Their principal is not intended to be spent, ever. The point of an endowment is not to "provide stability during trying times".
The point is to spend the interest that it generates, in normal times, in perpetuity. Which Harvard already does and has always done. Interest from their endowment is already a large part of their revenue. That's what the endowment is for.
Returns fluctuate wildly, while expenses are roughly constant. So obviously expenses are drawn conservatively. And if investment works well, you can grow the endowment too. Obviously it is up to the university to strike the right balance.
The more it grows, the less risk there is in the future. But if you start spending it more than the levels of its average returns, that's high risk. And the point is it's supposed to last forever.
You also need to grow it simply to account for inflation and other rising costs.
Their principal is not intended to be spent, ever. The point of an endowment is not to "provide stability during trying times".
The point is to spend the interest that it generates, in normal times, in perpetuity. Which Harvard already does and has always done. Interest from their endowment is already a large part of their revenue. That's what the endowment is for.