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| The Good News |
By the time you read this posting, you will likely have heard or read about David Geffen’s gift of human capital – in the form of scholarships – to the UCLA med school. From the official UCLA media release:
Entertainment executive and philanthropist David Geffen has established an unprecedented $100 million scholarship fund that will cover the entire cost of education for the very best medical students attending the David Geffen School of Medicine at UCLA (DGSOM). The school was named in his honor after his $200 million unrestricted gift in 2002. With this recent gift, Geffen’s total philanthropic support to UCLA exceeds $300 million, making him the largest individual donor to UCLA and to any single UC campus. The David Geffen Medical Scholarship Fund, conceived by Geffen and announced Dec. 13 by Dr. A. Eugene Washington, vice chancellor for health sciences and dean of the medical school, ensures that DGSOM will have students who graduate from medical school debt-free, allowing them to pursue lifesaving research and patient care without the economic burdens that restrict the choices of many young physicians and scientists…
Gifts of this type can be thought of as contributions of human capital. Other forms include endowed chairs, research grants, etc. Such gifts have no termination unlike physical capital gifts, which can someday be demolished. Human capital gifts, therefore, are true legacy gifts. Structures are not.
Yours truly was an undergraduate in the early 1960s at Columbia. A prominent structure that had just been built at the time was Ferris Booth Hall, named after an investment banker. Below is a picture of Ferris Booth Hall.
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| The now-demolished Ferris Booth Hall |
If you went to the Columbia campus today, however, you wouldn’t see Ferris Booth Hall. Why? How could such an imposing structure disappear? Because it was torn down and replaced by another building named after someone else in the 1990s. That is, a little more than three decades after the donation, the fruits of the large gift had disappeared.
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| Proposed UCLA hotel-conference center |
By the way, you might have noticed that Ferris Booth Hall looks uncannily like a certain UCLA hotel-conference center project. So there is a lesson to be drawn: Massive structures may seem like legacy donations. But they can disappear. In contrast, human capital donations, properly endowed, will last. Physical capital donations are Good News for the build-and-bond bureaucracies that depend on them for employment. Human capital donations are Good News for the university and the donors.
