An interesting new report shows that UChicago ranks highly in terms of producing super-rich alumni. I suspect Booth has contributed greatly to this fact but it leaves me wondering: Why don’t donations and the institutional endowment reflect this fact?
http://www.wealthx.com/articles/2015/wealth-x-weekly-insight/
Your second premise is wrong. Chicago has quite a strong endowment – about $7.5 billion as of a year ago. Historically, it has been about the same size as the endowments of Penn and Northwestern. It has fallen behind a little bit since 2000, because Penn and Northwestern did huge capital campaigns that ended recently, and Chicago both held off on starting a capital campaign until recently and went on a building spree, constructing new and quite impressive buildings at the fastest rate since it was founded. When it’s done with the current campaign, it should once again be even with or a little bit ahead of Penn and Northwestern.
But basically what that chart provides is a ranking of business school prestige and, as a secondary matter, size. In the top part of the chart, I am pretty certain that most of the Ultra High Net Worth individuals attributed to each university are business school alumni with MBAs.
^ Since 2010, not 2000.
There’s no question that, in the second half of the 20th Century, Chicago’s regular alumni giving seriously lagged that of its academic peers, at least insofar as the College was concerned. There were several overlapping reasons for that.
One of the most important was the size of the College. While most of its peers expanded their undergraduate colleges in the post-war period, and then again when they went co-ed around 1970, Chicago’s College actually shrank quite significantly in the 1960s-1980s, at one point falling below 500 students per class. Various solutions were considered, including moving to the suburbs, merging with Northwestern, and simply closing the College down. When a college isn’t graduating a lot of students, it will tend to have less alumni giving than similar colleges graduating more students.
Second, the College alumni Chicago was creating in that period tended to be ambivalent about the institution. Chicago’s self-image was one of intellectual rigor and asceticism. Students were expected to work hard with little reward, and the University did nothing to foster extracurricular activities. It was no fun – those were the days that gave rise to the “Where Fun Comes To Die” slogan. Alumni tended to be very proud of their education at Chicago, but they often lacked warm memories about that period of their lives and good associations with the University. The Marine Corps basic training facility at Camp Lejeune doesn’t get a lot of grateful alumni donations, either.
Third, Chicago’s single-minded focus on academic ability and academic training meant that, unlike the Ivy League, it was not educating a cohort of future leaders and entrepreneurs who were doers rather than thinkers, nor was it cultivating generations of loyalty in wealthy families. Chicago’s College alumni, compared to Ivy League alumni, were disproportionately academics and government bureaucrats as opposed to corporate executives, entrepreneurs, and politicians. So they were less wealthy as a group.
All of these issues got hashed out in a massive long-range planning report about 15 years ago that encapsulated the thinking of the current generation of Chicago’s leaders, especially Richard Zimmer and John Boyer. It recommended and explained the decisions to expand the College to its current size, to make admissions more holistic, and to invest real money in improving undergraduate quality of life. Those efforts – which began before the report, but accelerated after it – have been sensationally successful for the University in many ways, including, I believe, for its fundraising. (I wish I could find the report somewhere online so I could link it. But I looked and looked, and haven’t found it.)
Just wondering - is U Chicago still “where fun goes to die”?
@Nerdyparent nope! not at all. Happy to report that fun is well and alive at the school.
@JHS @Laches Nice explanation JHS! I’d like to add that, as a corollary, Chicago is actually shockingly wealthy despite having next to no undergrads in the mid twentieth century. In addition, a large (disproportionate) portion of Chicago’s endowment is allocated to faculty - which explains why Chicago consistently, year-after-year, pays the 3rd or 4th highest median faculty salaries in the US, despite having an endowment that is much smaller than say, Stanford or Yale.
http://data.chronicle.com/faculty-salaries/
Recently however, fundraising has begun in earnest on things like undergraduate scholarships and financial aid. This explains some of the more recent developments like the 43% increase in first generation students for the college class of '19.
http://news.uchicago.edu/article/2015/06/05/uchicago-welcome-more-first-generation-students
Does anyone know how much of the $2.5 billion that has been collected on the $4.6 billion capital campaign is already reflected in the $7.55 billion endowment number from June 30, 2014? If a significant portion of the money already received is reflected in that endowment number, then I think it will be hard for us to equal or overtake UPenn and Northwestern when the campaign is over unless we take in more than the goal. Your thoughts, JHS?
Without looking anything up (so, of course, this is completely unreliable):
– The $7.5 B number is as of June 30, 2014, so it’s a year old.
– I doubt much of the capital campaign money had actually been collected at that point. The public phase of the campaign did not even formally begin until months after the fiscal year end. There was, of course, a significant “quiet period” that “raised” $2 B before anything was announced publicly, but I think “raised” means “pledged,” not “transferred to our bank account”.
– Heck, I looked. The University’s financial reports for 2014 shows $99 M cash contributed to endowment and $38 M transferred to endowment by the board that year. In 2013, the equivalent total was about $20 M less, and in 2012 – clearly before any capital campaign effect – it was $55 M less than in 2014. So if you use that as a baseline, there might be $100-$200 M of capital campaign funds in the 2014 endowment numbers.
@JHS Great post as usual. Although, UChicago may not surpass Northwestern because Northwestern has embarked on their own 3.5 B fundraising campaign.