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Universities with money should give some money to universities without money

Universities with money should give some money to universities without money

The following propositions are true:

1. Universities claim to want to generate upward social mobility, mainly by educating poor, working class, and middle class people and making them upper class and rich.

2. Elite universities fail at doing (1).

3. Non-elite public universities are quite good at doing (1).

4. Elite universities have a lot of money. (Source)

endowments

5. Non-elite public universities don’t have a lot of money, mainly because Americans don’t want to pay taxes for higher education anymore.

less support

These propositions ineluctably lead to the conclusion that if rich universities genuinely care about educating poor and middle class people, they should stop trying to do it themselves. Instead, they should “outsource” it to the places that, for a variety of reasons, are significantly better at catering to people who aren’t already rich. They can do their part, in true Econ-101-comparative-advantage-style, by providing what they have a lot of: $$$.

Consider that the largest single gift to Harvard is roughly six times the entire endowment of George Mason, where I work. Imagine if, as a demonstration of their commitment to social mobility, every rich school decided to donate 1% of its endowment to, let’s say, ten public universities in the states in which they reside. Don’t you think Montclair State (20,000 students, endowment of $55 million) would appreciate help from Princeton (8,000 students, endowment of $22 billion) in educating New Jersey’s workforce and citizenry? It’s not as if Montclair State and Princeton are competing for the same students; this is not Coke helping Pepsi out. So why not?

One issue is that elite universities are collectively lying when when they say they are interested in upward social mobility. Another is that hedge funds — which is what elite universities are, at least as financial entities — aren’t in the habit of helping others. A third is that even if universities could somehow be convinced of the benefit of aiding other universities, it would be immensely difficult to carry out in practice. Of these, I believe the first reason is the most important: rich schools may talk an excellent game, but revealed preferences are revealing, and it’s not clear that they actually care about educating poor and middle class people.

About Ahsan Butt

Assistant Professor, Schar School of Policy and Government, George Mason University

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