Harvard is 'considering the sale of $1.65 billon debt' just two months after former President Claudine Gay's ouster as billionaire alum Bill Ackman suggests 'dramatic decline in donations' to blame

Harvard University is considering putting $1.65 billion worth of bonds on sale after gifts from wealthy donors dried up in the wake of the anti-Semitism row that cost its president her job.

The move was spotted by billionaire alum Bill Ackman who predicted the college would have to slash spending after its richest benefactors axed more than $1 billion in donations.

Its president Claudine Gay resigned in January after Ackman accused her of allowing anti-Semitism to 'explode' on campus in the wake of the October 7 attack on Israel.

But the university remains mired in claims that its promotion of diversity, equity and inclusion (DEI) programs foster a climate of anti-Jewish prejudice and Ackman warned that donors 'won't be coming back for some time.'

'At a minimum, alumni will want to know who the next president is, and the status of DEI and antisemitism on campus before resuming donations,' the hedge fund boss tweeted.

Harvard alum Bill Ackman, who helped marshal a billionaire boycott in the wake of the anti-Semitism row spotted the college's bid to get its finances back on track   

Former Harvard President Claudine Gay resigned last month amid fury at her handling of anti-Semitism allegations on campus and her disastrous testimony to Congress

'At a minimum, alumni will want to know who the next president is, and the status of DEI and antisemitism on campus before resuming donations.'

On Tuesday, the college registered its plan to sell $750 million of taxable fixed-rate bonds the week of March 4 and $900 million of tax-exempt bonds in April.

The Massachusetts university has an AAA credit rating and is the richest college in the world with a total endowment of some $50 billion, larger than the economies of 120 countries.

But most of its assets are tied up in property, venture capital and long-term investments, and donations covered 45 percent of revenue spending in 2023, leaving it vulnerable to a cash flow squeeze.

And Republican lawmakers have threatened to target the college's federal funding which makes up another 11 per cent of its spending.

'Like most endowments Harvard models expectations of fund distributions when considering its liquidity,' Ackman wrote.

'Harvard also makes assumptions about inflows from alumni donations.

'The model likely did not predict a decline in liquidity events from private equity, real estate, and venture capital and the dramatic decline in donations.

Protests against Israel have rocked the Massachusetts campus since the Hamas attack 

Thirty-one student organizations signed a letter blaming Israel alone for the October 7 attack

The university is thought to have lost more than $1 billion of donations in response 

'That is likely why Harvard announced this recent bond offering, which is being done in a substantially higher interest rate environment than a couple of years ago.'

Ackman, who is himself Jewish, has donated tens of millions of dollars to the college that taught him in the 1980s but called on his fellow billionaires to turn off the taps in October.

Len Blavatnik, whose family foundation has given the Ivy League at least $270 million, halted donations citing 'rampant anti-Semitism on campus,' and Leslie Wexner, the former CEO of L Brands - the parent company of Victoria's Secret also joined the boycott.

Israeli billionaire Idan Ofer and his wife Batia removed support over Ms Gay's muted response to a letter signed by 31 student organizations blaming Israel for the Hamas attack.

'President Gay's failures have led to billions of dollars of cancelled, paused, and withdrawn donations to the university,' Ackman wrote in December.

'I am personally aware of more than a billion dollars of terminated donations from a small group of Harvard's most generous Jewish and non-Jewish alumni,' he added.

Ms Gay, the first black woman to head the Ivy League college, resigned in January following a disastrous Congressional hearing at which she was unable to say whether calls for genocide would constitute harassment.

University of Pennsylvania President Liz Magill also resigned after hedge fund manager Ross Stevens threatened to withdraw a $100 million donation in light of her testimony to the same committee.

Last week, a faculty organization claiming to support Palestine posted an anti-Semitic cartoon to Instagram depicting a Jewish person hanging black and Arab men.

And earlier this week, the Harvard Jewish Alumni Alliance announced plans to audit the university's course offerings to root out what they believe is causing anti-Semitism to fester at the Ivy League.

'There are entire Harvard courses and programs and events that are premised on anti-Semitic lies,' claimed Dana Horn, a Harvard graduate who served on an anti-Semitism advisory board organized by former President Gay.

Billionaire couples Leslie & Abigail Wexner, and Len and Emily Blavatnik are among who put a halt on donations to the college 

More details of Harvard's finances may be revealed if Harvard goes ahead with its proposed bond sale next month.

'It would be interesting to understand how much the modeled cash flows have declined since original expectations,' Ackman wrote.

'I wouldn't be surprised to see Harvard announce a substantial cost reduction program soon.

'I suspect that alumni donations won't be coming back for some time.'