Trump Targets Harvard’s Tax-Exempt Status in DEI Crackdown

President Trump Takes Aim at Harvard’s Policies

President Donald Trump has escalated his push to reform higher education by threatening to revoke Harvard University’s tax-exempt status. The move comes after Harvard rejected demands from the Trump administration to overhaul its diversity, equity, and inclusion (DEI) programs, hiring practices, and curriculum.

The administration’s demands, outlined in a letter sent to Harvard, included eliminating DEI initiatives, auditing academic departments for ‘viewpoint diversity,’ and imposing stricter discipline on student protests. Harvard President Alan Garber rebuffed these requests, stating they were an illegal attempt to control what private universities teach and who they admit. The standoff marks a significant clash between the administration and one of America’s most prestigious institutions.

Financial Pressure on Harvard Intensifies

In response to Harvard’s defiance, the Trump administration froze over $3.2 billion in federal grants and $60 million in contracts. This action followed Harvard’s refusal to comply with demands that also included banning face masks at protests and cooperating with immigration authorities on international students. The administration has already withheld funds from other elite colleges, but Harvard is the first to openly resist.

Losing tax-exempt status could cost Harvard billions over time, as its $53 billion endowment—the largest in the nation—relies heavily on tax-deductible donations. According to a Bloomberg analysis, the university could face an annual tax bill exceeding $465 million without its nonprofit status. The Treasury Department reportedly asked the Internal Revenue Service (IRS) to consider revoking Harvard’s tax exemption, a process that could involve a lengthy audit.

IRS and Legal Challenges Ahead

The IRS, under Acting Commissioner Gary Shapley, has the authority to revoke tax-exempt status if an organization violates nonprofit rules, such as engaging in excessive political activity. However, stripping a major university like Harvard of its tax exemption would be unprecedented. The only notable precedent is Bob Jones University, which lost its tax-exempt status in the 1970s due to racially discriminatory policies, a case upheld by the Supreme Court in 1983.

Harvard has already taken steps to counter the administration’s actions, hiring attorneys William Burck and Robert Hur to argue that the demands violate the First Amendment. The university has also spent over $600,000 on lobbying in 2024 to protect its endowment and federal funding. Legal experts suggest that any attempt to revoke Harvard’s tax-exempt status would face significant court challenges, potentially reaching the Supreme Court.

Conservative Support for Trump’s Strategy

Prominent conservatives have rallied behind Trump’s efforts. Vice President JD Vance and Representative Jason Smith have long criticized Harvard’s endowment tax exemptions, arguing that elite universities promote liberal agendas at taxpayers’ expense. Conservative strategist Christopher Rufo praised the administration’s approach, urging Trump to use federal authority to dismantle DEI programs, comparing it to desegregation efforts during the Civil Rights Movement.

Rufo specifically pointed to Harvard’s events, like graduation celebrations for specific ethnic groups and a 2021 theater performance for ‘Black-identifying audience members,’ as evidence of discriminatory practices. The administration’s actions align with a broader goal to curb what it sees as ‘woke’ ideology in higher education, a priority Trump emphasized during his 2023 campaign speeches in Florida.

Implications for Higher Education

The Trump administration’s focus on Harvard signals a broader strategy to reshape American universities. Education Secretary Linda McMahon, when asked about the IRS’s plans, said it was ‘worth looking into,’ particularly for elite schools with large endowments. The administration has already canceled $11 billion in federal grants across several colleges since Trump took office, targeting institutions accused of tolerating antisemitism or liberal bias.

Harvard’s resistance has inspired other universities, with some faculty groups and the American Association of University Professors filing lawsuits against the administration’s funding cuts. However, the administration remains steadfast, with Trump stating that Harvard’s actions were a ‘disgrace’ and hinting at further scrutiny for other nonprofits.