Just remember, however bad we think Cornell's financial situation may be in, it could always be worse. Typically, companies and big institutions manage their cash conservatively in order to have it readily available, by keeping the money in such low-risk investments as money-market mutual funds. But Harvard placed a large portion of its cash with Harvard Management Co., the entity that runs the university’s endowment and invests in stocks, hedge funds, and other risky assets. It has been widely reported that Harvard Management’s endowment investments were battered in the market crash - down 27 percent in its last fiscal year. Not revealed until yesterday was that the school’s basic cash portfolio had also been caught in the undertow.The university disclosed yesterday that it had lost $1.8 billion in cash - money it relies on for the school’s everyday expenses - by investing it with its endowment fund, instead of keeping it in safe, bank-like accounts. The disclosure was made in the school’s annual report for the fiscal year that ended June 30.
If this doesn't speak to Harvard's arrogance, I don't know what does. And if it wasn't so hilarious, it would be sad. Just think about all of the educational good that cash-strapped community colleges and state campuses could do with $2 billion dollars.
At the very least, it will give us something else to heckle Harvard about when our hockey and basketball teams trounce Harvard this year.
