WASHINGTON (SBG)— Small businesses across the country are still struggling, even after funding meant to keep them afloat ran out. This, while large companies and institutions are getting millions in aid from the $2.2 trillion CARES Act.
Shake Shack CEO Randy Garutti announced Sunday the company is returning the $10 million it received through the Paycheck Protection Program.
“It was very clear that the program was underfunded and it wasn’t set up for everyone to win," Garutti told CNN. “By returning our $10 million, that $10 million now can go back into the pot, can go to the people that deserve it and we hope can go inspire the next round.”
Another large institution that got federal money is handling its aid differently.
Harvard University, which has a nearly $40 billion endowment, got $8.6 million through the CARES Act's Higher Education Emergency Relief Fund.
Harvard was among thousands of American colleges and universities which benefited from the $14 billion fund, which requires schools to spend half the money on direct aid to students and the other half on costs brought on by the coronavirus pandemic.
In a statement to Sinclair, Harvard said it's giving 100% of the $8.6 million directly to its students based on need.
This financial assistance will be on top of the significant support the University has already provided to students – including assistance with travel, providing direct aid for living expenses to those with need, and supporting students’ transition to online education," the statement said.
While the amount allocated to each school was based largely on its number of students who qualify for Pell Grants and overall enrollment, some say schools like Harvard should have dipped into its endowment before accepting this federal aid.
“Companies across the country are going to savings to get by through these tough times and I think Harvard could do the same," Eduardo Neret, a reporter for conservative watchdog Campus Reform said.
Endowments are typically dedicated to specific projects or causes, like new buildings or research. Schools are legally required to spent money on the intention of the donor or grand. Doing otherwise could get an institution sued.
Paul Weinstein Jr., a senior fellow at Progressive Policy Institute and director of the Master of Arts in Public Management at Johns Hopkins University, said Congress could act to give schools protection to use endowment money for emergency aid purposes.
Weinstein said schools with these large endowments should follow in the steps of Shake Shack.
“There are a lot more schools that are in greater need, and so I think the so called ‘big boys’ of education, those with endowments over a billion dollars actually need to step up and be a little more sacrificing," Weinstein said.
Neret suggests schools like Harvard get permission from its board of trustees to use endowment money instead of emergency federal aid.
"We are in unprecedented times," Neret said. "There are businesses, companies across the country that are having to do things they never thought they would have to do and I think universities should realize that and should try to approach it in the same way.”
Ultimately, the responsibility of making sure funds are sent to institutions with the greatest need falls on the Department of Education.
“I would put this at the feet of the department and say, where are your criteria?" Weinstein said. "How are you doing this? What’s your rationale for your handing out this money or are you just sort of handing this out you know, left and right?”