November 07, 2008
Financier Commits $300-Million to U. of Chicago Business School
By Lawrence Biemiller
The economy’s turmoil notwithstanding, an alumnus will give the University of Chicago’s Graduate School of Business $300-million, the university announced on Thursday.
The gift is the largest ever to a business school, the university said. (See The Chronicle’s list of recent top gifts.)
The donor, David G. Booth, credits principles he learned at the business school for the success of the investment firm he and another alumnus started in 1981, Dimensional Fund Advisors. Mr. Booth, the company’s chief executive, earned a degree from the business school in 1971.
As a graduate student, he was a research assistant for Eugene F. Fama, a finance professor at the business school who has since served on the board of Dimensional Fund Advisors, along with other faculty members from the business school. Mr. Booth said in a statement released by the university that his first course at the business school was with Mr. Fama, “and it was a life-changing event for me.”
“We built Dimensional Fund Advisors around his set of ideas,” said Mr. Booth, 61. “It would be hard to find anyone who benefited more from a University of Chicago education and from the faculty at Chicago than I have.”
Mr. Fama, still an active member of the business-school faculty, is best known for advancing the efficient-market hypothesis, which holds that, generally speaking, investors can’t beat the financial markets because markets efficiently incorporate new information about each traded asset into the asset’s price. The hypothesis suggested that alternative investment strategies made more sense, including index funds and other financial tools that have become popular.
Mr. Booth, who is a trustee of the university, said that he was making the gift along with his wife, Suzanne, and their family, and that the gift came without restrictions. The business school, already a powerhouse, said that it would use the money “for several new initiatives, including aggressively attracting and retaining star faculty,” and that it might add additional international programs to its existing campuses in London and Singapore. The school will get a new name, too—the University of Chicago Booth School of Business.
The no-strings nature of the gift and the opportunities for improvement that it will give the business school offers an interesting contrast to the controversy over the university’s plan to create a $200-million Milton Friedman Institute of Economics. Backers of the idea say that a well-heeled institute is essential if the university hopes to retain its pre-eminence in economics, but critics fret that it could become a haven for right-wing, free-market thinkers, and that the university’s plan to offer life memberships to million-dollar donors to the institute “invites cronyism, corruption, and creeping corporate takeover.”
Lawrence Biemiller reports for The Chronicle of Higher Education.
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A great example of the American way, altruism and the future of college funding. It would be nice to see some of the money used to combat the escalating costs of attending the school.
Imangine how many students could start life without debt?
www.buzzfund.com
— 4students Nov 13, 12:04 PM #