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Friday, June 04, 2004
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Non-Profit Compensation at Harvard:
Obscene and Not Heard Obscene, obscene, obscene. It's one of those words that always crop up when people attempt to convey the unconveyable disgust they feel at spectacles of surpassing human depravity. "The present commercialisation of the art world, at its top end, is a cultural obscenity," writes Robert Hughes in The Guardian. "When you have the super-rich paying $104m for an immature Rose Period Picasso - close to the GNP of some Caribbean or African states - something is very rotten. Such gestures do no honour to art: they debase it by making the desire for it pathological." Most of us do, I think, sense something pathological underlying, say, Richard Grasso or Peter Diamandopoulos's behavior with regard to money (see UD, 5/25/04), and it's always sickening and fascinating - i.e., obscene - to watch them say what they say and do what they do when they are cornered about it. Those men head - headed - non-profit organizations, and so their obscene greed is arguably more scandalous than the greed of random art consumers. It does enormous damage, not merely to other actual human beings, but to the nature -- even the survival --of institutions intended to benefit other human beings in non-material ways: to secure the integrity of their market transactions, to enlighten them intellectually and morally. Perhaps that is why the word "obscene" has now been attached to another non-profit, Harvard University, by some of its most illustrious alumni, a group of whom are now withholding contributions from Harvard because, as one of them puts it, "We think the amounts of money being paid to [Harvard's money managers] are by almost any measure obscene." I won't go into detail, but this already almost unimaginably rich nonprofit (my husband's an alum, and I follow Harvard's wealth pretty carefully) is paying the people who make it yet richer in the tens and twenties and thirties of millions of dollars every year. This morning's New York Times goes on to describe the disgust many Harvardians feel: [C]oncerned alumni would like Harvard to lower compensation of endowment managers and use the savings for tuition and debt relief for students. These alumni say they are not impressed by [President] Summers' announcement in April that Harvard would add $2 million to its annual scholarship budget so that families earning less than $40,000 a year would no longer have to pay tuition. Tuition for the 2004-2005 school year, meanwhile, has been set at $27,448, a 5.1 percent increase from the previous year and almost three times the rate of inflation last year. William Strauss, a playwright and author who graduated from Harvard in 1969, said the tuition increase would produce about $60 million or $70 million in additional revenue for Harvard "about as much as two of the managers of the endowment took home last year," he said. He said the increase in the scholarship budget, meanwhile, does little to address the problem of tuition affordability. "President Summers and various heads of the graduate schools speak in anguish about today's young generation and how it is not going into public service," he said. "Well, students graduate with these huge loans they need to pay these tuitions and cannot afford to go into government, the arts, teaching and a variety of other careers that are worthwhile but don't pay like investment banking or corporate law." For David Kaiser, a classmate of Mr. Strauss who is a historian at the Naval War College, the compensation issue is a matter of values. He became incensed when, a few days after Harvard announced that it had paid its money managers more than $100 million, it cut 10 library workers citing budgetary cutbacks. B-b-b-but! "Harvard," writes the Times reporter, "prefers to compare its money managers' compensation to that awarded in the private sector." Uh huh. Howsomever, Harvard University is a non-profit. If you're asking me to judge your non-profit compensation scheme by a profit compensation scheme, I have to say, with that greatest of Wall Street scriveners, that I prefer not to. |