Harvard University has received its largest donation in a history of hefty gifts, as hedge fund manager John Paulson gave the college an eye-popping $400 million on Wednesday.
The gift is targeted at Harvard’s school of engineering, and in return Harvard has announced that it will be renaming the school the John A. Paulson School of Engineering and Applied Sciences. Ironically, Paulson himself has never studied engineering, instead getting a finance degree at New York University followed by an MBA at Harvard Business School.
The windfall for Harvard eclipses a record set just last year by investor Gerald Chan, who gave $350 million to the School of Public Health, which was also subsequently named for him.
The $400 million price tag for a school name represents some inflation from what it used to cost for Harvard to rename something. Back in 1638, the recently-founded New College changed its name to Harvard College after English clergyman John Harvard bequeathed the school 779 pounds and a 400-book library.
The giving has already sparked criticism from those who point out that, as far as charitable cases go, Harvard is perhaps the world’s least needy. It’s $36.4 billion endowment is already the largest of any university on the planet by about $10 billion. To put that figure in perspective, that’s more money than than the gross domestic product of about 100 different countries, including Haiti, Afghanistan and the Democratic Republic of the Congo– an impoverished, war-torn land of over 77 million people.
Despite possessing this huge sum, Harvard still has some of the world’s highest tuition, with annual costs exceeding $60,000. While the school offers generous grants to those from families earning under $65,000 a year, aid tails off significantly beyond that point, and a family earning $200,000 can expect over a third of its after-tax earnings to be going to Harvard’s coffers.
Paulson’s decision to add to Harvard’s riches has sent some off the deep end. Journalist and nonfiction writer Malcolm Gladwell became particularly incensed at the gift, going on an eight-tweet tirade against the school– something that is notable because he has tweeted less than 150 total times since joining Twitter in 2008.
It came down to helping the poor or giving the world's richest university $400 mil it doesn't need. Wise choice John! http://t.co/2bFmuTy397
— Gladwell (@Gladwell) June 3, 2015
Paulson to Harvard: is there a way to give back without actually giving anything back?
— Gladwell (@Gladwell) June 3, 2015
Paulson’s gift is hardly worthy of being singled out for its excess, however, as huge donations to already-wealthy schools have become more and more common in recent years. Cornell and Johns Hopkins have both landed $350 million gifts in recent years, and Yale saw a $250 million donation. The largest gift of all time remains a 2001 donation to Caltech of $600 million.
Wealthy colleges aren’t just raising more money than ever. They’re also seeing their fortunes race ahead of smaller and poorer schools. The 40 wealthiest schools in the U.S. hold two-thirds of all cash and investments possessed by the country’s colleges, and their growth of 50 percent since 2009 easily outpaces the growth in assets of poorer schools that are otherwise financially stable.
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