Harvard’s Endowment Gains are Not Something to Celebrate

The Harvard Management Company returned 33.6 percent on its investments in fiscal year 2021, increasing Harvard’s endowment to its unprecedented total of $53.2 billion. While many celebrated these "tremendous returns," such gloating about the endowment’s financial success is an insult to the University’s consistently underpaid employees and ignores the harms incurred by Harvard’s unethical investing. This ostentatious praise for the endowment’s growth (which was already larger than half the world’s economies) is not only in poor taste, but also morally wrong.

Despite this monumental financial gain of over $11 billion this past year, the University continues to lower its budget allocated for essential workers, citing "continued financial pressure" due to the pandemic. Before the semester began, Harvard’s proposed new dining schedules threatened to cut the number of full-time dining employees by 20 percent, limiting their access to employee benefits and increasing their financial strain after an already trying year.

At the same time, Harvard is in the midst of negotiations with the Harvard Graduate Students Union-United Automobile Workers whose proposals include a yearly increase in pay that is less than half the rate of inflation this past year, effectively lowering their real salaries. While University officials, like President Lawrence S. Bacow, have argued that “we have a legal and moral responsibility to maintain the purchasing power of that endowment so that it sustains future generations,” aren’t 33.6 percent gains a bit more than maintenance? Moreover, while much of the endowment is inaccessible, Harvard finished the past fiscal year with a budget surplus of over $283 million, showing that it has more than enough means to support its workers, whose reported wages and benefits decreased by $101 million over the same period. Meanwhile, last fiscal year, HMC’s top six officials together made over $31 million annually (this year’s financials have yet to be disclosed). Flaunting these exorbitant gains while simultaneously using austerity politics to limit worker compensation isn't impressive, it's embarrassing.

Furthermore, celebrating these financial gains is even more irresponsible when you consider the unethical sources of these returns. For example, Harvard’s endowment includes significantly more investments in exchange-traded funds, or ETFs, that profit off of the prison-industrial complex than University officials have previously admitted. Despite Harvard’s recent decision to divest from fossil fuels after nearly a decade of student activism, this past year’s gains still include “runoff mode” residual investments in unsustainable industries. Furthermore, as recently as 2018, Harvard’s endowment included $2 billion invested in the Baupost Group, a hedge fund that held bonds profiting from Puerto Rican debt until pressured to change its practices. And this is only the tip of the iceberg: Information on only two percent of Harvard’s investments is publicly available, meaning that the rest of the endowment is not publicly disclosed.

Harvard’s endowment investments also include illegitimate land purchases which are continuously mishandled, harming communities around the world. In Brazil’s Cerrado region, Harvard owns over $450 million worth of farmland found by the Brazilian government to be illegally taken from Indigenous communities. Harvard’s use of these illegitimately sequestered lands further contributes to the disenfranchisement of these peoples, as the HMC appears to harass local communities, contribute to deforestation, and heavily use pesticides and other chemicals which pollute local drinking water and have possibly lead to increased numbers of cancer patients. In Cuyama Valley, California, Harvard owns 7,500 acres of vineyards that sequester groundwater from drought-ridden nearby areas to increase profits at the expense of local communities, leading to grassroots organization against Harvard’s groundwater use.

Harvard’s immoral investment of endowment funds is nothing new. In the 1970s, Harvard held long-term bonds and certificates of deposit issued by banks which participated in direct loans to the South African apartheid government. Moreover, in the 1980s, at least $25 million of Harvard’s endowment portfolio was invested in tobacco stock, fueling an industry that today kills over 400,000 Americans annually. And, while University officials claim to have divested from these industries, public filings show that HMC actually still indirectly owns stock in tobacco companies.

So, instead of gloating about endowment gains, University officials should stop to reconsider where this money comes from, where it goes (or doesn’t go), and why they do not disclose this important information. As Harvard continues to invest its endowment in unethical holdings while simultaneously denying their workers’ sustainable wages, maybe growing the endowment isn’t something to be proud of. It’s something to be ashamed of.

Sophie H. Goldman ’23-24 is a Social Studies concentrator in Leverett House.

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