So how did these endowments get so big? Well, they would like you to believe it`s just because they`re so prestigious. Oh, we`re Harvard, you know. 

"The Real Story" is it`s because they`re run like a business, a tax- free business. Earlier this month, a company made an offer to take over a California lumber company. It has over 200,000 acres of forest. 

The company? Harvard Management Company. What do they do? Oh, yeah, they run the school`s $35 billion endowment fund. 

What the hell is a school doing running a timber company? It`s a tax- free school. Good question. Unfortunately, it`s the wrong one. The question you should be asking is what schools like Harvard are doing with all of the billions of tax-free money they have been stockpiling. 

In 2007, schools with large endowments like Harvard and Yale spent an average of just 4.4 percent of it. Meanwhile, they earned an average of over 19 percent on that money. And it`s not like these schools are funneling all the extra cash into the communities -- oh, look at us helping the poor.

No, no, no. Harvard voluntarily gives Boston about $1.8 million a year. Wow. That`s great, until you figure out and realize that that`s an embarrassing .005 percent of their fund`s value. 

The result is that some of these cities these schools basically own, like New Haven, Connecticut, are dying. New Haven is one of the top 10 poorest cities in the country. And the fact that Yale University, the biggest tenant -- go and find a building in New Haven that`s not owned by Yale -- uses the city services -- hey, call the fire department.

They use all the resources and they pay virtually nothing in property tax. So the city is in this giant hole and nobody`s there to dig them out of it. 

So what should happen? Should we tax them? You`re damn right we should. 

Quite honestly, I`m not in favor of giving our government even more money for them to waste. But this is a business. If we don`t tax them, we should at least make them spend the same minimum five percent that foundations, private foundations, are forced to. Bill and Melinda Gates, their foundation, they have got to spend five percent if they want to keep their tax-free status. 

And we should absolutely stop giving these undercover timber-buying hedge funds any more subsidies or handouts. They have more money to invest right now than the entire federal government could even dream of because we don`t have an endowment and our lock boxes are all empty. 

Richard Wolff is an economic professor at the University of Massachusetts. 

Richard, you and I were talking just a little while ago. I mean, they get these tax breaks. Why should they? They`re businesses. 

RICHARD WOLFF, ECONOMICS PROFESSOR, UNIVERSITY OF MASSACHUSETTS: Yes, it`s always been a mystery to me ever since I started looking into it, that many years ago, the idea was you`d give a tax break to Yale and Harvard because they began as schools that trained ministers for local churches. So the local community gave them a benefit, no tax, because the local community got a benefit in return, namely ministers to preach. 

Now they`re multibillion-dollar corporations, they mainly service people that have nothing to do, for example, with New Haven. They don`t come from New Haven, they don`t return to New Haven. 

It`s a patent absurdity to give them a tax break that means that the city of New Haven, one of the 10 poorest, as you pointed out, in the world -- or in the United States, excuse me -- ends up having to tax all the poor people of New Haven to pay for the delivery of free public services to Yale University, one of the richest universities in the world. It`s Robin Hood in reverse. 

BECK: OK. But they`ll say that they provide things like hospital -- Yale New Haven Hospital, one of the best hospitals in the world. That`s what they`ll say. That`s their contribution to the city. 

WOLFF: Right. But first of all, most of the patients that go to Yale New Haven Hospital come from outside the city of New Haven. So if there was any kind of rational plan to have people who benefit pay the cost, then there would have to be some sharing of that responsibility. Nobody does that. 

Number two, if Yale paid the same rate of taxation that everybody else in New Haven, every poor family in New Haven pays, the amount of money the city would earn each year from Yale would allow them to run their own hospital and still have plenty of money left over to take care of the needs of the city of New Haven. Really, the running of that hospital is about the same thing as the statistic you pointed out of .005 percent.

Yale is getting away with not paying its fair share for the services the city delivers to them. And the same is true of the state and the federal government. 

BECK: You know, here`s the thing, Richard -- by the way, you teach at U Mass? 

WOLFF: Yes, I do. 

BECK: I think you`re a professor I would dig. 

You listen to these universities, and they preach about socialism and how bad capitalism is, then they engage in obscene capitalism and try to preach to us that that`s not a profit, that`s an endowment. And then they come back for a second dip into the kitty and have us pay for tuition. 

WOLFF: Right. One of the things that most amazed me was when I discovered that the largest single source of income each year at Yale University over the last 30 years has not been tuition, room and board, has not been gifts from rich people, it`s been money from the federal government. 

When anybody does research at Yale, they submit a budget. The federal government gives them the money to do the research and then lops on an additional amount to help defray the costs of maintaining Yale University. 

BECK: Unbelievable. Richard...

WOLFF: So not only do they not pay the taxes, but then they get the money we all pay in taxes as a way to build up the income and wealth of the university. 

BECK: That`s "The Real Story" tonight. You can read more about the college endowment funds and how they represent the world`s largest and incredible tax break. Check out the column I wrote for CNN today by visiting cnn.com/glenn. 

Coming up, a terrifying crime in Cleveland leaves a 41-year-old man dead. Gun control advocates love to talk about guns causing crime. Could a gun have prevented this crime? The NRA`s Wayne LaPierre joins me next."

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