MIT, Harvard use legal loophole to limit lawsuit payouts despite billion-dollar endowments
Harvard and MIT, despite their massive endowments, have used a Massachusetts law to cap lawsuit payouts at $20,000 by claiming charitable immunity.
Critics argue this allows wealthy universities to avoid significant legal accountability while continuing to receive taxpayer funds.
Two of the wealthiest universities in the United States have repeatedly used a Massachusetts law to shield themselves from significant legal payouts, potentially avoiding financial accountability for serious misconduct.
Harvard University and the Massachusetts Institute of Technology (MIT) boast endowments of approximately $53 billion and $24.6 billion, respectively. Yet both institutions have cited a state law that caps tort liability for charities at just $20,000—even when alleged harms would otherwise warrant far higher damages, according to The Daily Caller.
Under Massachusetts law, as long as an organization is “furthering its charitable mission,” it qualifies for the cap. The only exemption is for medical malpractice cases, according to Spada Law Group.
“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,” State Sen. Carmine Gentile said. “But if they get hit by a Harvard University truck, with a $50 billion endowment, they’re not going to get squat.”
“Caps on lawsuits mean universities can break the law with a smirk, knowing the worst they’ll face is a minor fine they’ll pay with your tax dollars,” added higher education expert Isaiah Hankel, according to The Daily Caller.
Both Harvard and MIT have invoked the charitable cap defense in legal proceedings. In 2021, MIT used the rule in a case involving alleged scientific fraud. In 2024, Harvard cited the law while defending itself against a lawsuit alleging it mishandled a sexual harassment incident.
In April, the Trump administration froze $2.2 billion in federal grants to Harvard, citing the university’s failure to address rising antisemitism and its continued investment in controversial Diversity, Equity, and Inclusion (DEI) initiatives.
“The disruption of learning that has plagued campuses in recent years is unacceptable. The harassment of Jewish students is intolerable,” the Federal Task Force to Combat Anti-Semitism said in a statement. “It is time for elite universities to take the problem seriously and commit to meaningful change if they wish to continue receiving taxpayer support.”
In May, President Trump doubled down, announcing on Truth Social his plan to revoke Harvard’s tax-exempt status. “It’s what they deserve!” he wrote.
Campus Reform has contacted Harvard University and the Massachusetts Institute of Technology for comment. This article will be updated accordingly.
