News out of San Antonio yet again reminds us that one of the drivers behind the ongoing higher education fundraising boom is surging donor interest in what I humbly call “destination philanthropy.”
The gift in question is a $15 million pledge from local business leader and philanthropist Graham Weston to support the University of Texas at San Antonio’s (UTSA) proposed School of Data Science. It sounds innocuous enough until you realize how the gift fits into a far bigger picture.
The School of Data is a significant component in UTSA’s phased, 10-year approach to accelerating the development of its downtown campus as “a destination for producing highly skilled professionals in big data and analytics, advancing economic development in the urban core, and creating prosperity for San Antonio.”
Nor is this gift a shot in the dark for Weston. As the co-founder and former chairman and CEO of web hosting and cloud computing provider Rackspace, Weston has helped to transform downtown San Antonio into a thriving urban center replete with a robust tech ecosystem. That’s a big deal for a city that was previously well off the beaten path and hardly associated with cutting-edge economic development.
Bottom line? For donors like Weston, it is no longer sufficient simply to cut a check for the construction of a building and call it a day. Instead, we’re seeing a spike in gifts that plug into what UTSA President Taylor Eighmy called a “government-university-industry partnership” for the economic transformation of a neighborhood, if not an entire city, with a university as the nexus point.
I’ll examine some equally compelling “destination gifts” in a moment. But first, let’s take a closer look at UTSA’s ambitious plan and the donor supporting it.
An “Interdisciplinary Approach”
In early September, the University of Texas System Board of Regents approved a $70 million Permanent University Fund allocation for the School of Data Science and National Security Collaboration Center.
The center, according to the school, will propel its “interdisciplinary approach to cybersecurity, big data, cloud computing, machine learning, and artificial intelligence.” By locating the school in the heart of San Antonio’s high-tech corridor, UTSA will provide “access to faculty experts, cutting edge research and well-trained students.”
Once approved by UT System Regents and the Texas Higher Education Coordinating Board, the School of Data Science will align its work closely with the National Security Collaboration Center, the state’s largest hub for government, university, and industry partners in the cybersecurity field.
UTSA is currently working with the city and Bexar County for the transfer of downtown parcels of land, valued at $13 million, to the university. Those parcels would be the sites for the new school, a National Security Collaboration Center, and for the relocation of the UTSA College of Business.
A Cloud Computing Pioneer
Graham Weston was raised on a ranch near San Antonio. After graduating from Texas A&M with a degree in agricultural economics, he went into real estate. In 1998, he provided seed capital to launch Rackspace, a web-hosting startup developed by three college students.
Six months later, he put his real estate business on hold to act as CEO until 2006.
While he was CEO, Rackspace grew from 12 to 1200 employees and from $1 million to $200 million in annualized revenue. Weston was worth more than $1.5 billion on paper at Rackspace’s peak price.
In 2016, Rackspace, increasingly squeezed as giants like Amazon and Microsoft muscled into the cloud computing space, was acquired and taken private by New York private equity firm Apollo Global Management LLC in a deal valued at $4.3 billion.
The deal, according to MySanAntonio, “made Weston rich, but not as wealthy as he once was.” He walked away with approximately $606 million in cash and stepped down as chairman.
Revitalizing Downtown San Antonio
Weston’s transition toward a “more informal supporter” of Rackspace allowed him to focus on reinvigorating San Antonio’s urban center. “I’m focused on, how do we make San Antonio a place my—our—children want to move home to?” he said in 2016.
He helped launch former Mayor Julián Castro’s SA2020 initiative, which aims to “transform San Antonio into a world-class city by the year 2020,” while his real estate development firm, Weston Urban, is working with Frost Bank to build San Antonio’s first new downtown office tower in more than 25 years.
Weston’s interest in cultivating San Antonio’s tech scene was inspired by a Rackspace employee who complained that the city didn’t have a strong tech community or vibrant atmosphere for young people.
“For Rackspace’s whole history, we struggled to recruit young people,” he said. “If you don’t have kids, San Antonio just does not have a good value proposition. Today having urban experience in San Antonio, I think, is a must.”
So Weston co-founded Geekdom, which provides a co-working space downtown, along with mentorship and funding for tech startups. Graham also founded the 80/20 Foundation, which invests in programs to encourage entrepreneurship, technology education, and development in downtown San Antonio.
In fact, way back in 2013, the foundation’s biggest grant was aimed at helping UTSA bolster its cloud computing efforts. “UTSA is about to be a world leader in open cloud computing,” said Executive Director Lorenzo Gomez, foreshadowing Weston’s more recent gift.
Weston’s efforts over the past decade have paid dividends.
“I think there’s been so much progress in the last couple of years; today, we have literally hundreds and hundreds of people who have joined the startup community,” Weston said in an interview last year. “That’s supported by lawyers and photographers and videographers, and all the professionals that support them.”
But don’t just take his word for it.
In March, the leadership and supporters of the Youth Orchestras of San Antonio honored Weston for his philanthropy and urban development work. “It’s rare for an individual to stand up and actually transform a city, but that is exactly what Graham Weston has done,” Bexar County Judge Nelson Wolff told the audience.
(This isn’t to say Weston has forgotten about his alma mater. In 2015, he donated an undisclosed amount to fund the Weston Sales EQ Program, which will offer a minor degree in sales to Texas A&M’s Department of Agricultural Economics.)
A “Destination Philanthropy” Boom
Weston’s gift follows a series of equally bold “destination philanthropy” gifts, including Philip and Nancy Anschutz’s $120 million gift to the University of Colorado Anschutz Medical Campus, Rex and Jeanne Sinquefield’s $50 million gift to St. Louis University, and T. Denny Sanford’s support for the construction of the Madison Cyber Labs at Dakota State University in South Dakota.
The first two gifts aim to transform recipient institutions into nationally renowned medical and science research destinations. Sanford’s gift will help to “create a new economic development cluster which will attract high paying jobs, give former students the ability to 'come home,' create cutting-edge companies, and grow our state’s economy,” said South Dakota Governor Dennis Daugaard.
Like UTSA’s project, the latter two efforts lean heavily on “government-university-industry partnerships.” SLU has joined forces with local healthcare provider SSM Health, which plans to invest $500 million to build a new university hospital and ambulatory care center, while Madison Cyber Labs works closely with the NSA, DHS, and the U.S. National Science Foundation.
But the similarities don’t end there.
Each of these gifts, plus Weston’s, were made to institutions far from familiar coastal enclaves, underscoring that surging regional philanthropy in areas like the Southwest is reshaping the larger philanthropic landscape. There are more rich people than ever, they're spread out all across the country, and they're giving back to hometown institutions at “big city” levels.
Consider corroborating evidence in Graham Weston’s own backyard. Roughly three years ago, Texas movie theater mogul John L. Santikos left a $605 million gift that tripled the size of the San Antonio Area Foundation. Around the same time, UTSA successfully wrapped up its first-ever capital campaign, We Are UTSA—A Top-Tier Campaign. Launched in 2009, its initial goal was $120 million to support student scholarships, faculty and research initiatives, campus activities, and community outreach programs. In early 2013, UTSA surpassed that goal and, with two years left in the campaign, set and exceeded a new goal of $175 million by $5 million.
As for its 10-year campus redevelopment effort, combined with Weston’s gift and an additional $5 million in university funds, the university has now secured the $90 million needed to fully advance its two major construction projects.
One final similarity in the Anschutz, Sinquefield, Sanford, and Weston “destination" gifts? Each of the donors are highly successful entrepreneur types looking to generate a significant return on investment. I suspect they find the possibility of supporting a higher ed institution while economically revitalizing a city irresistible.
Commenting on his UTSA gift, Weston boldly proclaimed: “The School of Data Science will bring thousands of the most innovative students, faculty and researchers together and will accelerate everything else in our downtown tech ecosystem.
“UTSA is building the best data science program in the world.”