With The Guardian portraying the magnitude of Oxford and Cambridge college endowments on the front page as a major scandal — though taken all together they don’t reach even half of the endowment of Harvard — it seems like a good time to repost this comment I made five years ago, when the government was being attacked by Oxford’s chancellor for considering limiting the tax deduction for charitable donations to educational institutions. The post begins:
Let’s think this through:
- The government wants philanthropic funding of universities to replace public funding.
- Under current law, contributions to universities (and other charities) are matched by a 40% tax rebate for higher-earning taxpayers, so 2/5 of the costs of nominally “private” contributions are actually paid by the taxpayers. The government proposes to cap this subsidy at 15% of income or £20,000.
Do you see the contradiction? Neither do I. In a time when the government is cutting funding for all manner of worthy projects, it seems pretty undemocratic to effectively allow wealthy citizens nearly unlimited access to the treasury to support their own favourite causes. The £560 million in charitable gifts last year presumably included more than £200 million in “gift” from the government. Whether or not this is a good thing, it seems troubling, as a point of democratic principle, that control over these £200 million has been passed from the citizenry at large (in the person of their elected representatives) to the infamous “one percent”.
For the rest, see here.
I think everyone would agree that if the wealthy elite want to spend their money on providing luxury education in medieval buildings to particularly talented young people, many but not all of whom come from privileged backgrounds, that’s probably not the most useless or antisocial thing that they’re free to do with their money. (And I can confirm, from personal experience, that Oxford colleges spend insane sums of money on maintenance for their buildings.) But as long as they’re leveraging public funds, which the current government has decided to withhold from educational institutions that serve a broader public far more efficiently, it’s no longer a simple matter of private choice.