2008 Booth, and Other, Schools of Business
Business education has been an American specialty ever since Joseph Wharton’s gift launched a special school at the University of Pennsylvania (see 1881 entry), and philanthropy remains the lifeblood of these institutions. The recent gift of $300 million to the University of Chicago graduate school of business is illustrative. David Booth and Rex Sinquefield, both Chicago MBAs, founded a money-management company and built it into a $300 billion fund. Booth had served as research assistant to Nobel-winning economist Eugene Fama at Chicago, and applied many academic techniques of analysis in building his firm. Wishing to express his gratitude to the university, Booth made his large donation to the business school right in the teeth of the economic turmoil of 2008, when universities were struggling with major endowment losses. Booth’s gift was not only the biggest ever received by the University of Chicago, but also the fattest given to any business school. Renamed the Booth School, Chicago’s program is now ranked among the top U.S. MBA programs.
Other major philanthropic gifts to business schools include the $200 million real-estate developer Stephen Ross gave to the University of Michigan, investor Robert King’s $150 million donation to Stanford (to encourage entrepreneurship as a solution to poverty overseas), John and Marion Anderson’s $142 million of support for UCLA’s school of business (which allowed it to entirely cease dependence on state funds), real-estate investor Ernest Rady’s $130 million to build up University of California, San Diego’s MBA program, Nike founder Phil Knight’s $105 million gift also to Stanford, and Henry Kravis’s $100 million for the Columbia Business School. At least 25 gifts of $40 million or more have been made to graduate schools of business around the country over the latest decade and a half.
A philanthropist named Jeff Sandefer donated not only money but his full time to create a new MBA program called the Acton School of Business. It grants MBAs focused entirely on entrepreneurship, using an unconventional curriculum and school structure. Acton instructors are successful businessmen themselves, and there is no tenure. The program relies on actual business cases and hands-on experience. Instead of conventional courses in finance, marketing, accounting, etc., classes are on topics like “customers” and “raising money.” Students have to sell items door-to-door, over the phone, and through a website, and they have to negotiate a real discounted sale with some merchant, or they cannot graduate. The first portion of academic work is done online, then candidates come to the campus and work intensively on a compressed schedule. This allows MBAs to be earned in one year, and, along with philanthropy donations and the fact that some top professors draw no salary and rely instead on their entrepreneurial income, allows MBAs to be acquired for about $50,000 instead of the typical price of two or three times that. Afterward, Acton graduates enter commerce much differently: while only about 5 percent of students at a conventional top MBA program start their own business right away, a quarter of Acton students do so within two months, and another quarter say they will soon.
- News report on Booth gift in the Wall Street Journal, online.wsj.com/news/articles/SB122601317069606639
- Partial list of large recent donations to business schools, poetsandquants.com/2012/10/13/largest-donors-to-business-schools/2
- Forbes profile of Acton, forbes.com/sites/michaelnoer/2013/10/09/startup-school-an-mba-designed-for-entrepreneurs-not-i-bankers