The Ivy League donor backlash is a PR nightmare, and that's the point

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Yesterday, we talked about some of the big-name, deep-pocketed businessmen who were, to say the least,disappointedwith their alma maters' responses to what they considered antisemitic behavior at Harvard and UPenn.

The backlash of donors has caused a PR nightmare for schools. That's exactly what the point is.

My colleague Nathaniel Meyersohn writes that donors understand that withdrawing their funds will not cause significant financial damage to Ivy League schools, who boast large endowments. The point of donating is, aside from showing your support for your school, to exert soft power in influential institutions which shape the minds of future generation. Of course, you can also get a tax deduction.

Lee Gardner, who writes about higher education finance for the Chronicle of Higher Education, says that the impact of angry donors pulling back is unlikely to be immediate. He said that it might affect future gifts and donations.

Gardner stated that 'Ivy League Universities have the relative luxury to be extremely wealthy'. They are more financially protected from the negative impact of donors' upset.

The backlash from donors reflects how colleges are forced to operate themselves like corporations.

As with any large business, an university has a responsibility to both its donors (who behave like shareholders and use their money to wield a cudgel), as well as to its students (their main consumers who may become donors in the future). Other stakeholders include professors, staff, parents and other stakeholders.

Even though losing just one or two donors won't be a death blow to elite colleges, they will still need donations to keep the lights on. Even schools with a lot of money like UPenn and Harvard would be left with a huge hole if all their donors suddenly stopped giving.

Researchers at Indiana University’s Lilly Family School of Philanthropy concluded in a study for 2020 that philanthropic support of US colleges is at an all-time high. Public and private fundraising powerhouses have launched campaigns with billion dollar goals, and are succeeding.

Harvard's revenue is largely derived from philanthropy, which accounted for 45% of its $5.8 billion income in the past year.

Harvard claims that the annual revenue from its education and research efforts is not enough to cover the costs of the school's operations. The school relies on philanthropy in order to cover the gaps.

UPenn's revenue of $14 billion was largely attributed to philanthropic donations. UPenn gets most of its income from the hospital network.

Lawrence Summers, former Harvard President and US Treasury Secretary has criticised the'morally inconscionable' statement made by students about Israel, which sparked the donor revolt.

He said, however, that financial threats by donors are not the best way to influence university positions on these matters.

Summers said on CNN Tuesday that he believes universities should make adjustments based on their own consciences and discussions within their communities rather than in response to pressures from the financial world.

I can imagine one day telling my grandchildren stories about Earth's old times, in our space pod. We used to write numbers on small pieces of paper that we carried around in a book. We drove on a 'road' and shouted about "traffic." Netflix costs only $8 per month.

The last one feels like ancient times, to be honest.

Netflix announced a new price hike on Wednesday for some customers. The cost of the premium ad free plan in the United States will increase by $3 per month to $22.99. Its basic plan in the United States will increase to $12. All other plans will remain the same, including its $7 tier that is supported by ads.

TikTok is the latest app to catch the attention of teens. It's the one that keeps them glued to their phones, so China can spread communist propaganda or whatever.

Snapchat, the most popular app among 20-year-olds, was overshadowed by all the TikTok Pearl-clutching and Meta Threading. Clare Duffy, my colleague, writes that Snapchat is the fastest-growing platform in the world.

Snapchat has 397 millions daily active users, which is more than X (formerly Twitter).

It is important to note that Snapchat+ reached 5 million subscribers last month, which means it has already achieved half of its 10 million target in just one year.

With 5 million subscribers who pay $3.99 per month, Snapchat+ will earn $239 million annually.

Despite the growth in users, revenue has not kept up. Snap, Snap's parent, reported a $769 million operating loss in the first half of the year. Revenue fell more than 5% from the previous period. Shares of the company are down by more than 11% from this time last.

Snap is expected to report its third consecutive quarterly revenue decline when it reports next week.

Why it matters

The social media landscape is a mess at the moment, full of misinformation. People are desperately trying to get us to consume content from people that we have never heard of. Instagram's appeal is diminished by ads that appear to be relevant and suspicious, as if your phone was listening in on your conversations.

Clare writes that Snapchat has taken a different approach, focusing on connecting its users with their social network in real life.

Of course, it's not immune to the mess.

Snapchat is also trying to restructure its advertising to adapt to the new Apple app tracking policies. The company is investing heavily in artificial intelligence and augmented realities.

Analysts are still intrigued by Snap’s growth in users, even though the company has been around for more than a decade.

Angelo Zino is a senior equity analyst with CFRA Research. He said: 'In my opinion, there's a significant value for a firm that's increasing its installed base at such soaring levels.' When you think of advertisers, they will go to where the eyeballs are.

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