Another Big Gift for Economic Diversity at an Elite School. Will It Make Any Difference?


Michael Bloomberg’s $1.8 billion gift to Johns Hopkins has triggered some lively debate around the most effective way for elite universities to attract and enroll low- to middle-income students. Recent developments out of New Jersey suggest that this challenge isn’t a new one, nor is Bloomberg’s strategy of earmarking funds solely for financial aid the only compelling course of action available to donors.

Princeton University’s strategic framework, adopted by the board in 2016, called for the expansion of the undergraduate student body by 125 students per class in an effort to “admit more talented students from every sector of society,” according to president Christopher L. Eisgruber.

These new students have to live somewhere. Enter billionaire businessman, investor, and philanthropist Ron Perelman and his daughter Debra, Chief Executive Officer and President of Revlon Inc.

His Perelman Family Foundation made a $65 million commitment to establish a new residential college at Princeton University that will, to quote Perelman, help Princeton “create a more diverse and inclusive campus. People of all backgrounds and communities deserve access to the extraordinary education and training offered by Princeton and all the wonderful opportunities afforded its graduates. The creation of Perelman College will help fulfill Princeton’s mission to create a more culturally and economically diverse community.”

I’ll take a closer look at Princeton’s move to diversify its student population and how it fits into the larger narrative around accessibility to elite universities in a moment. But first, a quick review of Perelman’s philanthropy is in order.

All in the Family

Ron Perelman is the Chairman and CEO of holding company MacAndrews & Forbes and one of the “100 Greatest Living Business Minds” according to Forbes. For more than 20 years, he has been at the forefront of philanthropy, particularly when it comes to funding cancer research and treatment.

Education, as one would suspect, is also a big funding area. In 1995, the Perelman Family Foundation gave Princeton $5 million to create the Ronald O. Perelman Institute for Judaic Studies.

In 2013, Perelman pledged $25 million to establish the Ronald O. Perelman Center for Political Science and Economics at his alma mater Penn, and $100 million to the Columbia Business School in New York, where he has been on the board since 1994, to develop a new center to train future business leaders and promote innovation.

With a net worth $9.1 billion, Perelman is the 49th richest person in the world. He was also an early signatory of the Giving Pledge.

Earlier this year, Perelman’s daughter Debra was appointed Chief Executive Officer of Revlon, where Ron, who bought the company in 1985, is the chairman and largest investor. She was previously Revlon’s chief operating officer and had been an executive vice president at MacAndrews & Forbes. 

Debra studied history at Princeton where she spent her first two years at Rockefeller College. Writing in Forbes, Susan Adams said the Perelman’s Princeton gift “stands out because it means a prominent woman is putting a stamp on a residential college at an Ivy League school, where buildings tend to be named for men.” Debra joins former eBay executive Meg Whitman, who in 2017 gave $30 million to Princeton, which named Whitman College after her. The new residential college will also be the first at Princeton named after a Jewish person.

A “More Diverse” Campus

By cutting a check to fund the construction of a new complex, Perlman’s gift comes on the heels of some other big capital projects earmarked for the “residential experience.” In January, Vanderbilt announced a $600 million capital project that calls for replacing aging residence halls with “innovative residential colleges” over the next five years. 

Residential colleges “are really there to anchor your experience within Princeton,” Debra told Bloomberg News. The smaller student communities “really drive connections, to have an understanding of the people around you as well as your fit in the world. Princeton helped instill values and ethics I still use today.”

In many ways, the foundation’s $65 million gift to Princeton is simply a textbook capital project gift. Princeton is expanding its undergraduate population. It needs new facilities. A donor writes a check. Life goes on. But by linking its expansion to creating a more diverse campus community, the school has aligned itself with elite schools’ prevailing mandate to boost accessibility and mobility.

It’s an issue that Ivy League universities have been grappling with for a while. Michael Bloomberg has provided consistent support for the American Talent Initiative and College Point, two programs that seek to expand the number of high-achieving, low- and moderate-income students in the nation’s most prestigious public and private colleges.

Last year, Brown University launched a $120 million campaign, dubbed the Brown Promise, to drop all loans from financial aid packages awarded to their undergraduates. By doing so, Brown became the 16th U.S. institution at the time—and the sixth in the Ivy League (excluding Cornell and Dartmouth)—to offer all of its undergraduates a loan-free education.

Stanford, Harvard, and Yale are free for students whose parents’ combined income falls below a given financial threshold. And as far as Princeton is concerned, financial aid covered 100 percent of tuition, room and board for students in the most recent freshman class whose families earned up to $65,000. Princeton was also the first university in the country to eliminate loans from its financial aid package.

A Different Approach

Elite schools have done seemingly everything possible to reduce financial barriers to entry for low-income students. But a 2017 New York Times study looking at diversity and student outcomes at some of the nation’s most elite schools suggested there is still much work to be done.

A closer look at the data as it applies to Princeton found the median family income of a student is $186,100; 72 percent of students come from the top 20 percent income bracket. 

Bloomberg cited this study upon announcing his Hopkins gift, which, by going all-in on financial aid to eliminate financial barriers to entry, demarcated his preferred course of action. But the Times study also underscores the inherent limitations of a cash-focused strategy. Remember: Princeton already provides incredibly generous financial aid, yet only 28 percent of its students come from a family residing in the bottom 80 percent income bracket. This why researchers dialed into the accessibility issue weren’t particularly enthusiastic about Bloomberg’s plan.

“Unless Hopkins is also willing to provide a preference in admissions to disadvantaged students, it’s unlikely that they’ll be admitted in large numbers,” said Richard Kahlenberg, a senior fellow at the Century Foundation.

By expanding the student population, Princeton’s strategy suggests it’s going to take more than financial aid to move the needle when it comes to recruiting underrepresented students. But will it? It depends on how one defines progress.

Princeton’s incoming class of 2018 consists of 1,346 students. Its plan is to admit an extra 125 students per class. What percentage of these 125 new students will come from “low-income” families? It’s hard to tell from Princeton’s strategic framework. In contrast, thanks to Bloomberg’s billions, Hopkins hopes to raise its share of Pell Grant recipients from 15 percent to 20 percent by 2023.

If Princeton takes a similar approach and aims to boost its ranks of low-income students by five percent, it will admit extra six students per year, per class.

Mixed Data

According to its strategic plan, Princeton’s board was “impressed with strong evidence showing that a college degree is the most important factor in allowing students from low-income backgrounds to achieve social mobility, and that talented students from low-income families are most likely to thrive if they attend highly selective, well-resourced institutions such as Princeton.”

While the plan didn’t reference the corresponding “evidence,” Times study found that 1.3 percent of students at Princeton came from a poor family but became a rich adult. This finding mirrors additional research, like a July 2017 report by the National Bureau of Economic Research, showing the most efficient engines of upward mobility aren’t Ivy League institutions, but mid-tier public institutions like the City University of New York (CUNY), California State-Los Angeles, and the University of Texas-El Paso.

Sixteen percent of students at these schools hail from the bottom income quintile, more than four times the Ivy League average. Yet for whatever reason—few affluent alumni, community colleges’ inherent unsexiness; the theories run the gamut—donors haven’t rallied around this model.

In a 2016 post about Herb Albert’s $10.1 million donation to Los Angeles City College (LACC), I noted that, according to the Council for Aid to Education, only 1.5 percent of charitable gift dollars raised by educational institutions go to two-year institutions. Commenting on the gift while acknowledging the relative lack of donor support for community colleges, Robert Schwartz, the director of the LACC Foundation, said he hoped others would follow Alpert’s lead. Few did.

Compounding matters is the fact that these mid-tier schools are getting decimated by cuts to public spending. Recent news out of New York, just 50 miles north of Princeton, provides a stark counter-narrative.

Back in May, students at CUNY, which has the distinction ranking No. 1 in the Chronicle of Higher Education’s list of four-year colleges offering the highest chances of social mobility for its 275,000 low-income students, protested the system’s plan to consolidate control over $37 million in student activity fees. If the administration had not explicitly protected student-group funding in the proposal, certain organizations could have suffered a drastic cut in their budgets. CUNY administrators relented; student groups would not be at risk of losing funding.

If you’re like me, your first reaction to this protest was a mix of incredulity and sadness. In a higher ed space in which colleges and universities raised $43.6 billion in 2017, primarily low- to middle-income students at the country’s greatest engine of upward mobility took to the streets to protest a paltry $37 million in potential cuts.

Princeton, meanwhile, as the fifth richest school in the U.S., has an endowment of $25.9 billion. Its 2017-18 Annual Giving campaign raised $70 million. It has a dubious track record on the upward mobility front. And while well-intentioned, its plan to expand its undergraduate class may bring in, at the most, a handful of new low- to-middle income students in its ranks.

It just received a check for $65 million.

The Perils of “Ivy League Mania”

In a recent piece in the Washington Post, Christina Emma writes about American society’s “Ivy League mania.” It’s not a good thing.

Conventional wisdom tells us an elite education is a gateway to professional success, despite the mixed data. Infatuation with an Ivy League education blinds us to schools’ flawed, arbitrary, and discriminatory admissions policies. This obsession also puts an undue influence on high test scores, which “first and foremost” is a “reflection of family money,” according to Sara Goldrick-Rab, a professor who studies higher ed at Temple University and vocal opponent of Bloomberg’s Hopkins gift.

Ivy League alumni mega-donors like Perelman, Bloomberg, John Paulson, Kenneth Griffin, Marc Rowan—the list is endless, really—continue to contribute to this mania, and understandably so. They are eternally grateful for the formative education they received. They are emotionally invested in their alma mater’s future success. They want to kickstart promising medical and scientific research. Some may even secretly like having their name adorn a glittering new facility.

Zoom out further, and the issue of relative impact becomes even more acute, since a fraction of a fraction of students end up in elite schools.

In a Times piece entailed “The Misguided Priorities of Our Educational System,” the Manhattan Institute’s Oren Cass cites federal data showing that fewer than one in five students “smoothly navigate the high school to college to career pathway. More students fail to complete high school on time, more fail to move on from high school to college, and more drop out of college.”

Yet a disproportionate amount of public funding—$150 billion and change—plus billions in private donations flow to the roughly 20 percent of kids cycling through the higher education system. Annual federal spending for the non-college vocational pathway, meanwhile, is a paltry $1 billion. (This figure excludes philanthropy, which, as noted, is minuscule when compared to support for the four-year university model.)

“One explanation for this bizarre state of affairs, in which society invests heavily in those headed for economic success while ignoring those falling behind,” Cass writes, “is the widespread belief that everyone can be a college graduate. If that were true, the shove toward the college pipeline might make sense.” Cass argues that the belief doesn’t make sense and calls for more funding towards vocational training.

The link between a $65 million Ivy League gift to insufficient vocational training may seem bit discursive, but it underscores the yawning gap between mega-donor priorities and other areas of need. In a world where influence of mega-donor influence rises proportionately to government’s retreat in most facets of public life, context and impact matter. (Don’t just take my word for it—books have been written on the topic.)

As far as the higher ed space is concerned, can Len Blavatnik, for example, make a compelling case for giving $200 million to Harvard Medical School if the funding unveils promising new cancer treatments? Most certainly. Can one make a similarly convincing argument that funneling millions into affluent Ivy League schools to attract less than a dozen new low- to middle-income students per year, especially when cash-starved mid-tier institutions do a better job at boosting upward mobility? It’s a harder sell.

As the Post’s Emba so eloquently notes, “Opportunity exists outside of elite institutions; Harvard isn’t the only place where talent can thrive.”