Harvard president defends funding

Says endowment fuels innovation

Harvard's Drew Faust had been publicly quiet on the criticism.

CAMBRIDGE - In a sharp rejoinder to critics of massive university endowments, Harvard University president Drew Faust said yesterday that colleges must take a long view in managing their reserves to maintain their research ambitions and international standing.

"The endowments at Harvard and other great universities have created a system of higher education that is the envy of the world," she said in a speech during the university's commencement.

"It has opened doors of opportunity ever more broadly; it has generated powerful new understandings about human nature and the world we inhabit; it has fueled revolutionary advances in science; it has helped drive economic growth and expansion in our nation and the world."

The growing fortunes held by elite colleges have drawn scrutiny in recent months from Congress and other critics who contend that the institutions are not doing enough to curb tuition costs and open their doors to low- and middle-income students.

Harvard's $35 billion endowment, by far the nation's largest, has become the leading target of assertions that universities are not justifying their nonprofit status.

But in a spirited defense, Faust, who has remained quiet on the topic since it emerged as an issue last fall, said charitable donations to college endowments are "in large measure responsible for the success of the American system of higher education."

"The accumulated gifts of our alumni and friends offer us both the resources and the independence to support work that may not pay off in the short term," she said. "They protect us against over-accountability to the present or to the merely trendy. They preserve our ability to be creative and rigorous, to take intellectual risks in pursuit of ambitious ideas."

More than 70 colleges have endowments that exceed $1 billion, according to the most recent national survey.

Faust said the university's expanded financial aid system, which sparked a series of similar moves at other top-tier private schools, will help make Harvard "a realistic possibility for any talented student, regardless of financial circumstances."