Harvard and hedge fund tycoon hammered for $400 million donation

WASHINGTON (TIP): The world’s wealthiest university just added $400 million to it kitty by way of the largest donation in its history, but the gift from a hedge fund tycoon is being shredded by critics who see it as a rich man’s selfish gesture to a spoilt school.

“If billionaires don’t step up, Harvard will soon be down to its last $30 billion,” was one of the many snarky tweets by Malcolm Gladwell, the outlier writer, as news broke on Wednesday that hoary Harvard, already the richest school in the world with a $36 billion endowment (greater than the GDP of 100 countries), was the recipient of the massive contribution, the biggest in its 379-year history.

The donor was hedge-fund honcho John Paulson who made his fortune betting on the housing market collapse, and who was an alumnus of Harvard Business School in 1980.

“Next up for John Paulson: volunteering at the Hermes store on Madison Avenue. Let’s make this a truly world class retail outlet!” Gladwell sneered, as the philanthropic world weighed the gesture and rival schools and those less fortunately looked on enviously. “It came down to helping the poor or giving the world’s richest university $400 mil it doesn’t need. Wise choice, John!” Gladwell added.

Other critics piled on to Harvard and other elite universities (such as Yale and Cornell) that have in recent years been the beneficiaries of large donations from billionaires (including some from India). even as lesser-known schools catering to poorer students have languished. According to a survey by Moody’s Investor Services, the 10 richest institutions in the US held nearly a third of total cash and investments in fiscal 2014, while the top 40 accounted for nearly 60 per cent.

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Indian billionaires such as Anand Mahindra and Ratan Tata are among those who have contributed in recent years to their Ivy League alma mater. Mahindra, a HBS 1981MBA, gave Harvard $10 million to support a Humanities Center that was renamed the Mahindra Humanities Center in honor of his mother, Indira Mahindra.

But critics charge that many philanthropic gestures to Ivy League schools have as much to do with the giver’s ego as their sense of altruism. “If you slap your name on a college campus in return for a pile of cash, your act of charity is, by definition, not very modest,” argued a Slate columnist in a commentary headlined “Billionaire’s Ego Donates $400 Million to Harvard.”

“Harvard is already America’s richest university, with an endowment of $36 billion … by any reasonable measure, the school does not strictly need more money, especially compared to the financially strapped colleges that typically educate lower-income students,” the writer maintained.

But Paulson shot back, reminding FT in an interview that far from an elite background, he went to public schools in New York City and then to Harvard on a scholarship. “I am very grateful for the financial support that I got. The money is going to be used largely for financial aid and scholarships; I know how expensive it is to go to university. It will also go to research that is going to be beneficial and impactful to all humanity,” he said.

Paulson’s $400 million will go primarily to Harvard’s lesser-known engineering school, whose Dean at one time was the Indian academic Venky Narayanmurthi. Among the school’s alumni are former Microsoft chief executive Steve Ballmer and Bill Gates (before he dropped out).

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