Illustration: Aïda Amer/Axios
A ProPublica investigation has given significant insight into the philanthropic predilections of hedge fund billionaire David Shaw.
What we know: Shaw donated $37.3 million over the course of 7 years to Harvard, Yale, Princeton, Stanford, Columbia and Brown. The donations, most of which went to universities where neither he nor his wife had any connection, accounted for the majority of his charitable giving. His apparent aim: "Making selecting a college as easy as ordering from a takeout menu."
- The money spent on donations was backed up with millions more spent on school fees, tutors and other personal services for his 3 children. The great cartoonist Jules Feiffer, for instance, was given what he describes as "real money" to illustrate a book written by Shaw's 9-year-old.
- Shaw's two eldest children went to Yale after receiving every conceivable advantage in life. Even the children’s friends who visited the Shaws’ apartment on the Upper West Side were not aware that the family owned other apartments in the building brimming with personal staff.
By the numbers: The overall cost of raising a child in America was $233,610 in 2015, or just under $14,000 per year. But, as Yale law professor Daniel Markovits demonstrates in his new book, the average child in America has essentially zero chance of getting into Yale — or any of the other schools that Shaw attempted to buy entry to.
- If you pour tens of millions of dollars into maximizing your children's opportunities in life, they will generally end up outperforming most normal children. But in no sense can that expenditure be considered philanthropic.
Elsewhere in academia, MIT has launched "a groundbreaking philanthropic venture fund" called Solve Innovation Future. It plans to take in some $30 million in tax-deductible philanthropic dollars, starting with a $3 million pledge from Noubar Afeyan, the CEO of Flagship Pioneering.
- All of the money will be put into for-profit investments or internal expenses. When the investments pay out, any profits will be rolled into yet more for-profit investments, in perpetuity.
- There's no limit to how big the fund can get, there are no limited partners to get any payouts, and there are no plans for the fund to ever give away any money in the form of philanthropic grants.
Our thought bubble: The giant tax-exempt hedge funds known as Harvard and Yale lose about 5% of their assets every year, in the form of donations to their venerable educational subsidiaries. Solve Innovation Future makes one wonder why that's even necessary.