STERN: Rethinking Johnson’s gift

A Stern Perspective

Last Sunday, President Peter Salovey announced one of the most extraordinary gifts in Yale history. Charles B. Johnson ’54, a billionaire investor from California, gave a mind-blowing $250 million to support the two new residential colleges. This gift was, to be sure, a remarkably generous act from a remarkable man.

scott_stern_headshot_peter_tianYet even as I thank and praise Johnson, I find myself disconcerted by the response to his gift. The story I keep hearing seems too easy. I have always been taught — by some of the best professors in the world, no less — to challenge simple, one-sided narratives. Like everything else, Johnson’s donation deserves deeper scrutiny.

For more than half a century, Charles Johnson ran Franklin Resources, a mutual fund that has more than $815 billion in assets. Worth somewhere between $4 and $6 billion, Johnson is listed on the Class of 1954 website as “our class’s only billionaire.” Even before his record-setting gift last week, Johnson had given millions of dollars to Yale.

But Johnson’s financial support for education is not so simple. He was the largest single donor in the movement opposing California’s Proposition 30, which would raise income taxes on the mega-rich like Johnson by 3 percent, leaving taxes unchanged for most Californians (along with raising sales tax by a quarter of a percent). The revenue generated by the slight tax increase was needed to fund state colleges and universities. The easy premise that Johnson is simply a generous individual is more complicated than it seems.

Unqualified praise further obscures the fact that this donation was also part of a larger, and potentially disturbing, trend. In the last couple decades, the largest donators to education went from nonprofit institutions to privately funded foundations. Education, public and private, is increasingly funded by billionaire philanthropists such as the Gates and Walton families.

While few are denying the generosity of these individuals, their influence is extremely troubling. The rise of private philanthropy in education is the rise of very few people having an inordinately loud voice in setting policy. The Gates Foundation, for instance, has no public accountability at all and has a specific political agenda; the Foundation opposes teacher tenure and strongly supports charter schools. Because of the massive amounts of money given, these positions tend to become increasingly adopted by both the public and policymakers, including by the Obama administration. Thus, a very few well-heeled individuals steer national policy. And as the gap between the poor and the uber-wealthy gets larger and larger, fewer and fewer people will have a say.

The fact that no one has any check on how these billionaire philanthropists spend their money has generated many skeptics, even when the philanthropy is undeniably generous. When a Filipino businessman named Fred Uytengsu gave $8 million to the University of Southern California, his praises were widely sung. Yet a few critics raised the idea that Uytengsu lives in the Philippines, and, while USC has an endowment of $3.5 billion, the best Filipino schools have endowments closer to $8 or $10 million. Wouldn’t Uytengsu’s money have meant more closer to his home? It is, of course, Uytengsu’s money to do with what he wants, but it is also worth pausing just a moment to consider the consequences of this philanthropic-educational complex.

Uytengsu’s donation and countless others like it are part of a trend in which the big money in education is concentrated at the very top. From 2011 to 2012, half of all donations from philanthropists to British universities went to just Oxford and Cambridge. In the United States as well, the big stories of philanthropy in education were concentrated at schools that already have tons of money. Places like Yale receive hundreds of millions of dollars a year, while schools with smaller endowments receive fewer and less noteworthy donations.

It is, then, possible to see Johnson as a single exceptionally wealthy man trying to steer an educational institution already flush with money. Johnson never asked Yale students if they wanted him to spend $250 million on the new residential colleges. In fact, the only times Yale students were ever asked about the new residential colleges, they openly detested the idea. When the new colleges were being debated in 2007 and 2008, two polls were conducted that found that about half of all students opposed them, while only a quarter or less supported the expansion. Faculty, too, vocally opposed the new colleges.

So while we praise Johnson for his generosity, we should also note that his money allows him to wield unusual power in concretizing a policy so many Yalies oppose. Big philanthropy and Yale are so firmly enmeshed that we embrace names like Harkness, Bass, Sterling — and now Johnson — without thinking enough about who they are, what motivates them and the startling power they hold over us.

Scott Stern is a junior in Branford College. Contact him at scott.stern@yale.edu.

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