Hard Times at Harvard

Nina Munk in Vanity Fair has an article about Hard Times at Harvard. Yet again it uses that word, profligate.

"Once upon a time—that is, the fiscal year ending June 30, 2008—Harvard’s endowment stood at $36.9 billion, way, way up from $4.8 billion in 1990. No other university endowment in the world comes close to matching Harvard’s. Yale’s endowment, the second-largest in the nation—$22.9 billion for fiscal 2008—is nearly 40 percent smaller than Harvard’s. Stanford’s is less than half the size: $17.2 billion, as of last year...Harvard’s endowment had lost $8 billion, or 22 percent, in the first four months of the fiscal year, from July through October 2008. To put that number in context: $8 billion is greater than Columbia University’s entire endowment ($7.1 billion as of fiscal 2008)."

It goes on to talk about how the Harvard Management Company, which oversaw the endowment, was run and how it interacted with the administration, including Larry Summers. There's one passage that struck me as odd...

"Incensed, one member of the board of Harvard Management Company, the fund that manages Harvard’s endowment, told me, ‘This story is about leadership. It isn’t about money.’ He may be right. At some point in the last five years, the men and women who run Harvard convinced themselves that the endowment would grow at double-digit rates forever. If Harvard were a publicly traded company, those people would have been fired by now."

I'm not so sure that's how publicly traded companies seem to work.