Lost in the hullabaloo over the recent Vanity Fair profile on Sarah Palin and her subsequent, if unrelated, resignation was the magazine's article "Rich Harvard, Poor Harvard" by Nina Munk. The spread chronicles the massive expansion of Harvard's wealth, which grew from $4.8 billion in 1990 to $36.9 billion and the rapid pace Harvard opened new buildings. But since October the endowment has lost $8 billion dollars, with President Faust warning it could lose as much as $11 billion by the end of fiscal 2008. Now trash cans overflow, shuttles are fewer, and athletes have to suffer through continental breakfasts.

"Rich Harvard, Poor Harvard" is full of blind quotes pointing fingers at which administrator screwed which pooch. No matter who is responsible, though, one thing is clear:

"They are completely fucked."

To find out just how fucked Harvard is you have to buy the August edition of Vanity Fair. That is, unless you read our recap after the jump.

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Princeton President Shirley Tilghman announced this morning that her glorious university will relinquish one-half of one percent of its endowment ($100 million) to settle a six-year-old lawsuit with a clan of grocery store magnates. In 1961, the Robertson family gave $35 million to found the Woodrow Wilson School for Public and International Affairs; as of June 2008, the Robertsons' endowment had expanded to $900 million (score one for the i-bankers!) and the students at the prestigious Woody Woo were using their fancy educations to get jobs in lucrative areas like finance (score two for the i-bankers!) instead of piddling work in the public sector (sad pandas for the Robertsons). So the Robertsons sued Princeton for blowing their wad on a bunch of greedy little prigs, and Princeton was all, "Not our fault if President Bush sucks and government jobs are thankless and painful," and both sides spent tens of millions repeating those two messages for 76 months.

Tilghman outlined the specifics of the settlement in an extraordinarily long email (which we provide in full after the jump) but all that really matters is this part:

It is tragic that this lawsuit required the expenditure of tens of millions of dollars in legal fees that could have and should have been spent on educational and charitable purposes.

Lady, "tragic" is when someone dies. Spending a few million dollars to safeguard your hoard of billions is by definition the passionless pursuit of institutional self-interest. Note that "charitable purposes" refers to a charity the Robertsons fund, which is where the contested money will now go; as in, if Princeton had its way, none of the money would be going to charity, but to the upwardly mobile neophytes of the Woodrow Wilson School. Basically, this entire story is about i-banking, which is also why June's $900 million is only worth $600 million now, and why future WWS students may actually end up in public sector jobs. Not because the Robertsons sued, not because Shirley is feeling charitable, but because all the awesome money-filled jobs have disappeared into thin air. Also, this.

Moral of the story: Losing money makes people more charitable.

After the jump: Shirley Tilghman's email bidding adieu to some money, but keeping a lot more, and some gently menacing words from the Robertsons.

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Last week, Harvard President Drew Faust sent out a university-wide email detailing to what extent the school of swank would be impacted by the global economic crisis. In short, Harvard "has weathered many storms" (read: "has lined their pockets well") but will suffer some set-backs in coming months. The fortune few will ride this one out with some paycuts and constraints. According to Dr. Faust:

Harvard is not invulnerable to the seismic financial shocks in the larger world. Our own economic landscape has been significantly altered. We will need to plan and act in ways that reflect that reality, to assure that we continue to advance our priorities for teaching, research, and service.

Thank God: Harvard is going to focus on teaching and research again. For a second, it looked like the nation's oldest institute of higher learning just enabled psychopaths and racial profilers. The announcement from President Faust, Larry Summer's replacement in Massachusetts Hall, sounds less like a policy shift than it does a PR stunt. Just 6 weeks ago, the Harvard Management Corporation (HMC), a bunch of suits who control the fate of the universe—err, the endowment—announced 8.6% growth on Harvard's already gargantuan $36.9 billion portfolio as Standard & Poor's lost 3.6%.  Break out the $100-bill-scented tissues.

While the next Dear "John Harvard" letter from the HMC isn't due until next summer, Harvard shows no signs of tightening the belt so far.  In her letter, President Faust emboldened the college's commitment to providing full rides to students whose families earn less than $60,000 per year. Meanwhile, the Harvard Kennedy School of Government just shelled out $10 million for a program to train emerging leaders from developing countries. [Insert: "Not so evil after all" comment here.]

Read Faust's letter in full along with some sob-stories about poor, jobless HBS grads after the break.

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If we have learned one thing from market meltdowns, it's that Wall Street is utterly glutted with the Ivy League's overeducated ilk, from top to (curvaceous) bottom and everywhere in between. Now, another wrinkle: An Ivy League university's funds, temporarily frozen and cruising for annihilation at the hands of financiers educated at that same institution.

We are talking, of course, about Penn. According to the DP, Penn keeps a small portion of its coffer at Commonfund Treasury, a $9.3-billion operation specializing in the management of educational cash, helmed by a handful Princeton, Yale, and Wharton grads. Wachovia (a Commonfund trustee), announced today the coming termination of all short-term Commonfund accounts. Something about liquidity and distributing assets? Foreseeing the pandemonium this announcement would cause, Wachovia helpfully froze affected accounts to prevent the First Horse of the Finance Apocalypse: A Bank Run.

Luckily, the entirety of Penn's frozen funds is a measly $100K, which means all they have to do is, like, cash two undergrad tuition checks, and they'll be back in the black. (Although perhaps with a shittier credit rating.)

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While Rupert Murdoch's fugly mug steals the front page of every major newspaper this morning, it's Harvard's endowment that's featured front-and-center in today's Money & Investing section of the Wall Street Journal -- and according to the paper, the endowment fund graduates as many sought-after money managers as the university graduates future journalists.

But all isn't good in Crimson Country this morning, as the Journal reports that the university lost $350 million last month through an investment in a hedge-fund firm founded by former Harvard foreign-stock holdings manager Jeffrey Larson.

Seems that Harvard education -- in this case, experience -- isn't quite paying off. How's that old saying go? You shouldn't shit where you sleep?

Though $350 million is a "relatively small hit" for the nation-leading $29 billion Harvard endowment, the Journal says it's a good case of maybe-not-quite-what-to-do for the rest of academe: "It highlights the risks as colleges nationwide embrace nontraditional investments such as hedge funds and private equity."

As it turns out, Larson isn't the only high-profile former Harvard-endowment manager with a mixed record since departing from Cambridge, leading the Journal to conclude that Harvard might be paying its managers a bit too much -- in the millions, more than Nobel Laureates and deans -- to manage Harvard's big baby.

Now this kind of news ain't exactly kegstands and Sharpie-shaming, but it means a lot more for the continued existence of the fabled Ivy heirarchy Newell mentioned in his last post. After all, when it comes to a pissing match, it's all about distance -- and there's no ignoring the New York Times' golden profile of Yale's money man earlier this year.

Ball's in your court, Elis. -- ANDREW NUSCA

The endowment data for FY'05-'06 are in, and you know what that means -- a Harvard-Yale pissing match! Only this time, it's the derivative of that arc of piss! Inside Higher Ed reports:

Yale University may be #2 in endowment size, but it topped #1 Harvard in rate of growth, according to data released Monday. Yale reported a 22.9 percent return on its endowment in the fiscal year that ended June 30, bringing the endowment to $18 billion. Harvard last week reported a 16.7 percent return, allowing its endowment to exceed $29 billion.

Only 16.7 percent? Incompetence! Who's in charge of the Harvard endowment these days, Tara Reid?