The concentration of mega-gifts at the top has very perverse impacts.
Harvard built a $100M building a few years ago that is used by a total of 100 people a year.
Philanthropy combines prestige, PR, and “legacy” in a way that massively overvalued those three vs. any kind of measurable impact.
The alternative you are suggesting is badly, badly needed in the non-profit world.
But the “brand” game has won vs the execution game, esp. in higher Ed.
Edit: link: https://www.henselphelps.com/project/chen-neuroscience-resea...
* Tribalism: Humans like people who "are like them", it's easier to relate. Thus, IME, Stanford grads prefer other Stanford-branded people. Or at least crême de la creme Ivy. Especially compared to the plebs and the proles.
* Vanity: Donors find it appealing that the structure will be around for a long time, prominently and proudly emblazoned with the donor's own name. Yes, external validation does feel good. Especially among certain (insecure) types. A truly altruistic and self-assured person makes donations anonymously.
Empire building is a popular pastime among the human species, especially those with power. The rest of us settle for something like Civ, SimCity, or sand castles.
In general I wish people spent more time looking at alternatives when these huge projects are proposed. For instance, it drives me nuts thinking of all the alternatives when I see making bids to pay billions for the Olympics. That's the kind of money that could turn the whole area into a science Mecca in several different, with a whole host of positive downstream effects locally.
Which building is that? Not doubting you, just curious.
I can remember seeing this in action at Stanford. Companies will fall over themselves and pay anything to have their name associated with absolutely anything that has the name Stanford on it. And the students know this, so they play the game. Every student group, organization, club, etc. no matter how small or meaningless is heavily sponsored by relevant corporate donors as a result.
Academic institutions are also tax-exempt, therefore don't pay any tax on the profits of any endowment or real-estate investment gains. The rise of the ivy-league schools becoming glorified tax-free holding companies, with education side-gigs, corresponds with the bloat in academic administration.
https://observer.com/2006/05/nyu-columbia-make-a-mint-on-rea...
https://www.huffpost.com/entry/higher-ed-administrators-grow...
Why? For tax purposes.
Upon first hearing this I was shocked and disappointed. Over time I've lowered my hopes and expectations, and come to accept it for what it is:
Old, elite, uber-wealthy white men at the top, who want it to stay that way.
https://www.google.com/search?q=Stanford+president
https://en.m.wikipedia.org/wiki/File:Marc_Tessier-Lavigne_at...
References:
"The Stanford Empire", by Mercury News
> Stanford's vast holdings. Stanford, Silicon Valley's largest property owner, controls more than 5,000 acres in Palo Alto and unincorporated Santa Clara County. On that land are the university's sprawling campus, a shopping center, tech offices, apartment buildings and entire residential neighborhoods.
> The value of Stanford’s empire is larger than those of Google, Apple and Intel combined.
https://extras.mercurynews.com/whoowns/stanford.html
"How Stanford Came to Dominate the Landscape in Silicon Valley", by KQED
> The value of Stanford's real estate empire is greater than the holdings of Google, Apple and Cisco combined.
https://www.kqed.org/news/11781771/how-stanford-became-the-l...
What a waste.
This seems to apply here.
Universities have degenerated somewhat into being professional sports teams and professional fundraisers.
"Attracting top talent" is nonsense, universities are already full of people so desperate for positions they work nearly for free.
If I had a billion dollars I'd build a university out the best equipment, the cheapest buildings, and a minimum wage for anyone doing academic work of $100k and see how far that got me.
Which building is this?
Gross.
That podcast episode:
https://omny.fm/shows/revisionist-history/my-little-hundred-...
I found a partial transcript of the episode:
https://www.simonsays.ai/blog/my-little-hundred-million-with...
In biology, the median 100th-ranked university professor is making incredibly incremental contributions (like applying a well known technique to the 300th gene). The average top university professor is making groundbreaking achievements.
I almost view it as the opposite -- if you gave the Watson and Crick lab (back in its heyday) $100, much more real impactful science would result compared to giving 100 me-too scientists $1.
In programming, if everyone would "just" be good enough, everyone could the elusive 10x programmer. In research, even if everyone would be the equivalent of the 10x programmer, there is simply often a lot of "boring" work to be done, such as what you dismissed as incredibly incremental contribution, to prepare the foundation for the next breakthrough. That means that "10x researchers" could, for various reasons including luck, end up in the 100th percentile because they have chosen a field that is not yet ready for a breakthrough (think, e.g. ML researchers slogging through the AI winter, wo didn't stick with ML until hardware became fast enough). Being the person making the groundbraking achievements means standing "on the shoulder of giants" as someone said a few centuries ago.
I wouldn't be surprised if today there are more "10x researchers" out there than there are breakthroughs waiting to be made.
Anyways, 100 more Nature-level articles about climate change is not going to change the situation if there is no political will (or if it seesaws every 4-8 years at best).
But, if you donate $1.1 billion to an eligible charity (and claim to have gotten nothing in return), then the US government basically pretends that you never made that money, and your tax bill goes down by roughly your marginal tax rate times the size of the donation. There are limits and caveats, but in general, it's a pretty fair treatment. I'm pretty sure big donors generally under-report the value of having their name on a building, etc. However, I believe it's nearly impossible to wind up with more money in your pocket post-tax by donating cash instead of keeping the cash. (I'm not an accountant. This isn't tax advice.)
I'm not saying you in particular are claiming people are donating cash out of greed, but the way I hear some people talk about tax write-offs is very misleading. It seems many Americans believe that donating $1.1 billion in cash can result in a $1.1 billion reduction in tax owed (assuming a marginal tax rate under 100%). Presumably, someone that wealthy gets their marginal tax rate down around the long-term capital gains rate, so they're probably getting about $165 million in tax reduction in exchange for that $1.1 billion donation. (Again, I'm not an accountant. This isn't tax advice.)
(Now, one could buy $1 million in art, get it appraised for $4 million, and if your marginal tax rate is under 25%, get more than $1 million knocked off your tax bill. Like I said, there are some loopholes in valuation, but not for cash and marketable securities.)
That being said, it would be nice to see something where getting your name on a building or an event in your honor would come with some automatic accounting assumption that the value of the publicity is worth at least 25% of the donation. If you want the full write-off, take your name off the building.
I think it's highly unfair in that it shifts decisions on social spending from the democratically made decisions of the people to a few wealthy individuals.
For an alternative way of looking at things - almost any economist would tell you that it is wise to tax negative externalities and subsidize positive externalities. This is one of the most foundational insights from microeconomics. And charitable giving is the closest to an ideal positive externality that you will find. Person spends money to a cause because it makes him feel good to do so. That transaction ends up helping other 3rd parties as well. Textbook positive externality.
https://www.economicshelp.org/micro-economic-essays/marketfa...
There's no reason to think the non-profit accomplishes anything or doesn't accomplish negative things. And there is an opportunity cost to the non-profit getting that money rather than, for example, schools.
You could say the exact same thing about how the federal government spends its money.
> And there is an opportunity cost to the non-profit getting that money rather than, for example, schools.
There's also an opportunity cost to the government getting that money, rather than, for example, educational non-profits.
Overall, do I think the federal government would do more good with the same amount of money? Probably. But would the federal government do more good with $0.16B, as opposed to the non-profit sector with $1.1B? I highly doubt it.
To the degree that it's possible to amass wealth in this country without having to coerce people (a la crony capitalism), the money from those few wealthy individuals are a time-delayed, indirect sum of the democratically-made decisions of the people to spend their hard-earned dollars on the products and services those wealth individuals have offered.
Philosophically, it's not all that different from the people's will being indirectly expressed via their elected representatives in government.
I dont really know where to start.
There are circumstances where you cant get your name on a building from a donation, there are circumstances that circumvent that requirement. There are circumstances where there is no tax deduction because the donation already occurred from another non profit.
These wealthy people are going to run circles around the the general understanding for another 100 years. Bite the bullet and pay a nonprofit lawyer to understand whats possible.
There are things you can do with asset valuations it just isnt that relevant
I'm honestly curious what the loopholes would be.
However, rich people set up their own 501(c)(3) organizations to which they are boards of to get free flights, hotels, meals, etc from. Basically, instead of spending that money directly, they "spend" it via donations to their 501c3, and their 501c3 sends them on trips
they donate to their own 501c3, and that 501c3 can donate to the next thing that makes the actual headlines. But the important thing for the conversations had here is that their own 501c3 can also invest and grow money. It can have lots and lots of capital firepower. When it uses that, there is no tax deduction for the owner. And in an article or headline, there is no information to extrapolate whether they were motivated by a tax deduction. thats my main point.
From my perspective, People are so desperate to find an issue with a large money movement that it is clouding their ability to understand what to even look at whether there is an abuse, advantage or not.
The flaw with this logic is assuming the money came from their personal balance sheet this year, as opposed to growing in a tax deferred or tax exempt account for decades already
Even Mackenzie Bezos’ donations are not giving her current year tax deductions (some additional ones could, its just not what she's been doing and she's been doing a lot and her methods are very common)
the understanding of what ultrawealthy are doing and why is very far from reality. I think its not productive to grasp for a tax/financial ulterior motive
It probably would have been much better to plant $1B worth of trees, or buy $1B of the Brazilian Rain Forest. But for similar reasons that Robert Moses loved bridges and hated tunnels, putting your name on a building at Stanford wins.
All the political will does nothing without research. We need both.
Absent data, it's difficult to say. There are economies of scale, even if just in experience administering such projects.
https://www.collegefactual.com/colleges/stanford-university/...
https://www.collegefactual.com/colleges/university-of-califo...
Post here when each of you who are concerned have shown your concern through your own action.
Read the first three paragraphs, and then you won't be able to stop.
During undergrad, the benefits are plenty. Brand name, excellent on-campus recruitment, bright and/or highly driven peer students, valuable networking opportunities, challenging coursework if you want it.
But with that said, taking Calc 1 at most elite schools isn't too different from taking calc 1 at some random school way down the (ranking) list. The syllabus will be the same, quality of your lecturer could go either way. At the undergrad level, there's really not much as far as "cutting edge" goes - after all, you're there to learn the fundamentals.
I'd say that it is at the research level that you'll start to see real payoffs. Mostly because these schools tend to attract top talent in the different fields, and have the funds to pay for them. And there's a pipeline between elite academia, and elite private (industry) research groups.