Harvard University, long at the pinnacle of U.S. college institutions, also has the distinction of running a nonprofit that leads the nation in raising the most money without spending a dime on public fundraising.
The university’s Management Private Equity Corp. reported raising $1.6 billion in contributions in 2009 — the largest amount of any of the 6,711 nonprofit groups in America that also reported zero fundraising expenses, while receiving most of their contributions from non-government sources, in their most recently available reports to the Internal Revenue Service.
The corporation doesn’t raise money directly from Harvard alumni or from the general public. Its contributions, instead, come from a related nonprofit organization, the Harvard Management Co.
“The Harvard Management Co. only invests on behalf of the University,” said university spokesman John Longbrake said in a statement. “Fundraising is done by the University.”
Harvard operates the world’s largest endowment, currently worth $32 billion. The complicated and lucrative transfers between Harvard’s nonprofits offer a window into the high-flying finances of the nation’s largest tax-exempt organizations.
According to a statement posted on Harvard Management Co.’s website, the company “manages Harvard University’s endowment and related financial assets.”
The total value of Harvard’s U.S-traded stocks managed directly by the company stands at $1.05 billion, according to a disclosure report filed by the company with the U.S. Securities and Exchange Commission in February. Harvard holds shares in 91 securities publicly traded in the United States.
Harvard’s largest investment, both in terms of market value and the number of shares held, is in iShares Brazil, an exchange-traded fund which tracks the performance of the Brazilian market. Other investments include similar funds tracking the emerging markets in China, South Korea, and Chile, as well as shares of the Pebblebrook Hotel Trust — a real estate investment trust — and aerospace supplier Goodrich Corporation.
Harvard Management Co. told the Internal Revenue Service that it was “established to promote the educational purposes of the President and Fellows of Harvard College, a nonprofit institution for higher education, by providing investment research, advice, counsel and management to and for the benefit of president and fellows of Harvard College.” The management company said it is paid by the President and Fellows of Harvard College group to provide these services.
The Private Equity Corp. is not the only nonprofit run by Harvard Management. The company also oversees Harvard Private Capital Realty, Inc., and Harvard Private Capital Holdings, Inc.
In 2010, the realty and capital holdings nonprofits reported receiving $795.8 million and $160 million, respectively, as contributions from the management company.
Of all five of these Harvard-related nonprofit organizations, only the President and Fellows group reported any fundraising expenses. It told the IRS that it spent almost $88 million in 2009 to raise funds for Harvard.