Although Harvard is widely known as one of America's oldest and most prestigious colleges, that public image is outdated. Over the last couple of decades, the university has transformed itself into one of the world's largest hedge-funds, with the huge profits of its aggressively managed $36 billion portfolio shielded from taxes because of the educational institution it continues to run as a charity off to one side.

The numbers tell the story. These days Harvard's 6,600 undergraduates are charged annual tuition of $44,000 per year, with substantial reductions for students from less wealthy families. So student tuition probably contributes much less than $200 million to Harvard's annual revenue. Meanwhile, the hedge-fund side of Harvard's operations last year generated a $5 billion return, an amount at least 25 times larger. If all of Harvard's college students disappeared tomorrow, or attended classes without paying a dime, the financial impact on Harvard, Inc. would be completely negligible.