Harvard And MIT Invoke Legal Protections To Curb Payouts Despite Massive Endowments

Harvard University and the Massachusetts Institute of Technology (MIT) have leaned on a century-old law to avoid paying out large sums in lawsuits despite having billion-dollar endowments, legal records show.

President Donald Trump has accused Harvard of abusing its Internal Revenue Service (IRS) tax-exempt status in his ongoing battle against the Ivy League over antisemitism concerns and a lack of ideological diversity. But one advantage of nonprofit status has gone under the radar: Harvard and MIT exploit a state law capping tort claims against charities at $20,000, despite overseeing world-class investment firms managing endowments of $53.2 billion and $24.6 billion, respectively.

“If [Massachusetts residents] get hit by an Amazon truck and become a quadriplegic, be assured that Amazon will be paying them many millions of dollars to look out for them for the rest of their lives. But if they get hit by a Harvard University truck, with a $50 billion endowment, they’re not going to get squat,” Carmine Gentile, a Massachusetts senator, said in an April hearing in support of his bill to strike the charitable immunity cap.

Massachusetts is one of just three states with so-called “charitable immunity,” according to the Nonprofit Risk Management Center, and it imposes the lowest cap on potential damages.

Records indicate Harvard and MIT have in effect argued allegations ranging from the sexual harassment of students to pollution fall under their “charitable” mission. The cap has proven to be an obstacle for plaintiffs suing the universities, who must prove the wrongdoing is “entirely disconnected” from an organization’s charitable purpose to nix the cap, attorneys say.