Chicago area native Jonathan Gray was reportedly a candidate for Treasury Secretary in the new Trump Administration, though Goldman veteran Steve Mnuchin ultimately secured the position. Gray is the global head of real estate at the Blackstone Group, and we've written about his philanthropy before. Gray and his wife Mindy move their charitable contributions through the Gray Foundation, which appears to be recently minted.
The couple's growing philanthropy strongly emphasizes health, and the Grays established the Basser Research Center at UPenn. The motivations here are personal, as Mindy's older sister passed away from ovarian cancer when she was in her 40s. Away from UPenn, the Grays also focus on New York City, particularly on youth and education organizations. Gray is on the board of directors of Harlem Village Academies, and via their foundation, the couple has recently supported places like Prep for Prep, Inner-City Scholarship Fund, Schools That Can, Year Up, and Breakthrough New York, a nonprofit that works with low-income students to prepare them for college and graduation.
Academic readiness and success seems to be a strong interest of the Grays, who also support Schools That Can, whose goal is to "is to unite leaders to expand quality urban education and close the opportunity and skills gap."
- Jonathan Gray
- Why Is This Private Equity Billionaire Helping Build Charter Schools in Harlem?
- Why This Billionaire Couple Cares About the Genetic Basis of Cancer
All in all, this is a pretty familiar set of interests for yet another active philanthropic couple emerging from finance. Medical research and urban education are big magnets for today's new donors, with gifts often going to well-established institutions with long track records. So we were intrigued to learn that the Grays are venturing into riskier terrain, making the kind of risky big bet that everyone wants to see more of in philanthropy right now. (Everyone, that is, except top universities and other blue chip nonprofits that count on the complacency of cautious funders to fill their coffers ever higher.)
Last month, the Grays gave $10 million toward a new college savings pilot program to increase the number of low-income New York children who go on to attend college. The program will be overseen by NYC Kids Rise, a newly minted public-private partnership that also involves Mayor Bill de Blasio and Commissioner Julie Menin. The so-called Child Savings Account (CSA) initiative aims to help thousands of New York City public school children save for college. The first phase will fund accounts for 10,000 children over three years.
We've written before about CSAs, which hold great potential to expand opportunity. According to the Center for Social Development, a low- or moderate-income child with a college savings account of up to $500 is more than three times more likely to enroll in college than a child with no savings account. With $500 or more in savings, that same child is five times more likely to graduate from college than a child with no savings account. That's some serious leverage potential, the kind that tends to excite donors. Still, the kind of funders we've typically seen getting behind CSAs are mainstream foundations. Mott has been a key player in this space, as we've reported. Not many individual donors have popped up around CSAs.
- At the Mott Foundation, A Persistent Evangelist for Children's Savings Accounts
- A Funder's Interesting New Effort to Help Families Save for College
On the other hand, quite a few such donors have been interested in guaranteeing that poorer kids can go to college and priming them early with the knowledge their tuition will be paid if they're qualified to enroll in a postsecondary institution. For example, we've reported on George Weiss's ambitious efforts in this regard by bankrolling Say Yes to Education. So it was probably only a matter of time before more donors discovered the power of CSAs to redirect young lives along these same lines.
The new Gray-bankrolled program will work as follows: Each year, the families of some 3,500 New York City children will receive an initial $100, to be deposited into a 529 college savings account, and will be eligible to receive another $200 over four years if the family meets certain criteria, such as saving small amounts of their own money. As The New York Times notes, if these families do not add funds to their CSA account, the child’s account would be worth about $475 after a dozen years. That will sound like small change to some readers with kids working to save the tens of thousands of dollars that a college education now costs per year at many institutions. But remember, the psychological effects here are huge: Just knowing there's a stash of money for one's education can make a big impression on how kids see their lives unfolding.
It's worth mentioning that these kinds of programs in cities are very new. San Francisco has created a savings account for every kindergartner in the city’s public schools since 2012, and every baby born in Maine automatically receives a $500 college scholarship from the Alfond Scholarship Foundation.
In New York City, more than 800,000 residents don't have bank accounts, so a program like this could also be a way to get families in touch with critical institutions while encouraging college savings. As Gray puts it, "I love the idea of democratizing the benefits of long-term investing. If we get a lot of takeup... and we have a lot of families saving money, investing, opening up these 529 accounts, that, to me and to us, would be a sign of real success.”
Ultimately, though, it will be quite a few years before the Grays know whether their money made a decisive difference in the lives of a significant number of kids, which is the way the best philanthropy often goes. When you properly deploy what Warren Buffett has called "society's risk capital," you'll rarely be able to say for sure what the return will be.