Thursday, February 20, 2014

Putting Harvard’s Big Gift in Context

Putting Harvard’s Big Gift in Context

If the median household in the United States donated $2,600 to their alma mater, I doubt it would rate a mention in The New York Times[1] or The Wall Street Journal.[2]  Of course, a donation of this size would be incredibly generous because the median family has a net worth of only $75,000, is probably carrying a mortgage, and hasn’t built an adequate retirement nest egg. 

Hedge fund manager Kenneth C. Griffith, founder of Citadel Investment Group, just donated $150 million to his alma mater Harvard. This is the largest single gift to Harvard, which already enjoys a $32.7 billion endowment. Mr. Griffith has an estimated net worth of $4.4 billion, so his donation is the equivalent of a $2,600 donation by the median family.

According to Deal Book, Mr. Griffin made $900 million in 2012[3] and most certainly had a bigger pay package in 2013.  In short, he can easily afford this gift on top of all his other charitable activities.  While Mr. Griffin's donation is large in dollar terms, it is neither hugely generous nor well targeted.  It's simply the extremely wealthy donating to the extremely well-endowed.



[1] http://dealbook.nytimes.com/2014/02/19/hedge-fund-manager-griffin-to-donate-150-million-to-harvard/
[2] http://online.wsj.com/news/articles/SB10001424052702304914204579393760228156396?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304914204579393760228156396.html
[3] http://dealbook.nytimes.com/2013/04/15/pay-stretching-to-10-figures/

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