In the short span of a decade, Stephen Schwarzman ’69, through donations of $100 million or more, has imprinted his name on landmarks — such as the New York Public Library’s flagship building — and a high-profile scholarship at Tsinghua University modeled on the Rhodes Scholarship.
The full force of Schwarzman’s philanthropy has now extended to Yale. Following Schwarzman’s $150 million gift to the University to renovate Commons and Memorial Hall into a cultural hub for campus life, Yale honored Schwarzman by removing the former blue sign that said “Commons” and replacing it with one bearing Schwarzman’s name.
“I think the idea behind replacing the old blue signs that used to say ‘Commons’ with ‘Schwarzman Center’ is to get people excited about what’s coming,” said University President Peter Salovey.
But the months following the announcement, campus debate has spread far beyond the blueprints for the project, with attention now being directed to the man behind the second-largest gift in University history, a private-equity magnate who made $690 million last year alone.
In an interview with the News following the announcement of the donation in May, Schwarzman described why Commons carried a sentimental significance during his time at Yale.
“When I got to Yale in 1965, I actually knew no one … I didn’t know one undergraduate, one graduate student or one professor,” Schwarzman said. “So I thought the building, itself, was beautiful and I liked sitting at those tables, but I didn’t have anybody at the table to sit with, and in a way, that was a very difficult transition.”
Prior to his arrival at Yale, Schwarzman grew up in suburban Pennsylvania, attending public schools and assisting his family with their drapery and linen business. During his time at the University, Schwarzman mainly studied social sciences, but later attended Harvard Business School, graduating in 1972.
In business, Schwarzman — who founded the Blackstone Group, a private equity giant, in 1985 — does not tread lightly. He is known for making big bets and tirelessly promoting his firm. In many ways, little has changed since his time at Yale.
“Steve was a Davenport dynamo,” said R. Thomas Herman ’68, who also lived in Davenport in the late 1960s and currently teaches a Yale college seminar. “Steve was a very impressive self-starter. He was constantly organizing fun events on campus. He is fiercely loyal to his old friends. He is a true mensch.”
Brian Dowling ’69, who was a member of the Skull & Bones society with Schwarzman, described him as someone who had ample self-confidence. He added that Schwarzman had a great sense of humor and as a student, was deeply interested in taking advantage of the opportunities Yale afforded him.
In regards to the renaming of Commons as the Schwarzman Center, Dowling felt it was a fitting tribute given his generosity.
“It was a great space but it was underutilized. I think it will be greatly utilized now, sort of becoming the center of campus — both geographically and functionally,” he said. “Almost every building has a name on it, so why not honor the people who made the buildings possible?”
Following Harvard Business School, Schwarzman worked for the now-defunct investment bank Lehman Brothers, where he eventually led the mergers and acquisitions department. In 1985, he founded Blackstone, which brought in revenues of over $7 billion in 2014.
Yale School of Management Professor and Senior Associate Dean for Leadership Programs Jeffrey Sonnenfeld, who grew up a few blocks from Schwarzman and attended the same high school, described Schwarzman’s financial success as a product of “his own courage, conviction and vision.”
“Steve Schwarzman is a unique combination of the American iconic business leader,” Sonnenfeld wrote in an email. “He represents the finest of the quintessential established pillars of finance and industry, yet has the self-made American Dream origins.”
Sonnenfeld noted that after being conceived in 1985 with $400,000 in assets and two employees, since the 2007 IPO, Blackstone has seen its assets rise from $102 billion to a staggering $303 billion, with profits reaching $3.4 billion. Sonnenfeld added that Schwarzman’s success “will be a lasting source of Yale pride, national enthusiasm and global admiration.”
But not everyone on campus finds pride in Schwarzman’s financial record. In the wake of the gift, many members of the Yale community criticized the University for their decision to rename Commons after Schwarzman, taking issue with the source of his money for the donation. A few days after the gift was announced, an article was posted on the popular campus Facebook group “Overheard at Yale” about the Blackstone Group and its alleged exploitation of the foreclosure crisis.
The article, which was published in November of 2013 on Occupy.com — an online platform for the Occupy Wall Street movement — focuses on companies that bought large numbers of foreclosed houses at cheap prices during the crisis, only to then rent them back out to the 10 million individuals who were evicted from their homes during the crisis.
The article argued that since the “buying frenzy” began, the Blackstone Group bought more houses than any other company. Using a subsidiary business, the article went on, Blackstone got hold of houses in foreclosure auctions, through local brokers and in bulk purchases — all with remarkable nonchalance.
Still, Sonnenfeld defended Schwarzman’s commercial and philanthropic efforts.
“While his businesses are responsible for employment of 700,000 people, Blackstone’s business conduct has been exemplary in legal and ethical standards,” Sonnenfeld said. “Moreover, [Schwarzman’s] personal philanthropy leading the John [F.] Kennedy Center for the Performing Arts, the New York Public Library’s flagship building, the Schwarzman Fellows institution with China’s Tsinghua University and now his generous gift to Yale University approach $1 billion, and those are only a few of his philanthropic missions.”
However, Hannah Schmitt ’18 challenged the notion of Schwarzman’s donation being viewed as philanthropy.
“What really matters to me is that Schwarzman had this money and chose to donate it to an institution that is not only extraordinarily rich and powerful, but also too often occupies itself in service to the rich and powerful,” she said. “This is not philanthropy; it is cycling money among by and large privileged people who can certainly survive without a student union.”
Tyler Blackmon ’16, a staff columnist for the News who was active in the online debate on the topic, said that issues such as this emphasize the need for the University to come up with an objective policy about renaming important buildings on campus.
“Where was the ‘open conversation’ about nixing the name Commons from one of Yale’s most important buildings?” Blackmon asked. “If students set up a Kickstarter campaign, how much money would we have to raise for it to be enough for Yale to nix the name Calhoun College? The double standard here is disappointing but certainly not shocking. Money speaks at Yale. Students speak at Yale. The only difference is one of them is heard.”
Alexandra Esnouf ’17 predicted that a debate similar to the one that has emerged in Calhoun will take place on campus regarding the naming of the Schwarzman Center, particularly because the center is being envisioned as a central space for undergraduates, graduate students and professional students to gather.
Still, several students acknowledged that Schwarzman has made a hefty contribution to the University warranting recognition.
Yale should take steps to recognize individuals who have made significant contributions to the University, said Benjamin Marrow ’17. He added that although he believes the money could have been better used elsewhere, he has no issue with Yale recognizing and commending Schwarzman’s contribution by renaming Commons after him.