Published March 15, 2025
Republicans looking for new sources of revenue to help finance further tax cuts or reduce the deficit are appropriately looking at university endowments. In so doing, they should raise their sights to include large, grantmaking nonprofit foundations.
Large university endowments remain one of the most undertaxed sources of capital in America. Entities such as Harvard and Yale sit on tens of billions of dollars, which they invest in the market just like for-profit entities do.
Yet, they pay only a fraction of the taxes that their private competitors pay. Private companies pay a 21 percent marginal corporate-income-tax rate, and hedge fund investors still pay the relevant capital-gains rate if the funds pass their gains onward.
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Henry Olsen, a senior fellow at the Ethics and Public Policy Center, studies and provides commentary on American politics. His work focuses on how America’s political order is being upended by populist challenges, from the left and the right. He also studies populism’s impact in other democracies in the developed world.
