An Unfair Target

Harvard has a $22.6 billion endowment, and every year it increases by nearly $500 million. Annually, the University receives roughly $200 million in NIH grants, as well as millions more from various federal programs. A Harvard education costs over $120,000 in tuition alone. To put it simply, Harvard is an attractive target for taxation.

So it’s not surprising that the Cambridge City Council has passed a resolution attempting to get Harvard to pay a larger share of property taxes. As property taxes in the city continue to rise, politicians have attacked Harvard in a populist bid to calm residents. But while it is true that Harvard’s tax exempt status saves the University millions of dollars a year, Harvard should not feel obligated to repay a debt that it does not owe.

The tax exemption policy for non-profit organizations, educational institutions included, is long standing and has maintained bi-partisan support since its inception. The rationale is simple: non-profit organizations provide a benefit to society that more than balances the taxes that they would otherwise pay. Some non-profits, such as homeless shelters, provide direct services to individuals, which benefit the broader community. Others act more indirectly by increasing property values or bringing money to an area’s economy. Simply because Harvard is wealthy doesn’t mean that it no longer brings these benefits to the Cambridge community—thus, it still qualifies for these tax exemptions. In fact, the University provides even more benefit to Cambridge and Boston than it would if it didn’t have an endowment at all.

First and foremost, the University and its subsidiaries provide jobs for many Cambridge residents. The University hires thousands of people who keep the campus running smoothly on a daily basis. Harvard’s high profile also attracts many new small businesses, keeping the Cambridge economy constantly invigorated. Moreover, the University’s scientific strides have helped make the Boston area the hottest new biotechnology research area in the country.

While the University as a whole contributes to the city, the students that live here are also a crucial part of Cambridge prosperity. As shown by the frequent deals handed out by local banks and businesses every fall, Harvard students are a large block of customers in Cambridge. We eat at Cambridge restaurants, buy things from CVS, and spend money on local entertainment. Without access to the wallets of Harvard students, many local business owners would have to shut their doors.

College students also invest themselves into this city. As shown by the Phillips Brooks House Directory, there are a limitless number of public service programs in which students engage. Harvard students act as older siblings to local teens, spend time with kids affected by cerebral palsy, hold summer camps for local kids, and help run a local homeless shelter. Investments of these sorts, while perhaps not directly reflected in the city’s GDP, cannot be overlooked as forms of indispensable contributions to the community.

But all of these activities don’t even begin to capture the effect of Harvard University on the rest of the world. The professors here run labs that research cures to diseases ranging from diabetes to Alzheimer’s, while many students train for high-level positions in government and will shape public policy in the coming decades.

Harvard’s tax exemption is given because society believes that the organization provides indispensable services—services that far outweigh the remunerative sum of a property tax. Harvard students provide sustenance for Cambridge businesses while training for a lifetime of giving back to the community. A large endowment and large prospective tax revenues don’t change that.

Ashish Agrawal ’08, a Crimson editorial comper, lives in Stoughton Hall.