Make Harvard Congregationalist Again

President Trump’s so-called One, Big, Beautiful Bill contains a slew of interesting provisions, one of which concerns the taxing of educational institutions’ endowments. Section 112021 “amends the current excise tax on net investment income framework for certain private colleges and universities under IRC section 4968 with a tiered system based on an institution’s student-adjusted endowment.” Under the proposed tiered system, the current 1.4 percent excise tax could increase to 21 percent for some unlucky schools.

For the most flush institutions, those with student endowments in excess of $2 billion, the new 21 percent bracket is a fiscal gut punch and the tax consequences could be ruinous. The twist is that there is a carveout for qualified religious institutions. If a university is religious enough, it’s off the hook: “This section also provides an exemption from being considered an applicable educational institution, provided the institution meets certain requirements related to being a qualified religious institution.”

A handful of universities still cling to their religious roots in the United States. Religiously affiliated universities include schools such as Baylor University (Baptist), Emory University (Methodist), Grove City College (Presbyterian), Notre Dame (Catholic), Georgetown (Catholic), and Yeshiva University (Jewish), which were founded as religious institutions and have maintained their religious identities.

Many other schools, like the Ivies, were founded as religious institutions, but have since abandoned that heritage. “It may surprise some people to learn that our oldest and most prestigious universities were founded by Protestant churches for the express purpose of advancing the gospel of Jesus Christ,” writes Sam Kastensmidt. Harvard, for instance, was launched by Puritans in 1636 “to train and educate clergy for service in the new, English-speaking world.” Likewise, Congregationalists founded Yale and Dartmouth, while Baptists founded Brown, Presbyterians founded Princeton, and Anglicans founded Columbia. Columbia’s seal, as Kastensmidt notes, “is filled with religious significance. At the top of the seal is the personal name of God (Yahweh) blazing forth in Hebrew. On the bottom, there is a scripture citation (1 Peter 2:1-2).”

The Ivies’ abandonment of their religious roots was slow but sure. Brown dropped mandatory chapel attendance in 1959, with Princeton following suit in 1964. According to Benjamin P. Leavitt, “As Christianity ceased to form the core of their mission, Ivy League educators replaced it with other, more ‘universal’ ideals such as science and beauty.”

Distressingly, even schools that today are nominally religious are becoming more secular. As these schools embrace a “secular, hedonistic, materialistic worldview,” laments Arthur Goldberg, they experience “the gradual loss of the religious character of innumerable colleges and universities that were founded by a broad variety of denominations.” Goldberg argues that this secular drift has been driven by a mix of economic, cultural, and regulatory incentives. As schools sought academic prestige and access to federal financial aid, they loosened religious requirements to attract more students and comply with government and accreditation standards. The Ivy League set the pattern, gradually shifting away from explicitly Christian missions as they chased universal relevance and academic freedom. This transformation, Goldberg contends, was less a conspiracy than a response to powerful incentives that encouraged disaffiliation and the embrace of a secular, materialistic worldview.

So, faced with a 21 percent excise tax on their endowments, Ivies and other schools with prior religious affiliations should consider restoring their religious heritage. When faced with similar tax burdens, schools that have always been secular should consider becoming qualified religious institutions.

The move toward becoming a qualified religious institution might not be as hard as it sounds. Unlike their historical counterparts—for whom religion pervaded every aspect of life, and who founded their schools for the express purpose of training ministers—modern religious denominations have become increasingly secularized and are eager to welcome persons of all faiths (or no faith). For example, Baylor, while ostensibly Baptist, is quick to reassure prospective students that “being a Christian . . . is not required for admission to Baylor. In fact, our undergraduate student body represents about 40 different religious affiliations.” 

With courts reinvigorating the original, robust understanding of the First Amendment, moving away from secularization and toward religion might be a prudent move for wealthy universities. It is hard to imagine what, if any, belief held by the United Church of Christ—the modern-day incarnation of the Congregationalists who founded Harvard and Yale—would be particularly onerous for those universities or their students. Given the millions at stake, it might be time for universities to come home to church.