“I don’t know about that, but I do think it’s ridiculous people still donate to colleges with $1 billion+ endowments, knowing full and well that only a fraction of the endowments actually go towards subsidizing tuition for students. Why not donate to other charities instead, or to scholarship funds that directly help students go to college?”
Why is this ridiculous? People donate paintings to the Museum of Fine Arts in Boston all the time- believe me, they do not lack for artwork- half of their collection is in storage at some point because they don’t have the space to display it all or it’s on loan overseas. People donate to the Red Cross even though that organization makes over a billion dollars a year selling biologics (blood, plasma, and other components).
People donate to organizations which have proven themselves to be responsible stewards of donated funds; which prove themselves to fulfill their mission as they define it; which prove themselves in terms of following the laws which apply to them.
There are a bunch of small organizations in the US that do disaster relief… every time they get audited someone discovers that they spend 80 cents of every dollar they raise on fundraising and administrative expenses ( the Red Cross is much more efficient). There are scores of small museums and historical societies which discover every year that their holdings are mildewing or being destroyed by vermin/insects because they don’t have state of the art climate control (which the MFA clearly has).
Donors don’t want to prop up a failing organization with their dollars. They want to donate to an organization which manages its resources in an efficient manner.
Building a successful endowment seems to be a perfect example of handling resources efficiently. Ergo- donors like to give to Harvard more than Sweet Briar.