Buy Me a Chair

The wacky world of university endowments

I would like you to buy me a chair. Not just any chair: an endowed chair.

Let me explain.

Universities have strange business models. The legendary University of California president Clark Kerr once quipped that their functions were “To provide sex for the students, sports for the alumni, and parking for the faculty.” These days, the first is laundered for public consumption as “the student experience” and the third is a cost center (yes, many to most professors have to pay, rather a lot, for their parking tags). (The second remains unchanged.)

You can tell that Kerr was president during a time of lavish support because he didn’t include the other function of a university: to provide naming opportunities for donors.

These days, any serious administrator of a university, public or private, will spend an enormous chunk of their time raising money from donors. How much? One informed rumor suggests that a third of their time would not be off-base—and this at a public university. I would wager that private university leaders spend even more time on this circuit—delivering PowerPoints, speaking earnestly over glasses of white wine, negotiating details in tidy but unostentatious rooms, and making ample use of their Clear accounts to move through airports ten percent faster.

Not this chair. The kind where I can afford a standing desk.

Presidents, chancellors, and provosts seek to finagle gifts because the core business of universities—providing credits to students in exchange for tuition—is both volatile and insufficient to meet the boundless ambitions of administrators and faculty alike. (Faculty might protest that their ambitions are quite modest, as they include merely limitless research budgets and infinite releases from course time—but other than that, they ask only for cost of living adjustments as well as regular salary increases.) Trustees expect presidents to bring in new buildings and new chairs; presidents expect trustees to help dun their friends and acquaintances for donations. The incentives even trickle down to deans, directors, and chairs, all of whom live with increasingly austere baseline budgets and a concomitant incentive to find and cultivate donors to expand, or even just support, their operations.

It’s easy, and wrong, for faculty to be cynical about this. First, these operations reflect the gloriously incongruous medieval nature of the university. Higher education in its upper reaches resembles medieval monasteries, and such monasteries provided not just seclusion and sanctity for their initiates but the possibility of the purchase of virtue for the wealthy. So, too, do universities offer grateful alumni and those sentimental about the generation of knowledge opportunities to turn worldly wealth into tax-deductible noblesse oblige.

Second, donors are the customers for the other product of the university: the social proof of good works. Universities offer donors solicitous for the future of the less fortunate opportunities to subsidize tuition, and they offer donors more interested in the benefits of knowledge the opportunity to subsidize research. The reward comes in some combination of the knowledge that such works are being done and the fact that the donor’s name will be associated with it. (Few large university buildings are named the Anonymous Center for Cancer Research.)

Having one’s administrators in touch with the wishes of the well-heeled ensures that the university isn’t insulated from the rest of the world to a fully unhealthy degree. On the other hand, having the most important bridge to the outside come via contacts only with the top 0.1% has its own downsides, as donors’ priorities may sometimes be at odds with the ideal university—basket-weaving may be a popular major, but it may also be a poor target for charitable giving precisely because it’s able to sustain itself, and yet woe betide the chancellor who turns down a gift for advanced basket-weaving studies.

The bar for giving continues to rise. Nine-figure gifts were once unheard of; nowadays, they are striking but no longer unprecedented. For such a sum you can have a constituent college named for yourself. The next frontier must be the billion, or multi-billion, dollar gift. For that level, of course, the reward would have to be commensurate. Given that Harvard was named for a donor who left some books and a few hundred pounds to his eponymous university, one wonders whether someone in Harvard’s charitable receiving arm hasn’t calculated how much it would cost to become, say, the Zuckerberg-Harvard University. (I would wager that an earnest offer of $10 billion would at least raise the issue.)

As the frontiers of giving have expanded, the once-lofty lower end has become slightly commoditized. Almost thirty years ago, the New York Times breathlessly reported that endowing a chair at a leading university (Harvard, Yale, Princeton, Stanford) would cost donors $1.5 million (adjusted: $4.3 million) for the coming season. Endowing a chair at a lesser school would come at a discount:

According to Burr Gibson, a professional fund-raising consultant with Martz and Lundy of Lyndhurst, N.J., chairs now cost more than $1 million at such private schools as Dartmouth, Smith, Vassar and Georgetown. Smaller schools - Washington and Jefferson College or Wilkes in Pennsylvania - ask from $500,000 to $750,000. Chairs at small state colleges and universities are considerably less, but even there a minimum of $300,000 to $500,000 is common nowadays. For example, an endowed professor's chair costs $500,000 at the University of Utah, $350,000 at the University of California at Santa Barbara.

These days, the process is more civilized. One doesn’t have to wait for the Times to inform you what a gift will cost—the information is on the Internet.

UCLA, for instance, posts its price sheet online:

• $5 million for an endowed chair that creates a new position

• $2 million for an endowed chair that supplements an existing position

• $3 million for a chair in the (David Geffen) School of Medicine.

• $1 million for a postdoc (but how much virtue is that, really?)

Duke offers competitive rates as well as the opportunity to endow athletic coaches:

• $2 million for an endowed assistant or associate professorship

• $3.5 million for a full professor

• $2 million for a head coach “in a sport other than football or basketball”

The rule of thumb is that endowments will pay out 4 percent of their principal each year, so each million dollars returns $40,000 per annum. Endowed chairs, in other words, will rarely create a new position—the UCLA new position gift would support $200,000 per year in funding, or about a $140,000 salary plus benefits and other expenses (back of the envelope). But there’s also immortality.

(Immortality can occasionally have drawbacks, as when someone donates large sums to endow professorships in niche topics—or when the donor’s name is no longer welcome to be associated with the university.)

My university’s charitable giving arm is in the midst of what one might delicately call a transitional phase. (This isn’t private information—the issues have been all over the media.) Alas, I can’t tell you exactly how much it would cost for you to buy me a chair, although my recollection is that the rate sheet pegged a chair for me at about $2.5 million (but why not make it $3 million between friends). I’d love to have such a chair, and wouldn’t you love to know I’m working for you?