The Folha de S. Paulo reports: The University of São Paulo plans to imitate Harvard, establishing a private endowment to be filled up by alumni and, one suspects, principally, corporate sponsors, and then magically quintupled by ronin financial rocket scientists from Connecticut.
What is odd in this puff piece, however, is that while Harvard has been a purely private university since its founding as a Puritan sermonizer’s academy in sixteen something something, USP has always been a public university, free of cost to qualified students and subsidized directly by state funds. If I am not mistaken, this state of affairs is black-letter Constitution.
Given that state of affairs of utter category confusion, then, it seems hard to maintain the “just like Harvard” analogy. Nevertheless, the Folha works it.
Harvard, considered the best university in the world, has a budget of nearly R$ 6 billion. But only 20% of that sum comes from the American government.
Considered by whom? And wasn’t that endowment up to USD 36 billion just a few years ago?
Furthermore, that that much taxpayer money goes to subsidize a private institution with such plentiful means of its own actually seems sort of shocking — especially given the amount of defense-related contracts this sum represents, and the free-booting anarcocapitalism that has supplanted Veritas as the school’s official ideological compass.
The rest of the money is the sum of a set of annuities, donations and income from so-called “endowments”, which are investment funds belonging to the institution.
This is the model imported by the Escola Politécnica at USP, which now has its own investment fund — a first among public Brazilian universities.
Again: Harvard private. USP public. Harvard Business sells the naming rights to chairs of its business school faculty the same way baseball stadiums sell their naming rights to cell phone operators nowadays. Tell us again how self-sufficient its research is and appears to be?
Just like at Harvard, the fund will be managed by a third-party firm, Endowments do Brasil, which will invest what is received from private donors and alumni.
“The principal is untouchable. The dividends will be plowed back into research funding”, explains José Roberto Cardoso, director of Poli-USP.
In this way, the school gains some autonomy from research incubators run by the State — 85% of the R$ 2,89 billion given to USP is consumed by university payroll.
And now it will be able to produce research without having to pay anyone a salary to produce it?
In the case of Poli the idea came from the students themselves. It was the «Grêmio da Poli» that created the “endowment” and made the first donation: R$ 100,000. What the institution hopes for now is money from outside [the school, the state, Brazil].
The peculiarly Brazilian twist given to the concept of “managing innovation” continues to fascinate me, though I do not have as much time to follow up on it.
All I can say as an alumnus of a private liberal arts college run on the Oxford model and a gigantic state university run into the ground on the principals of social entrepreneurship is that the autonomous university system in Latin American countries is a model not to be cast aside lightly.
The pitch from Endowments do Brasil — surely there is a Portuguese word that can be pressed into service for “endownment”, such as the plain old FIP? — seems pretty greasy to me.
Harvard, Yale, Cambridge, Ford Foundation and the Bill and Melinda Gates Foundations consolidated their financial independence using endowments organized by each of them, and each of these entities withdraw each month a great deal of the financial resources they need to operate.
Correct me if I am wrong, but Ford and Gates consolidated their financial independence with predatory business practices — oiled with the blood of the workers, if you will — and then endowed Ivy League universities to stamp out junior managers preprogrammed with that same predatory frame of mind.
I personally am not ready to consider any university top-notch that still maintains a legacy admission policy — like Yale and Harvard, both of which admitted George W. Bush because of who his father was.
Filed under: Brazil, Competition, Investment Banking, Public-Private Partnerships | Tagged: education, Endowment | Leave a comment »