Sunday thoughts: The $500m Simons family — what can we learn from the culture of mega philanthropy in US higher education?

Jonathan Simons
7 min readJun 4, 2023
https://fortune.com/2023/06/01/jim-simons-hedge-fund-donation-stony-brook-university-suny/

Never have I been so disappointed to scour the American branch of my family tree and discover it doesn’t flower that way.

Jim Simons — sadly — I mean really sadly — no relation, has just announced the largest ever unrestricted gift to a US university in history: $500m to Stony Brook University, a public university in New York State where he studied.

This follows hot on the heels of fellow hedge funder Ken Griffin giving $300m to Harvard, making his total donations to the university also around $500m.

And if these sums aren’t mind blowing enough, it turns out that there’s some even bigger. In fact, according to one source, there’s been more than ten donations to US universities of $500m or over (though unlike the Simons donation, they’re restricted). The largest single donation is $1.8bn, made by Michael Bloomberg to Johns Hopkins in 2018. In total, he has given more than $3.5bn to that institution.

Normally, one of five reactions happen at this point. Sometimes, there’s applause for that level of philanthropy. Sometimes, there’s a much more cynical “what do they want for it”. Some people actively dislike it, finding it unseemly, and arguing that no one should have that much money in the first place. A fourth reaction is to say how that money is being wasted, given the majority of US institutions who receive that money are already very wealthy. And a fifth reaction is “why can’t the UK — and specifically UK universities — be anywhere near as good as this”. After all, even rich UK donors sometimes prefer the US. For example, a couple called *checks notes* Akshata Murthy and Rishi Sunak gave at least $3m to one of their US alma maters, while “only” (only) giving £100k to Winchester College in the UK.

The truth is that actually the UK, in comparison, does ok. Data from CASE (The Council for Advancement and Support of Education — the most comprehensive and reliable assessment of philanthropy in education) shows that in 2022, the US higher education sector received a total of $59.5bn. The UK sector received $1.5bn. But given the UK reports data from 84 institutions compared to 781 in the US, we have 36m graduates compared to 139m in the US, and we have around one tenth as many millionaires (2.8m compared to 25.5m) and around a fifth as many billionaires (177 compared to 724), there is some context to the figures.

It is true that on all of those metrics, the US reports higher figures per university, per graduate, or per high net worth individual. But the US has long been seen as having something of an exceptional culture of giving and of philanthropy. CASE does a really nice bubble chart (below) which shows size of fundraising teams among different groups of universities in UK, Australia and New Zealand, and Canada, compared to average new gift received, and largest gift received. What CASE call the “established” grouping in the UK — some of the most secure and well known fundraising operations, but excluding the biggest fundraisers — actually score ahead of the trend line (orange bubble), and the “moderate” and “developing” UK unis are more or less on a par with their counterparts in the rest of ANZAC.

https://www.case.org/system/files/media/inline/CASE-Ross_Report_2021-22.pdf page 38

It’s also true that the UK has significantly ramped up its advancement operations in recent years — both because of an increased need given the levelling off of state funding for tuition, and because of more lessons learned from the US and an interchange of staff. Total funds reported by CASE going to UK universities have increased from £380m to £1.49bn between 2005 and 2022 — a 392% rise, against an overall inflation rate in the economy of 91% over the same period (which admittedly is not the same as income growth over the period, especially at the higher end). Institutions such as Imperial College London have raised donations eleven fold since 2013 (from £5m to £55m), and Bristol has trebled between 2018 to 22 (from £9m to £29m).

https://www.case.org/system/files/media/inline/CASE-Ross_Report_2021-22.pdf p36

What is most significant about philanthropy in the UK — and also the US — is how uneven it is. The chart below shows the average amount raised over the last few years by universities in each of the categories that CASE create. This relates to their maturity as fundraisers, and every university that reports data has been clustered by CASE into one of these six groupings. There are 2 ‘elite’ universities, 10 ‘established’, 29 ‘moderate’, 17 ‘developing’, 19 ‘emerging’, and 11 ‘fragile’. Institutions can move from year to year. And although CASE doesn’t say who is in which category, I think we can probably take an educated case as to who forms the elite grouping. And if you strip that out, the picture looks much flatter.

https://www.case.org/system/files/media/inline/CASE-Ross_Report_2021-22.pdf p36

There’s not a similar cluster analysis in the US data, but they do show that the 20 institutions who raised the most (3% of reporting institutions) raised $15bn — 26.4% of the overall total. So as with the UK, mega donations at the top end are skewing the overall results.

The difference between the US and UK scale of advancement seems to mostly deliver two things. One is additional research funding, which makes up the single biggest proportion of US gifts given to support ongoing expenditure. And the other is student financial aid — in other words, scholarships and maintenance to allow more students to come to these institutions for free. Financial aid makes up almost half of all donations made to a university’s endowment — and is often the purpose of mega donations, such as Bloomberg’s to Johns Hopkins and the Simons family.

https://www.case.org/system/files/media/inline/VSE%202022%20Key%20Findings.pdf p8

Looking across just private US universities — not state colleges, just the group which includes the most famous and highest price institutions, but also the ones that receive the most philanthropy — we can see that over on average, over half of the sticker price of admission is discounted for undergraduates. This is made up of straight up tuition discount, plus additional financial aid given to certain students meaning their net outlay is less — all made possible by this additional philanthropic income.

Obviously, this skews towards those with less family wealth, but around 90% of all students at private universities received some form of private financial aid from their institution on top of the normal set of federal and state loans and grants. For some of the wealthiest private institutions, such as Harvard, 1 in 5 students pays nothing to attend.

My conclusion from all of this is somewhere between answers 1 and 4 above. I think it’s admirable that there’s so much philanthropy in the US — even if a lot of it skews towards already very wealthy institutions, and may be linked to increased chances of donors’ children getting in to those institutions. I actually think the UK is performing pretty well in comparison — not in absolute, but in relative terms — and certainly when you compare to other countries that aren’t the US.

But I suspect in five to ten years time, even if the average UK philanthropy to universities continues to rise, the discrepancy within the sector will still be present — or maybe even be growing. And that to me is the issue that needs addressing. I would never tell elite institutions that they shouldn’t fundraise, or that donors shouldn’t donate to those institutions but should instead spread gifts around more widely. Arguably, whether in research funding terms, or admissions terms, there are greater bangs for bucks donating to established and research intensive (and wealthier) institutions.

But if one of the single biggest benefits that US elite institutions gain from fundraising is the ability to widen access, then we need to do the same. This means two things. For all students, as I’ve argued before, an absolute priority on maintenance support which allows them to live and thrive at any institution with sufficient money in their pocket to pay rent, eat, heat, and have an enjoyable time. Labour’s seeming commitment to a wider reintroduction of grants is key to this.

But it also means institutions that do receive significant philanthropy going well beyond their OfS benchmarks nd funding commitments on access work. It means spending this windfall on their institution, and on partnerships with others, at the same time. It means having an ambition that something approaching 90% of their students can receive additional financial support to that which the Student Loans Company will offer.

I expect Harvard to do more than the average US university in terms of outreach and financial aid. I expect top private schools in the UK to do more than the median in terms of bursaries and partnership work. We should expect as standard— as indeed some already do — a significantly greater than average level of outreach and support from the wealthiest UK universities as well.

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