Harvard University is considering selling $1.65 billion worth of bonds after donations from wealthy donors dried up in the wake of the anti-Semitic row that cost the president her job.
The move was noted by billionaire alum Bill Ackman, who predicted the college would have to make cuts after its wealthiest benefactors cut more than $1 billion in donations.
President Claudine Gay resigned in January after Ackman accused her of “exploding” anti-Semitism on campus in the wake of the Oct. 7 attack on Israel.
But the university remains embroiled in claims that its programs to promote diversity, equity and inclusion (DEI) promote a climate of anti-Jewish bias, and Ackman warned that donors “won’t be coming back for some time.”
“Alumni will at least want to know who the next president is and the status of DEI and anti-Semitism on campus before resuming donations,” the hedge fund boss tweeted.
Harvard alumnus Bill Ackman, who helped organize a billionaire boycott in the wake of the anti-Semitism row, saw the university’s attempt to get its finances back on track
Former Harvard President Claudine Gay resigned last month amid anger over her handling of allegations of anti-Semitism on campus and her disastrous testimony before Congress
“At the very least, alumni will want to know who the next president is and the status of DEI and anti-Semitism on campus before resuming donations.”
On Tuesday, the council registered its plan to sell $750 million of taxable fixed-rate bonds the week of March 4 and $900 million of tax-exempt bonds in April.
The University of Massachusetts has an AAA rating and is the richest university in the world, with total assets of about $50 billion, more than the economies of 120 countries.
But most of its assets are tied up in real estate, venture capital and long-term investments, and donations covered 45 percent of revenue expenditure in 2023, leaving it vulnerable to a cash flow squeeze.
And Republican lawmakers have threatened to target the college’s federal funding, which makes up another 11 percent of spending.
“Like most endowments, Harvard models expectations of fund distributions as it relates to their liquidity,” Ackman wrote.
‘Harvard also makes assumptions about the inflow from alumni donations.
“The model likely did not predict a decline in liquidity events from private equity, real estate and venture capital, and the dramatic decline in donations.
Protests against Israel have rocked the Massachusetts campus since the Hamas attack
Thirty-one student organizations signed a letter blaming Israel alone for the October 7 attack
The university is believed to have lost more than $1 billion in donations in response
“That’s probably why Harvard recently announced this bond issue, which is taking place in an environment with significantly higher interest rates than a few years ago.”
Ackman, who is Jewish himself, has donated tens of millions of dollars to the university that taught him in the 1980s, but called on his fellow billionaires to turn off the taps in October.
Len Blavatnik, whose family foundation has given the Ivy League at least $270 million, halted donations citing “rampant anti-Semitism on campus,” and Leslie Wexner, the former CEO of L Brands – the parent company of Victoria’s Secret, also joined in at the boycott.
Israeli billionaire Idan Ofer and his wife Batia have blasted support for Ms Gay’s silent response to a letter signed by 31 student organizations blaming Israel for the Hamas attack.
“President Gay’s failures have led to billions of dollars in canceled, paused and rescinded donations to the university,” Ackman wrote in December.
“I am personally aware of more than a billion dollars in discontinued donations from a small group of Harvard’s most generous Jewish and non-Jewish alumni,” he added.
Ms. Gay, the first black woman to head the Ivy League college, resigned in January after a disastrous congressional hearing in which she was unable to say whether calls for genocide would constitute intimidation.
University of Pennsylvania President Liz Magill also resigned after hedge fund manager Ross Stevens threatened to withdraw a $100 million donation in light of her testimony before the same committee.
Last week, a faculty organization that claims to support Palestine posted an anti-Semitic cartoon on Instagram showing a Jewish person hanging black and Arab men.
And earlier this week, the Harvard Jewish Alumni Alliance announced plans to investigate the university’s course offerings to find out what they believe is driving anti-Semitism at the Ivy League.
“There are entire Harvard courses, programs and events based on anti-Semitic lies,” alleged Dana Horn, a Harvard graduate and member of an anti-Semitism advisory board organized by former President Gay.
Billionaire couples Leslie & Abigail Wexner, and Len and Emily Blavatnik are among those halting university donations
More details about Harvard’s finances could be revealed if Harvard moves forward with its proposed bond sale next month.
“It would be interesting to understand how much the modeled cash flows have declined since original expectations,” Ackman wrote.
‘I wouldn’t be surprised if Harvard announces a substantial cost-cutting program soon.
‘I suspect that alumni donations will not return for a while.’