Kenneth Griffin Is Giving Harvard $150 Million and It's a Terrible Idea

Moneybox
A blog about business and economics.
Feb. 20 2014 9:13 AM

Please Stop Giving Giant Donations to Rich Universities

98954201-statue-of-john-harvard-is-seen-on-may-10-2010-in-harvard
Moar money please!

Photo by Darren McCollester/Getty Images

Kenneth Griffin went to Harvard. Then he got rich running a hedge fund called Citadel. Now he's giving $150 million of that fortune to Harvard, which I think is a terrible idea.

Let's think about it this way. I don't have Kenneth Griffin money, so I can't give anyone $150 million. But let's say I was feeling inspired to give someone $1,500 tomorrow. Who should I give it to? That's a difficult question to answer. Should I give it to Kenneth Griffin? Nope! That's a really easy question to answer. You don't give extra money to Kenneth Griffin because Kenneth Griffin is already really rich.

And guess what: Harvard is already really rich.

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But of course while Kenneth Griffin is rich, he's not the richest man in the world. Harvard is the Bill Gates of universities, not the Kenneth Griffin. Harvard's $32 billion endowment is about 50 percent larger than Yale's. Don't get me wrong, giving money to Yale is ridiculous. But giving money to Harvard is doubly ridiculous. And note that when it comes to these fancy universities the official endowment figures are a drastic understatement of the real wealth of the university. Harvard's real-estate assets are mind-bogglingly valuable, for example, but not part of the endowment.

At any rate, in the scheme of misguided donations to Harvard this one seems not-so-awful. It's mostly for financial aid, which is nice. But really you would almost certainly do more good with this money by picking 1,500 people at random and mailing them each a check for $100,000. I will as usual tout GiveDirectly where your money goes to desperately poor rural Kenyans as a great use of your charitable dollar. But really it's child's play to think of a better use of $150 million than to give it to the richest university on the planet.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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