This isn't law, its journalism, and frankly the article is well written and asks a good question -- why are these (extremely wealthy) universities finances so brittle?
The question is self-answering as soon as you read the first two sentences though.
> Columbia...has an endowment of roughly $15bn. Mr Trump’s administration withheld a mere $400m in federal funding.
With the best investing in the world, that $15bn might throw off 1 billion a year in perpetuity. $400m (a year) is a very serious chunk of the university's budget.
Exactly... Scaling the numbers down: It's as if a person has $1.5M net worth, and their investments produce $100K per year. They are also simply being handed $40K per year from someone they disagree with, but who otherwise reliably provides that income. Are they just going to turn that money down because of this ethical disagreement? A lot of people wouldn't.
Or alternatively, their investments from one account produce $100K per year, their investments from another account (non-Federal grants) produce an unknown amount, and they have a job (tuition payments) that produces another unknown amount. How significant is 40% of the 100K?
We don't know unless we fill in the unknown numbers. Knowing that the amount of federal aid being removed is 40% of an estimate of the amount produced by one source (the endowment) isn't enough information to answer the question. The right question is what percentage of their budget this represents.
From what I can tell, Harvard's actual annual budget is about $6.5B (https://www.harvardmagazine.com/2024/10/financial-report-fis...). A $400M shortfall is thus about 6% of their annual budget. Significant, but also something they could probably cover for the next decade or two by drawing down their endowment until they adjust.
It isn't law, but why does the principle exist in law? That's what I'm asking you to think about. Why would judges who have to make decisions about people's lives do this? Is there a good reason for it?
