When I was in college, people used to joke about Harvard being a gigantic hedge fund that just happened to run a university as a sideline. These days, the university still has its faculty, its students, and (most importantly of all) its reputation, but the hedge fund seems to have run into a ton of trouble. It’s not only—or even especially—that they’ve lost money in the downturn. Rather, the crux of the matter is that some of their more exotic investments seem to have got them stuck in a nasty liquidity squeeze that’s forcing budget cuts.

Felix Salmon remarks:

And maybe Harvard’s alumni might start giving a lot more now than they have in the past. After all, until recently, any giving from alumni was dwarfed by the investment gains of the endowment, and so the incentive to add another drop to the bucket was greatly reduced. Now, by contrast, cash from alumni is desperately needed to meet the university’s annual liquidity requirements. It might even feel better, giving money when you know it’s going to actually be spent, rather than giving money simply to augment some gargantuan endowment.

My advice to my fellow alumni would be: Don’t.

If you want to give money to an educational institution, do some research and find a charter school in your metropolitan area that’s obtaining good results with a demographically unfavorable group of kids. Or find help our a regional public college of little repute that provides valuable educational services and could really use the money. Sure, if your checkbook is fat enough to finance a research endeavor that could make a major contribution to discovering an HIV vaccine or something it might make sense to invest in a world-famous university. But as a general matter, fancy schools that are already rich and famous and overwhelming serve students from privileged backgrounds are not a good target of charitable giving.