As one of the country’s leading centers of economic scholarship and research, the Wharton School of the University of Philadelphia is a magnet for donor dollars given its long list of accomplished alumni who made their millions (and billions) in the fields of business and finance.
The list includes hedge fund manager Larry Robbins, real estate developer Jeff Sutton, cosmetics executive William Lauder, and financier Marc Rowan and his wife Carol, who recently committed $50 million to support Wharton’s efforts to attract and retain “world-leading faculty.”
Rowan graduated Summa Cum Laude from Wharton with a BS and an MBA in finance. He went on to co-found the private equity behemoth Apollo Global Management along with Leon Black and Wharton undergrad alumnus Joshua Harris. With a net worth of $3.1 billion, Rowan currently serves as Apollo’s senior managing director.
The Rowans move their giving through the Rowan Family Foundation, which the couple established in 2005. Areas of focus include educational outlets like Say Yes to Education and Girls Who Code, Jewish causes like the Hebrew Charter School and the Western Wall Heritage Foundation, health outfits like Mt. Sinai and the Crohn's & Colitis Foundation of America, and New York City-based organizations.
The Rowans’s support for various causes at Wharton and Penn dates back to 1984 and includes undergraduate and MBA financial aid, capital projects, the Dean’s fund, Wharton Customer Analytics, the Wharton Fund, the Institute of Contemporary Art, the football program, Penn Medicine’s Basser Center for BRCA, and Penn Medicine’s Orphan Disease Center.
Rowan is the chair of Wharton’s Board of Overseers, a Penn Trustee, and co-chair of Wharton’s $1 billion “More than Ever” fundraising campaign, which is part of Penn’s larger $4.1 billion capital campaign.
A portion of the Rowans’ $50 million gift will also support the Penn Wharton Budget Model, a project to measure and publish “evidence-based” assessments of government taxes, programs and proposals.
Add it all up, and the Rowans’ gift falls squarely in “mega-gift” territory, further corroborating the fact that massive alumni gifts are often preceded by a series of smaller ones. Moreover, the gift coincides with a noticeable uptick in the Rowans’ giving—a trend we first called attention to back in 2015.
Bankrolling “Academic Firepower”
Wharton will use the Rowans’ gift to recruit three Rowan Distinguished Professors who are “global leaders in their fields, who will inspire faculty and students alike, and who will build bridges between academia and business.” The gift will also support the appointment of a select number of Rowan Fellows for five-year terms to recognize and support Wharton’s “most distinguished faculty in their commitment to innovative research and teaching.”
I was particularly struck by corresponding copy from Wharton’s media relations department. “The Rowans’ gift,” the email read, “will be used to help Wharton compete for the most talented business school professors as the battle for academic firepower rages on.”
This sentence hits on a very timely and important issue facing higher ed donors. According to Robert Kelchen, a professor at Seton Hall University's Department of Education, universities want to attract a "fairly small pool of students who are “high-achieving and high-income.” One way to do so is by recruiting what Wharton’s media relations department calls “superstar” professors and providing them with game-changing support.
At the same time, “higher education has not been a growth industry, with federal research cutbacks and the number of college-age students down,” said Mitchell Moss, professor of urban policy and planning at NYU. “Schools are seeking students overseas, and yes, relying on non-tenure track faculty. There has been an effort to emulate sports franchises with its superstar culture, and law firms who bring in rainmakers.”
Donors often endorse this strategy. Michael Bloomberg famously gave Johns Hopkins University $350 million to fund new faculty positions in public health and interdisciplinary problem solving, prompting the Baltimore Sun to frame the gift as means to “lure star professors” to the school.
Paul Allen gave $40 million to the University of Washington (UW) prior to his death to establish the Paul G. Allen School of Computer Science and Engineering. According to UW’s Ed Lazowska, the money will help the school compete with MIT, Carnegie Mellon, Stanford and Berkeley for faculty firepower and top-tier students. “The goal here is, instead of there being a Top 4 program, to be a Top 5 program, and for us to be the fifth,” Lazowska said.
The Hellen Diller Foundation gave the University of California San Francisco a staggering $500 million gift, a fifth of which will create distinguished professorships replete with the kinds of salaries and perks that can lure star faculty from other institutions. Another $100 million will establish the Helen Diller Faculty Scholars program supporting early- and mid-career scientists with at least $150,000 annually. (The foundation added another $500 million to UCSF’s coffers earlier this year.)
Regional donors are getting in on the act, as well. Earlier this year, Saint Louis University received a $50 million gift—the largest gift in the school’s 200-year history—from area philanthropists Rex and Jeanne Sinquefield to create a new fund to finance faculty research and hire new professors with the goal of increasing the school's standing nationally while benefiting the surrounding region.
There are, of course, some concerns with this approach.
In the absence of asking students point-blank if the presence of a “superstar” professor affected his or her decision to attend a school, it’s hard to show quantifiable benefits of such acquisitions. The same can also be said about the effect such professors have on enhancing a school’s “prestige.”
What’s more, the term “superstar” can be a relative one. It may mean an expert in a given field who is unknown to the general public. Or it may mean a “CelebriProf” like General David Petraeus. Here, the lines become a bit blurred.
When Petraeus joined USC’s faculty a few years back, an article in the school’s paper declared, “Rather than using the funds to help current professors, or grant scholarships to deserving minority students, the administration decides to allocate a great deal to attract celebrity professors.” Things only got worse when Petraeus was offered six figures to teach a single course at CUNY. (He declined.)
All that being said, donors like the Rowans, as we have seen, aren’t all that worried. Wharton is competing against heavyweights like the University of Chicago Booth School of Business, Harvard, Stanford and their cadre of deep-pocketed alumni donors. They’ve concluded that a “world-leading” institution requires “world-leading” faculty. It’s as simple as that.
“Inspiring Wharton faculty who were committed to cutting-edge business education were catalysts for my success,” Marc Rowan said. “Carolyn and I are honored to join the vision of the Wharton community to bring the school’s outstanding students face to face with the most important thinkers of our time.
“As top Wharton researchers advance and shape their fields, they transform the lives of their students, preparing them to make a difference in the business world and beyond.”