There is little doubt that America’s top research universities have played a significant role in the country’s development. Americans are talented and hard-working, and the continuing flow of immigrants has added to this pool. The country has been blessed with abundant natural resources, and two oceans have long protected the land from invasion. However, its universities are arguably the crucial difference with other countries, especially in all areas of science and engineering.
Universities have been the catalyst for flourishing major U.S. cities with their sky-high real estate prices and vibrant global companies. Universities have acted as magnets for exceptional foreign talent with scientific, medical, and cultural contributions.
No matter which global ranking one looks at, America’s universities shine, even in lists composed by foreign entities. Besides the direct government support that universities receive through research grants and contracts, they benefit as tax-exempt institutions, paying no federal taxes on income and no state or local taxes on their vast real estate holdings.
The justification for these concessions is readily apparent, but are universities deserving of their tax-exempt status? What should the public expect in return? And should they be monitored in a number of areas?
The U.S. has been taken aback by the scandal surrounding admission. Parents bribed university officials to gain admission for their children. Over 50 parents were caught up in the scandal. America and the world were shocked.
While these cases show overt bribery, admissions to most, if not all, universities have rarely been purely on merit and squeaky clean. Affluent parents have long donated money to university endowments to gain admission for their offspring. There are many reported instances of this. No matter how you dress it, this is bribery pure and simple.
Here's another thing considered in admissions decisions that we don't talk about often: children of college/university faculty and staff. Should that status be considered in admissions decisions especially when tuition assistance is a benefit? #emchat #admissionsscandal https://t.co/xETKF95jPu
— Jeff Selingo (@jselingo) March 25, 2019
University faculty gain favorable admission for their children, families, and friends because of their outsized influence. Parents have long done all that they could for favorable admission because graduation from a world-class university may be generally the most important factor for successful careers. Benefits go beyond the education and include the university’s name and lifetime relationships with classmates who go on to be captains of industry and members of the political elite.
University admissions should create a more level playing field instead of making the playing field more uneven. What may be more shocking is that transgressions surrounding admissions may be the tip of the iceberg of university wrongdoings.
Solution: Legislate that all interference with university admissions, besides letters of recommendation, is a crime.
Universities are prone to accepting money from no matter who and invariably advertise the donor’s name in naming a school or college, building, endowed professorial chair, program, or initiative after them. This may sound innocent, but is it?
A couple of such incidents with universities connected to my past show the problem. I was lucky enough to earn my undergraduate and graduate degrees from MIT, a school that I truly admired. Today I believe the school could have done much better when it comes to accepting donations.
The late billionaire industrialist David Koch received his education at MIT. Over the years, MIT has benefited from him and his companies. In return, MIT has advertised his name, most prominently on the Koch Center for Integrative Cancer Research. In addition to their vast wealth, exceeding $100 billion, the two Koch brothers were supporters of fossil fuels and deniers of global warming and climate change.
In 2017, I wrote to the president of MIT questioning the advertising of the Koch name, especially for a university whose success has been largely based on its scientific and engineering achievements. How can MIT, a scientific institution, justify advertising the name of two who trash scientific findings?
The MIT president’s return mail justified their naming based on that the Koch money helped humanity. My response was if the Kochs were so interested in humanity and science, they would not need to have their name on prominent display. I even wrote an opinion piece to drive home my point as this to me was a case of name laundering pure and simple. As to be expected, where there is smoke, there is fire. Recently, MIT’s venerable Media Lab’s association with Jeffrey Epstein and his financial support has exposed MIT to widespread criticism and resignation of its director from the faculty.
Name laundering is not merely an MIT problem; it is a universal issue for America’s top research universities. The Sackler family’s connection to the opioid crisis is another case in point. Tufts University, where I started teaching as an Assistant Professor, benefited from the financial support of the Sacklers and had their name atop one of the university’s medical school buildings. Last month, Tufts removed Sackler’s name under pressure.
Universities need more funding than provided by tuition alone, but why not accept money and acknowledge the donation on annual reports along with those of smaller donors? Get out of the name laundering business.
Solution: Desist from naming after a financial supporter and remove all existing names.
Universities invariably receive significant financial support in the form of a general endowment, as well as restricted funds such as for specific endowed chairs and programs.
A financial supporter donates money to a university; the university invests these funds; uses a percentage of the annual income to benefit the holder of the chair (travel, research assistance, and summer stipend) or the program; but must never use such segregated donations for unrelated activities. Thus, the invested money would normally grow over time as all the income may not be used in a given year, and the chair may not have a beneficiary for some years of the program.
Malfeasances associated with segregated gifts have been reported in the press. The issue may be further brought to light by my personal experience. The government of Iran endowed a chair, Aryamehr Professor, at the George Washington University (GW) with a gift of $1 million in 1974. This chair was the university’s largest chair endowed. The chair was empty from 1992 to 1998, adding further funds to the principal and accumulated unspent earning. I became its holder in 1998 until I retired in 2019.
Yet, most recently, in 2019, GW informed the government of Iran that the chair had expired long ago. GW claims this position after the passage of 45 years and after negotiating with the government of Iran to change the name of the chair from Aryamehr to Iran in 2003.
Solution: File yearly reports with the U.S. Department of Education on the status and management of all endowment funds.
Realizing that salaries are market-determined, are there reasons to raise eyebrows about salaries at universities? In the case of corporations, it is up to the Board of Directors and, ultimately, stockholders to determine the remunerations of all employees. So it should be with private universities while noting one crucial difference: most private universities are not-for-profit and are thus tax-exempt.
Is it fair to enjoy tax-exempt status and payout of line benefits to senior administrators if the reason for their existence is education and research to benefit the greater good? Is it out of line to pay university football coaches salaries that approach $5 million while they also benefit from endorsements and other activities? Or paying university presidents salaries that exceed $1 million and, in some cases, approach $5 million?
Are these institutions using their tax-exemption to help students and reduce their students’ loan burden or to lavish greater personal benefits on senior administrators?
Solution: Guidelines for all not-for-profit institutions in setting salaries and benefits for administrators and coaches.
There is a widespread feeling that universities should serve the greater good by instilling ethical behavior in students who pass through their halls. Yes, students attend most classes BUT have limited personal contact with a few faculty, get a degree, a job, or go on to graduate school.
In recent years, some professional schools have established a course or two on professional/business ethics, but this is just a veneer. Ethics has to be embedded in every course and classroom, in the lives of the faculty and administrators, and importantly, in the behavior of the institution in everything that it does – admissions, funding, naming of facilities and programs, managing of the entrusted endowments, salary and benefit structure, behavior of its faculty and administrators, and in achieving its overall mission to educate students. If not, students see through pretensions and corrupt practices.
Solution: Along with the existing accreditation of universities, a systematic assessment of their ethical behavior and success in encouraging their students to serve the greater good.
Yes, there is no doubt that America’s premier research institutions have been at the foundation of the country’s historical economic and cultural success, both at home and abroad. But this success, which has been earned over decades, could be easily squandered if blemishes are not addressed before they permeate their entire fabric.
For universities to retain their tax-exempt status, there is a need for broad, yet unobtrusive, oversight. It’s time for the U.S. Department of Education to look into these issues and establish guidelines and codes of conduct, along with their monitoring.
DISCLAIMER! The views and opinions expressed here are those of the author and do not necessarily reflect the editorial position of The College Post.