Back when I attended Harvard University, one of the odder graduation requirements I faced was a mandatory swim test. We were told the demand was a legacy of Eleanor Widener, who had donated the school’s main library in honour of her son, class of 1907, who drowned on the Titanic.
The story turns out be apocryphal, but we believed it. Our lives were shaped by the hands of dead donors. We slept and ate in halls built to realise Edward Harkness’s dream of replicating Oxford in America. We took classes in a science building funded by Polaroid camera inventor Edwin Land, that resembled his creation. We even swam the required 50 yards in a pool named after donor John Blodgett.
Since then the influence of plutocrats on US universities has only grown and it is expanding to the UK. This week, Blackstone boss Steve Schwarzman gave £150m to Oxford university not long after quant investor David Harding handed £100m to Cambridge.
Given how much money has been concentrated at the top of our societies in recent years, it is very good news that some billionaires are starting to give back. Mr Schwarzman’s donation set a modern-era record for Oxford, but it doesn’t even make the top 50 on the list of global gifts compiled by the Chronicle of Higher Education, dwarfed by the $1.8bn that Michael Bloomberg gave to Johns Hopkins in 2018. It isn’t even Mr Schwarzman’s biggest outlay: he gave $350m to Massachusetts Institute of Technology last year.
In this, the private equity titan is following in the footsteps of the robber barons whose 19th and 20th-century donations helped transform higher education institutions as far-flung as Chicago and Makerere in Uganda. Many research universities are great today thanks to the munificence of the Rockefellers, Carnegies and Vanderbilts of yesteryear.
But with big cheques come big dangers and hard choices. Alumni loyalty and a desire to set the agenda means that donated money clusters at universities that are already well funded and serve the elite. Giving often exacerbates inequality rather than easing it. Business schools are invariably better endowed than teachers’ colleges. And Harvard has $39bn, 60 times as much as Howard, the US’s best-funded historically black university.
Some big donors are trying to solve the problem by targeting poor students rather than endowing buildings. Mr Bloomberg’s donation will allow Johns Hopkins to admit students without regard to ability to pay, meeting their financial needs in full with grants rather than loans. Robert Smith, another private equity billionaire, recently promised to pay off the loans of the entire graduating class at Morehouse College. Hong Kong tycoon Li Ka-shing is funding the entire incoming class at Shantou University in Guangdong province.
But most donors want something concrete to point to: a building, a programme or a professorship in a pet subject. In some cases, they want their children to be admitted, which perpetuates the unfairness. Mr Schwarzman is shelling out for MIT’s new Schwarzman College of Computing and a new humanities hub and an institute on artificial intelligence at Oxford.
Most university administrators believe they can direct donations into things that they already want. But how useful will some of this stuff be in 20, 30 or 60 years? We should remember the experience of Philadelphia’s Barnes Foundation, which ended up going to court to break restrictions put in place by its founder in 1922.
Critics worry whether we should be letting business moguls shape our intellectual agenda. Tech entrepreneur Martha Lane Fox objected to the Oxford gift on Twitter this week, saying that the money should be used for climate crisis work. “Something is broken with these models of philanthropy,” she told me. “The greatest challenge of our time is whether we will have a planet in a decade. That’s where we have got to be focusing our attention.”
We should not forget the wider backdrop. Many universities are desperate for donations in part because of government cuts to higher education funding. And those governments are cash-strapped precisely because many companies and billionaires do everything in their power to cut their tax bills.
Mr Schwarzman is a particularly vocal defender of the “carried interest” tax break that enriches companies like his. And don’t forget, many of these donations are tax deductible. So we are all helping to pay to put Mr Schwarzman’s name in lights at Oxford. Perhaps it would be fairer if he paid more tax.
brooke.masters@ft.com
Letter in response to this column:
Private donations spur academic competition for excellence / From Robert Rosenkranz, New York, NY, US
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