If you ever thought of being a donor to your favorite college, or leaving an estate gift, I have one piece of advice: don't do it.  This isn't out of a cold heart, or being ungenerous, but from practical concerns over university and college financial corruption.

The same thing applies to making political contributions: the money just goes into a swamp, and both must be starved (or drained).  Donations, if any, must be highly structured, with donor controls and institutional reporting.  In both cases, you have to think and act like a shareholder and owner.

Giving money to a university is like government taxation schemes: the money disappears in costs.  Economist Robert Topel at the University of Chicago wrote the "white paper" on why your money never goes to what you think it does: it gets eaten up with bureaucratic overhead (his academic colleagues do not generally like his report).

The problem is so bad, as Topel shows mathematically, that the ratio of tax to any benefit is now over 250:1.  In the case he analyzes, carbon taxation, which is among the Biden administration's "green energy" policy centerpieces, it takes over $250 of tax just to make $1 of carbon benefit, and even that is subject to a lot of imagination as to what the actual "benefit" is.

Back in the university setting, faculty and staff have grown exponentially to the point where, in some colleges, they outnumber the students.  In the meantime, something else is going on that drains your donor dollars: university senior administration feeding at the endowment, tuition, and donor trough, and living luxury lifestyles.

An example comes from Vanderbilt University, which is merely one case. 

The chancellor of Vanderbilt University, Daniel Diermeir, argues that endowments support "vital research" within universities and that this is as important as, or more so than, financial support for students.

Diermeir leaves out two critical elements, however, in his portrayal of how universities spend money from their endowment and operating accounts.  One involves a number of initiatives that are disguised as research.  An example at his institution is a $17-million project to enhance DIE within its medical school.  The other element involves senior administration pay.  Vanderbilt's head of medicine received over $5 million in compensation, while its three highest paid employees received over $10 million in one year alone.  Mr. Diermeir's university predecessor doubled his salary from $637,288 to $1.4 million, rising to $4.3M at one time, including a $2.9M bonus.  One of Diermeir's first acts as chancellor at Vanderbilt was to announce his Chancellor's Recognition Award to faculty and staff (but no students) for thousands of employees totaling in the millions of dollars.

Mr. Diermeir's previous total compensation at the University of Chicago, with the highest student tuition in the country (over $80K per year) was over $1 million.  His annual total compensation at Vanderbilt is even higher, and he was recently subject to a conflict of interest complaint: Diermeir and his wife are the principal officers of at least nine Limited Liability Corporations registered to a $2.4-million "penthouse" in Nashville that he uses as his university residence.  Diermeir also served on the management board of the FBI, and acts as a board member or adviser to numerous government and commercial interests that regulate, and sell into, the higher education sector.

University endowments may underpin "research," but they first underpin a financial windfall for university administrators and their lifestyles.  Taxpayers, donors, and students underwrite it, while the federal government facilitates it by feeding universities with grants, and then making sure the money goes to the Biden administration's ideological priorities, while it looks the other way on mutual self-dealing.

Matthew G. Andersson is a former CEO and has been featured in the Wall Street Journal, the New York Times, the Financial Times, and the Chronicle of Higher Education and has testified before the U.S. Senate.  He is a graduate of the University of Chicago and author of the upcoming book Legally Blind.  He studied with White House national security adviser W.W. Rostow at the LBJ School of Public Affairs.  

Image: pasja1000 via Pixabay, Pixabay License.