“Don’t gamble with the money you need to pay the daily bills” is, according to Beth Healy of the Boston Globe, a basic rule of family finance.
The university [Harvard] 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.
I found this story particularly interesting, for multiple reasons. First is the set of quotes Healy scatters through the article. A former Dean, still at Harvard, remarked on the “interesting way to handle the grocery money.”
A Stanford spokeswoman said that “it would be highly unusual for the California school to put funds from its general account into long-term investments.” Did she use the phrase “more Ivy than brains”? The Globe doesn’t tell us.
Second is the vast sum that Harvard needs for everyday expenses. The University could buy a lot of groceries for $1.8B, even if it shopped at Whole Foods.
Third, and last for now, is the question of oversight. Shouldn’t someone be watching the financial wizards who manage Harvard’s money?