Struggling School Gets Boost to $5.7 Billion Endowment

February 4, 2011 at 7:31 PM Leave a comment

Would-be reformers of the charitable tax deduction often complain that much (if not most) of the charitable giving encouraged by the deduction goes not to organizations that address pressing social needs, but to institutions like colleges and museums.

We don’t accept the implicit claim that charitable gifts to such institutions are wasted and provide no good to the wider world. However, it is harder to defend donations to schools with large, multi-billion dollar endowments. The Philanthropy News Digest reports such a case:

The Wharton School of the University of Pennsylvania has announced a $6.5 million gift from alumnus (’70) Barry R. Lipman, co-founder of the California-based law firm Goldfarb Lipman, to establish the Lipman Family Prize.

The University of Pennsylvania’s endowment, according to the school’s web site, stood at $5.7 billion as of September 2010. The school’s student paper, the Daily Pennsylvanian, reported that the Wharton Business School enjoyed the biggest per-student share of the endowment, noting “with a per-student endowment of $113,000 and 4,037 students, Wharton’s pool is substantially larger than that of the School of Engineering and Applied Science, which has $77,280 for each of 2,588 students.” (The report is six years old, but do these ratios change very quickly? I rather suspect not.)

The upshot being, the Wharton Business School doesn’t really need Mr. Lipman’s money. It’s his to give as he wishes, but this donation does deserve some criticism.

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