5 ms·

Bill Dietrich gives CMU $250,000,000

117 points by spottiness 15y ago

cleverjake 15y ago
It starts after his death? Why might that be
- suking 15y ago
  I think (and I may be wrong) - he gets to write off the donation now (probably amortized) to help his tax basis even though the $ doesn't go anywhere until he's gone...
  - ahi 15y ago
    Or maybe he wants to play with it now. He gets to have his cake and eat it too. Be fabulously wealthy and get accolades for his generosity.
  - hullo 15y ago
    From the language I'd guess they might be setting up a charitable lead trust or gift annuity, where he'd actually be giving he money now but will continue to draw an income from it over the rest of his life. I'm fairly far removed at this point from a former career in university advancement though - that would certainly be much much larger than any I'd heard of before. There's probably also a fair chance he's already set up or is now setting up an independent foundation or trust that the money will reside in. It's (I'd guess) fairly unlikely this is a standard bequest, though, given both the revokability and uncertain future tax status of that option. I imagine it would also take multiple years for an estate of that size to close and the funds to become available to CMU. In terms of "why" of now, well, he gets to live for however much longer seeing his mom's name on a school that obviously means something to him, and as CMU is doing a big campaign, he gets to be a linchpin of that.
  - ChuckMcM 15y ago
    Yes, this is something I talked about with an estate attorney when we had kids and were setting up a living trust. Basically you can create an entity called a charitable trust which is a gift to a third party, that transfers on your death, and avoids estate taxes. What is more interesting is that many of these are more durable than language in one's will, specifically the will can be challenged and thrown out but a charitable trust won't get screwed because of it.
    - cleverjake 15y ago
      Thanks for the answer, thats real interesting.
- HaloZero 15y ago
  Won't get taxed by Estate Tax either I believe.
spottiness 15y ago
Live announcement here now http://www.cmu.edu/event/sept7/ http://www.cmu.edu/event/sept7/
bluekeybox 15y ago
Wow, just looked at his book, "In the Shadow of the Rising Sun: The Political Roots of American Economic Decline" (published in 1991, at the time when Japan was today's China...), and this guy is about as far away from my libertarian worldview as you can imagine. He believed that America's problem at the time was that it didn't have enough bureaucracy (which is especially ironic given how bureaucratic gerontocracy today is believed to be stifling Japan's growth). Hope his donation will do some good though.
- 0x12 15y ago
  > And this guy is about as far away from my libertarian worldview as you can imagine. There is something really funny about a guy with a 'not so libertarian' worldview donating 265 million to a university and a guy with a libertarian worldview that probably will never be in a position to do so commenting on that.
  - dmm 15y ago
    "If you're so smart, why ain't you rich?"
  - deleted 15y ago
    [deleted]
    - 0x12 15y ago
      No grudge, it just seemed as though giving an amount like that without any expectation of a return was not exactly a libertarian thing to do. As for not knowing what your position is, that's correct but it's a safe bet that you are not a in position to match his donation. Feel free to surprise me ;)
      - schmittz 15y ago
        People have a horrible misunderstanding of libertarianism. Libertarians believe people should be absolutely free to do what they want with their money. Libertarianism is not a fancy word for narcissistic hedonism. From a philosophical standpoint, libertarians should welcome charity/philanthropy as it is a free market solution to dealing with society's problems. They are merely against forced charity (i.e. welfare, medicaid, etc.). Mr. Dietrich's donation fits perfectly within a libertarian framework. Sorry to ruin the joke, but there's no hidden juxtaposition there.
ahi 15y ago
According to Wikipedia, CMU currently has an endowment of $815m so rather huge donation. I was actually surprised by this. For some reason I thought CMU had one of those endowments where $250m gets a urinal named after you.
- btucker 15y ago
  Right. This was something I remember was discussed quite a bit while I was a student there. CMU has a small endowment compared to the more established private colleges it is increasingly competing against. Harvard: 27.4 billion Stanford: 13.9 billion MIT: 8.3 billion Etc.
- cschmidt 15y ago
  I'm a CMU alum, and I asked about that once when they were mentioning "space naming opportunities". Very roughly and unofficially speaking, $50,000 gets you a classroom, $1,000,000 gets you a floor or wing, and $20 million gets you a department. Apparently $265 million gets you a college.
  - dmv 15y ago
    $55 million (Tepper) in 2003 was the previous price...
    - cschmidt 15y ago
      Well, you expect the b-school to cost more than other departments, don't you :-).
      - benmccann 15y ago
        The Tepper School of Business is a college at CMU just like the newly-named Marianna Brown Dietrich Humanities and Social Sciences college. The colleges contains departments such as English, Philosophy, etc.
        15y ago
pitdesi 15y ago
Always amazes me that there are people out there who have $265mil to give that you can barely find anything about on Google. (Bill likely has a lot more too, as he is expected to give a very large gift to the University of Pittsburgh). More details on him here: http://www.postgazette.com/pg/11250/1172681-455-0.stm http://www.postgazette.com/pg/11250/1172681-455-0.stm
- testcock1 15y ago
  What surprised me even more was that it was only the 14th largest donation in history made to higher education. Here's the list if anyone else was wondering: http://chronicle.com/stats/big_gifts.htm http://chronicle.com/stats/big_gifts.htm
  - ehsanu1 15y ago
    That list is slightly outdated, missing the $10b endowment for the King Abdullah University of Science and Technology (endowed by its namesake). http://en.wikipedia.org/wiki/King_Abdullah_University_of_Science_and_Technology http://en.wikipedia.org/wiki/King_Abdullah_University_of_Sci...
    - threpinatoy 15y ago
      Does a large endowment incentivize murder?
      - sp332 15y ago
        I'm sure the document has a clause which invalidates the donation if they murder him for the money.
    - bostonpete 15y ago
      An endowment of a public university by a king seems like a far cry from a "private donation" (which that list presents) to me...
    - mahmud 15y ago
sb 15y ago
I wondered what the other biggest gifts were, but could not find a canonical list. A good starter is the following: http://web.mit.edu/newsoffice/nr/2000/neurogifts.html http://web.mit.edu/newsoffice/nr/2000/neurogifts.html I guess that its top 3 still hold. In addition, I found the following: - $1b endowment to found Vedanta University from Anil Agarwal Foundation (2006) - $454.5m to National Taiwan University from Terry Gou (2007) - $400m to Columbia from John Kluge (4th largest in 2007) - $360m to RPI from an anonymous donor (page mentions largest in US history in 2001) I could not easily find the official list all of these pages refer to, anybody has an idea?
- hullo 15y ago
  I don't know about 'official', but it's highly likely that the Chronicle of Higher Ed/Chronicle of Philanthropy are the most referred to. Here's a list from 2008: http://chronicle.com/stats/big_gifts.htm http://chronicle.com/stats/big_gifts.htm And here's a searchable database: http://philanthropy.com/stats/topdonors/index.php http://philanthropy.com/stats/topdonors/index.php
  - sb 15y ago
    Thanks for that list, it seems to me that this is the list all of the articles refer to.
HardyLeung 15y ago
Congrats to CMU!
epenn 15y ago
I was originally going to post that sometimes I wish gifts like this would be given to smaller, less fortunate schools. A top tier school like CMU is always going to be able to find new sources of endowment. I still believe this in general. However before reading the previous comments, I had no idea how small CMU's endowment was compared to other top tier universities. If the numbers I read are correct, CMU's $815 million is only 2.97% of Harvard's $27.4 billion. Not nearly what I assumed it was.
- pilom 15y ago
  CMU made some very big announcements (big to students at the school) in 2007 when their endowment broke $1 billion for the first time ever. And then 2008 happened.
startupcomment 15y ago
This is great for CMU but it has a long way to go to catch up to the endowments of its peer institutions -- both on a gross and on a per capita basis.

117 points by spottiness 15y ago

cleverjake 15y ago

It starts after his death? Why might that be

suking 15y ago
I think (and I may be wrong) - he gets to write off the donation now (probably amortized) to help his tax basis even though the $ doesn't go anywhere until he's gone...
- ahi 15y ago
  Or maybe he wants to play with it now. He gets to have his cake and eat it too. Be fabulously wealthy and get accolades for his generosity.
- hullo 15y ago
  From the language I'd guess they might be setting up a charitable lead trust or gift annuity, where he'd actually be giving he money now but will continue to draw an income from it over the rest of his life. I'm fairly far removed at this point from a former career in university advancement though - that would certainly be much much larger than any I'd heard of before. There's probably also a fair chance he's already set up or is now setting up an independent foundation or trust that the money will reside in. It's (I'd guess) fairly unlikely this is a standard bequest, though, given both the revokability and uncertain future tax status of that option. I imagine it would also take multiple years for an estate of that size to close and the funds to become available to CMU. In terms of "why" of now, well, he gets to live for however much longer seeing his mom's name on a school that obviously means something to him, and as CMU is doing a big campaign, he gets to be a linchpin of that.
- ChuckMcM 15y ago
  Yes, this is something I talked about with an estate attorney when we had kids and were setting up a living trust. Basically you can create an entity called a charitable trust which is a gift to a third party, that transfers on your death, and avoids estate taxes. What is more interesting is that many of these are more durable than language in one's will, specifically the will can be challenged and thrown out but a charitable trust won't get screwed because of it.
  - cleverjake 15y ago
    Thanks for the answer, thats real interesting.
HaloZero 15y ago
Won't get taxed by Estate Tax either I believe.

spottiness 15y ago

Live announcement here now http://www.cmu.edu/event/sept7/ http://www.cmu.edu/event/sept7/

bluekeybox 15y ago

Wow, just looked at his book, "In the Shadow of the Rising Sun: The Political Roots of American Economic Decline" (published in 1991, at the time when Japan was today's China...), and this guy is about as far away from my libertarian worldview as you can imagine. He believed that America's problem at the time was that it didn't have enough bureaucracy (which is especially ironic given how bureaucratic gerontocracy today is believed to be stifling Japan's growth). Hope his donation will do some good though.

0x12 15y ago
> And this guy is about as far away from my libertarian worldview as you can imagine. There is something really funny about a guy with a 'not so libertarian' worldview donating 265 million to a university and a guy with a libertarian worldview that probably will never be in a position to do so commenting on that.
- dmm 15y ago
  "If you're so smart, why ain't you rich?"
- deleted 15y ago
  [deleted]
  - 0x12 15y ago
    No grudge, it just seemed as though giving an amount like that without any expectation of a return was not exactly a libertarian thing to do. As for not knowing what your position is, that's correct but it's a safe bet that you are not a in position to match his donation. Feel free to surprise me ;)
    - schmittz 15y ago
      People have a horrible misunderstanding of libertarianism. Libertarians believe people should be absolutely free to do what they want with their money. Libertarianism is not a fancy word for narcissistic hedonism. From a philosophical standpoint, libertarians should welcome charity/philanthropy as it is a free market solution to dealing with society's problems. They are merely against forced charity (i.e. welfare, medicaid, etc.). Mr. Dietrich's donation fits perfectly within a libertarian framework. Sorry to ruin the joke, but there's no hidden juxtaposition there.

ahi 15y ago

According to Wikipedia, CMU currently has an endowment of $815m so rather huge donation. I was actually surprised by this. For some reason I thought CMU had one of those endowments where $250m gets a urinal named after you.

btucker 15y ago
Right. This was something I remember was discussed quite a bit while I was a student there. CMU has a small endowment compared to the more established private colleges it is increasingly competing against. Harvard: 27.4 billion Stanford: 13.9 billion MIT: 8.3 billion Etc.
cschmidt 15y ago
I'm a CMU alum, and I asked about that once when they were mentioning "space naming opportunities". Very roughly and unofficially speaking, $50,000 gets you a classroom, $1,000,000 gets you a floor or wing, and $20 million gets you a department. Apparently $265 million gets you a college.
- dmv 15y ago
  $55 million (Tepper) in 2003 was the previous price...
  - cschmidt 15y ago
    Well, you expect the b-school to cost more than other departments, don't you :-).
    - benmccann 15y ago
      The Tepper School of Business is a college at CMU just like the newly-named Marianna Brown Dietrich Humanities and Social Sciences college. The colleges contains departments such as English, Philosophy, etc.
      - 15y ago

pitdesi 15y ago

Always amazes me that there are people out there who have $265mil to give that you can barely find anything about on Google. (Bill likely has a lot more too, as he is expected to give a very large gift to the University of Pittsburgh). More details on him here: http://www.postgazette.com/pg/11250/1172681-455-0.stm http://www.postgazette.com/pg/11250/1172681-455-0.stm

testcock1 15y ago
What surprised me even more was that it was only the 14th largest donation in history made to higher education. Here's the list if anyone else was wondering: http://chronicle.com/stats/big_gifts.htm http://chronicle.com/stats/big_gifts.htm
- ehsanu1 15y ago
  That list is slightly outdated, missing the $10b endowment for the King Abdullah University of Science and Technology (endowed by its namesake). http://en.wikipedia.org/wiki/King_Abdullah_University_of_Science_and_Technology http://en.wikipedia.org/wiki/King_Abdullah_University_of_Sci...
  - threpinatoy 15y ago
    Does a large endowment incentivize murder?
    - sp332 15y ago
      I'm sure the document has a clause which invalidates the donation if they murder him for the money.
  - bostonpete 15y ago
    An endowment of a public university by a king seems like a far cry from a "private donation" (which that list presents) to me...
  - mahmud 15y ago

sb 15y ago

I wondered what the other biggest gifts were, but could not find a canonical list. A good starter is the following: http://web.mit.edu/newsoffice/nr/2000/neurogifts.html http://web.mit.edu/newsoffice/nr/2000/neurogifts.html I guess that its top 3 still hold. In addition, I found the following: - $1b endowment to found Vedanta University from Anil Agarwal Foundation (2006) - $454.5m to National Taiwan University from Terry Gou (2007) - $400m to Columbia from John Kluge (4th largest in 2007) - $360m to RPI from an anonymous donor (page mentions largest in US history in 2001) I could not easily find the official list all of these pages refer to, anybody has an idea?

hullo 15y ago
I don't know about 'official', but it's highly likely that the Chronicle of Higher Ed/Chronicle of Philanthropy are the most referred to. Here's a list from 2008: http://chronicle.com/stats/big_gifts.htm http://chronicle.com/stats/big_gifts.htm And here's a searchable database: http://philanthropy.com/stats/topdonors/index.php http://philanthropy.com/stats/topdonors/index.php
- sb 15y ago
  Thanks for that list, it seems to me that this is the list all of the articles refer to.

HardyLeung 15y ago

Congrats to CMU!

epenn 15y ago

I was originally going to post that sometimes I wish gifts like this would be given to smaller, less fortunate schools. A top tier school like CMU is always going to be able to find new sources of endowment. I still believe this in general. However before reading the previous comments, I had no idea how small CMU's endowment was compared to other top tier universities. If the numbers I read are correct, CMU's $815 million is only 2.97% of Harvard's $27.4 billion. Not nearly what I assumed it was.

pilom 15y ago
CMU made some very big announcements (big to students at the school) in 2007 when their endowment broke $1 billion for the first time ever. And then 2008 happened.

startupcomment 15y ago

This is great for CMU but it has a long way to go to catch up to the endowments of its peer institutions -- both on a gross and on a per capita basis.