What's the Least Impactful Way to Spend $300 Million?
Buying status is as close to bad as a good act can be.
Earlier this week, hedge fund billionaire Ken Griffin accomplished an embarrassingly impressive feat: he donated $300 million in such a way as to do as close as possible to zero good with it.
Ken, who made his fortune in finance by founding Citadel and Citadel Securities, and is perhaps best known as one of the chief villains in the Gamestop meme-stock saga, has now donated more than half a billion dollars to Harvard. This most recent donation, which is unrestricted, triggered the school to rename their graduate school the “Harvard Kenneth C. Griffin Graduate School of Arts and Sciences.”
Paying $300 million for a plaque with your name on it over a building is vain, sure, but at least it was going to a good cause, right? Furthering “the School’s mission and to advance cutting-edge research and expand access and excellence in education for students and scholars regardless of economic circumstances,” as framed by Harvard’s press release, is a noble philanthropic goal. Who would take issue with that?
I would.
Harvard is the richest school in the world. It had an endowment of $50.9 billion as of the school’s last annual report. The endowment has distributed roughly $2 billion to the school annually for the past 5 years. Harvard has the fifth highest per capita endowment ($2,013,622 per student) and raised $1.38 billion last year, even aside from its historically large endowment.
Ken’s immense gift, then, increased the size of Harvard’s endowment by ~0.6% or could fund 5.5% of the school’s operating expenses for a year.
Assuming the fund’s historical return of 11%, Ken’s gift is equal to 5.4% of the fund’s expected return for 2023. In short, Ken’s gift is a rounding error for Harvard. It doesn’t materially change their ability to deliver on their mission (“to educate the citizens and citizen-leaders for our society”) in any way.
Why does this matter? Again, it’s better to donate to a university, even an already-rich one, than for Ken to keep it, right? I mean, I guess? The real ignominy of this donation, though, is in its opportunity cost.
Effective Altruism has had a tough year w/r/t optics. But this kind of gift is EXACTLY why the movement is important. According to GiveWell’s most recent impact estimates (as of August 2022), Ken’s gift could have had the following impacts:
You can critique these numbers. For example, there has recently been some careful reexamination of the efficacy of deworming. You could also, quite reasonably, note that donating such a large some would likely run into diminishing marginal returns.
Even if you want to discount the above numbers by an order of magnitude, though, I think that it’s hard to avoid concluding that Ken’s choice to spend $300 million on a plaque feels morally repugnant when compared to tens of thousands of lives that could have been saved.
Even if you reject the EA framework and are especially concerned with higher education, there are colleges on the brink of collapse across the county, colleges that lack endowments the size of a small country’s GDP. Furthermore, the students at Harvard, if they aren’t already a part of the elite, will be when they graduate. Students coming from families making less than $85,000 a year already do not have to pay any tuition. Whatever tiny benefits Ken’s gift might produce are accruing to those who need them the least. Would it not be better to help support community colleges, trade schools, or even state universities that might actually be resource constrained or that serve students that are more in need?
I don’t want to perpetuate the Copenhagen Interpretation of Ethics; I’m not putting Ken on blast for the sole reason that he did something with his money. Billionaires hoarding wealth solely for themselves is just as morally reprehensible as Ken buying status. But giving even more money to the richest educational institution the world has ever seen, in our resource-constrained world full of so many problems that are tractable, is, as far as I’m concerned, is as close to bad as a good act can be.
And Harvard takes outrageous overhead rates out of donations (from EA charities) to my research. Surely they could let me use more of the money I raised, instead of taking a cut to add to their Scrooge McDuck pile.
Controversially, I feel this outlines one of the main issues with EA. The problems you outline that could be solved aren’t just tractable, they are incredibly legible. There is a clear link between problem, cost and solution.
However, far less measurable is the output of the marginal students who can attend Harvard / the marginal lecturer they can hire etc. - through illegible means could, either themselves or via the impact on other students, produce world altering innovation that achieves far more than using mosquito nets to save people who will remain in destitute poverty.
On the spreadsheet it looks nice as 1 life saved is an easy metric but in reality its achievement is negligible in the context of what was possible.
I have absolutely no problem with this donation.
To compare run a simple thought experiment. Go back to 1800 and have a few million to donate - do you feed slaves and give them nets or do you build the Carnegie libraries, send Darwin on that ship, offer scholarships to Oxford? The former would certainly save more lives in a legible fashion but I’d contend the latter would do far more for humanity long term, including in mortality, than could ever be measured.