US GDP.

In 2208, Harvard's endowment will pass the US GDP. Add in other universities with large endowments, and in time they are projected to dominate world investment dollars. This begins to look silly, so at what point are these large investment funds--carefully managed for growth and spending less than they earn--likely to stall out?

[ogmb]

"I wonder why?"

Presumably because too many applicants consider enrolling at an expensive university more prestigious than at one which can offer free education to the best and brightest.

[HBinBoston]

I can't see that anyone cited the recent NY Times op-ed, "Enjoy the Reunion, Skip the Check" but it is worth reading: Printer Friendly Format Sponsored By

May 25, 2008
Op-Ed Contributor
Enjoy the Reunion. Skip the Check.
By CARROLL BOGERT

College students are headed home for the summer, leaving campuses to the alumni for a few days of remember-when revelry. Welcome to the annual ritual that has university development officers across the country sharpening their utensils. May I pour you another cocktail, sir?

At Harvard, where I’m on my way for my 25th reunion, I’d have to be drunk to fall for their pitch. The university’s endowment stands at $35 billion and is likely to hit $100 billion in a decade. At an annual growth rate of 13.3 percent — the average since inception, and regularly exceeded in recent years — Harvard can cover next year’s entire undergraduate financial aid budget with what it earns in the market in eight and a half days.

Many colleges may genuinely still need alumni contributions to stay solvent, but Harvard isn’t one of them — nor are Yale, Princeton or several other super-rich universities.

If you ask Harvard’s president, Drew Gilpin Faust, why in the world she needs your $1,000 — as I did recently, at one of those pre-reunion cocktail parties in someone’s staggering Fifth Avenue duplex — she has a ready answer: alumni giving covers one-third of Harvard’s operating budget. What she doesn’t mention is that earnings from the endowment last year could cover the entire operating budget while still growing at a healthy rate.

About 15 years ago, according to Lynne Munson, a former deputy chairman of the National Endowment for the Humanities, university endowments changed their investment strategies from conservative to highly aggressive. “These universities have a modern mentality about investing,” she told me, “but they still have an old-fashioned mentality about spending.”

The result is that Harvard is sitting on top of a gargantuan pile of cash, and it’s getting bigger all the time. But for some reason, no one seems to be talking about a new financial model for running the university. The juggernaut that is the Harvard Development Office has grown no less ardent in its pleas for my contribution this reunion season.

Last year, in the wake of Congressional hearings on the rising costs of college education, Harvard announced that it would offer financial aid even to families earning up to $180,000 a year. That was good news for middle-class parents wondering where they would find $50,000 a year for the next four. But it should be only the beginning of a brainstorm about the bigger picture of financing a private education.

Harvard is the wealthiest private institution in America except for the Gates Foundation, which has about $37 billion. But unlike the Gates Foundation, Harvard isn’t legally required to spend 5 percent of its income every year. Last year, it didn’t. Nor does it pay tax. Nor is it bound by most of the strictures of financial reporting that make spending at Gates transparent and publicly accountable.

A few hundred alumni have formed Harvard Alumni for Social Action, to try to channel 25th-reunion giving to destitute universities in Africa. In three years, we’ve raised $425,000 — a lot for the University of Dar es Salaam but hardly a match for our annual class “gift.” And evidently not enough to win the respect of President Faust, who has begged off meeting the group. Harvard clearly doesn’t like any effort that might divert a dollar away from its Cambridge coffers.

So where are the rest of the alumni? Why do all those clever classmates of mine continue to invest their money in an institution with such a lack of imagination about how to deploy its resources?

The main reason is probably the unparalleled networking opportunity that alumni events represent. The more money you give, the more networking events you’re invited to, and the higher the net worth of the other attendees.

But fear is another big reason. All of us hope our children will be able to go to Harvard if they want to. We’re not sure if anybody up in Cambridge notices our paltry checks when David Rockefeller is writing one for $100 million, but an awful lot of people continue to write them anyway. It’s a small price to pay — a kind of soft blackmail — to keep options open for little Max and Sophie.

Maybe the biggest reason is tradition. This is the way universities have always been run, and we’ve come to expect those calls from classmates asking for our donations. The attendant chitchat is kind of fun. And would universities still go to the trouble of organizing reunions if they didn’t make a gigantic amount of money from them? We can all enjoy the get-together, even if the university’s message today seems wildly off-kilter: Open your wallets, graying nostalgics, it’s reunion season! And suspend the critical thinking we taught you here, way back when.

Carroll Bogert, the associate director of Human Rights Watch, is a member of the Harvard class of 1983.

[HBinBoston]

I can't see that anyone cited the recent NY Times op-ed, "Enjoy the Reunion, Skip the Check" but it is worth reading: Printer Friendly Format Sponsored By

May 25, 2008
Op-Ed Contributor
Enjoy the Reunion. Skip the Check.
By CARROLL BOGERT

College students are headed home for the summer, leaving campuses to the alumni for a few days of remember-when revelry. Welcome to the annual ritual that has university development officers across the country sharpening their utensils. May I pour you another cocktail, sir?

At Harvard, where I’m on my way for my 25th reunion, I’d have to be drunk to fall for their pitch. The university’s endowment stands at $35 billion and is likely to hit $100 billion in a decade. At an annual growth rate of 13.3 percent — the average since inception, and regularly exceeded in recent years — Harvard can cover next year’s entire undergraduate financial aid budget with what it earns in the market in eight and a half days.

Many colleges may genuinely still need alumni contributions to stay solvent, but Harvard isn’t one of them — nor are Yale, Princeton or several other super-rich universities.

If you ask Harvard’s president, Drew Gilpin Faust, why in the world she needs your $1,000 — as I did recently, at one of those pre-reunion cocktail parties in someone’s staggering Fifth Avenue duplex — she has a ready answer: alumni giving covers one-third of Harvard’s operating budget. What she doesn’t mention is that earnings from the endowment last year could cover the entire operating budget while still growing at a healthy rate.

About 15 years ago, according to Lynne Munson, a former deputy chairman of the National Endowment for the Humanities, university endowments changed their investment strategies from conservative to highly aggressive. “These universities have a modern mentality about investing,” she told me, “but they still have an old-fashioned mentality about spending.”

The result is that Harvard is sitting on top of a gargantuan pile of cash, and it’s getting bigger all the time. But for some reason, no one seems to be talking about a new financial model for running the university. The juggernaut that is the Harvard Development Office has grown no less ardent in its pleas for my contribution this reunion season.

Last year, in the wake of Congressional hearings on the rising costs of college education, Harvard announced that it would offer financial aid even to families earning up to $180,000 a year. That was good news for middle-class parents wondering where they would find $50,000 a year for the next four. But it should be only the beginning of a brainstorm about the bigger picture of financing a private education.

Harvard is the wealthiest private institution in America except for the Gates Foundation, which has about $37 billion. But unlike the Gates Foundation, Harvard isn’t legally required to spend 5 percent of its income every year. Last year, it didn’t. Nor does it pay tax. Nor is it bound by most of the strictures of financial reporting that make spending at Gates transparent and publicly accountable.

A few hundred alumni have formed Harvard Alumni for Social Action, to try to channel 25th-reunion giving to destitute universities in Africa. In three years, we’ve raised $425,000 — a lot for the University of Dar es Salaam but hardly a match for our annual class “gift.” And evidently not enough to win the respect of President Faust, who has begged off meeting the group. Harvard clearly doesn’t like any effort that might divert a dollar away from its Cambridge coffers.

So where are the rest of the alumni? Why do all those clever classmates of mine continue to invest their money in an institution with such a lack of imagination about how to deploy its resources?

The main reason is probably the unparalleled networking opportunity that alumni events represent. The more money you give, the more networking events you’re invited to, and the higher the net worth of the other attendees.

But fear is another big reason. All of us hope our children will be able to go to Harvard if they want to. We’re not sure if anybody up in Cambridge notices our paltry checks when David Rockefeller is writing one for $100 million, but an awful lot of people continue to write them anyway. It’s a small price to pay — a kind of soft blackmail — to keep options open for little Max and Sophie.

Maybe the biggest reason is tradition. This is the way universities have always been run, and we’ve come to expect those calls from classmates asking for our donations. The attendant chitchat is kind of fun. And would universities still go to the trouble of organizing reunions if they didn’t make a gigantic amount of money from them? We can all enjoy the get-together, even if the university’s message today seems wildly off-kilter: Open your wallets, graying nostalgics, it’s reunion season! And suspend the critical thinking we taught you here, way back when.

Carroll Bogert, the associate director of Human Rights Watch, is a member of the Harvard class of 1983.