A Public University Mega-Gift Raises Questions Concerning Donor Influence and Equity

The University of Virginia (UVA) recently netted a $120 million gift—the largest in its 200-year history—from the foundation of alumnus Jaffray Woodriff to establish a School of Data Science. The school, according to UVA, will position the university as a “global leader in efforts to improve society through teaching and research based on the powerful, emerging field of data science.”

What’s not to love? Quite a bit, it seems.

Members of UVA’s community have criticized the gift from multiple angles. The gift, some argue, is yet another example of a wealthy individual exerting disproportionate influence over a public university. The new school will force students into an increasingly expensive private housing market, further driving up the cost of living for students, residents and university employees. And while UVA rakes in yet another mega-gift, individuals who work in the school’s dining service centers earn $10.65 an hour, far short of what is considered a living wage for the Charlottesville area.

All thing being equal, the pushback here is relatively muted. The consensus across the UVA community is that a $120 million gift to cultivate an in-demand skill set is, as you might suspect, a good thing. But as universities—particularly public universities—are increasingly turning to private dollars as state governments step back, we’re seeing a commensurate uptick in criticism around mega-donor influence, escalating costs, and how a university can unwittingly exacerbate economic inequality.

A Big Bet on Data Science

Woodriff grew up on a farm in Virginia and after graduating from UVA, taught himself trading out of his apartment. In 2009, he co-founded Quantitative Investment Management (QIM), a private investment firm also based in Charlottesville, where he serves as CEO and clearly has done very well. (Although running QIM can be a bumpy ride: Its flagship Tactical Aggressive Fund fell about 42 percent last year, according to an investor document seen by Bloomberg after surging 60.5 percent in 2017.)

He is trustee of the QIM’s philanthropic arm, the Quantitative Foundation. The foundation has previously given more than $30 million to UVA, including a $10 million grant in 2014 used to establish the Data Science Institute, which will be integrated into the new School of Data Science.

Woodriff made back-to-back $2 million grants for education support in 2010 and 2011, then another $4 million for education in 2012. He was also the main donor for the university’s $12.4 million, 33,000 square-foot McArthur Squash Center, which opened in 2013. Woodriff’s wife, Merrill, who completed a bachelor’s degree from the College of Arts & Sciences and a master’s degree from the Curry School of Education in 1998, is a foundation director.

Commenting on his most recent gift, Woodriff’s motivations echo those of other donors who have made big bets on data science over the past few years. “Quantitative Foundation shares the University of Virginia’s belief that the School of Data Science will establish leadership in a field that already plays a central role in shaping our future,” he said. “The time is right to establish a school which will not only train the finest data scientists in the world, but will also collaborate with schools across the university to evaluate and shape policy with respect to the ethical, privacy and regulatory aspects of data science application.”

The foundation’s gift will support faculty and administration for the school as well as doctoral and post-doctoral fellowships, with matching funds from UVA’s Bicentennial Professors Fund and Bicentennial Scholars Fund. The gift will also support a new building for the school and an endowed fund for visiting scholars from other schools and academic units.

Familiar Arguments

On the heels of the Quantitative Foundation’s gift, UVA’s newspaper, the Cavalier Daily, published a piece by Katherine Smith titled “Mega-gifts Threaten Educational Autonomy.”

Smith raised red flags regarding the growing importance of mega-gifts in university fundraising. U.S. wealth inequality has exploded over the past 20 years—the U.S. boasts a record number of billionaires while middle America’s disposable income continues to contract. So it’s more cost-effective for fundraisers to go after the big fish than “ordinary alumni for small donations.”

In a higher education landscape where funding is finite, a disproportionate reliance on mega-wealthy individuals can generate a host of negative outcomes. “Plutocrats,” Smith writes, “have consolidated their ability to have outside influence on higher education and double down on the institutions that protect their wealth and prestige. Less affluent alumni lose their ability to have a more democratic impact on their alma maters.”

It’s worth recalling that in 2012, UVA’s then-president Teresa Sullivan was pushed out of her job in what the New York Times described as a “campus coup”—with some alleging that wealthy donors were instrumental in her removal. (She was later reinstated.) Such donors have come to wield greater influence at UVA and other public universities as state higher ed funding has fallen in real terms.

Yet even as wealthy alumni have showered some marquee institutions with gifts, many schools are barely scraping by. Citing an Inside Philanthropy piece, Smith notes that this imbalance “compounds other forms of existing inequalities, such as the fundraising discrepancies between historically black colleges and universities and primarily white institutions (PWIs)—HBCUs largely have not benefited from windfall donations that largely benefit PWIs.”

Speaking of “windfall donations,” consider UVA’s enviable financial situation.

Its endowment stands at $9.5 billion. It boasts a deep bench of generous alumni. It’s poised to roll out a $5 billion capital campaign this fall, which, if similar efforts tell us anything, should hit its goal early. In addition, a few years back, we learned that the school spent the past decade building an off-the-books investment fund that now totals $2.2 billion. “As the balance grew,” the Washington Post reported, “the university sought to protect the annual funding it gets from Virginia taxpayers and raised its tuition significantly, with the price for in-state freshmen rising 30 percent since 2013.”

And why is tuition rising? “Bureaucrats and buildings,” said George Mason University law professor Todd Zywicki. “The interesting thing about the administrative bloat in higher education is, literally, nobody knows who all these people are or what they’re doing,” he writes in Forbes. As far as UVA is concerned, in a separate piece questioning UVA’s forthcoming capital campaign, the Cavalier Daily’s Smith noted that football coach Bronco Mendenhall and President James Ryan “make upwards of $500,000, excluding Ryan’s extra benefits. Multiple deans… have similar incomes. There are countless other bureaucratic positions that reap similar windfalls.”

Woodriff’s gift, for those keeping track at home, calls for a new layer of administration and a new building. It checks off both of Zywicki’s boxes. Meanwhile, last December, the UVA Board of Visitors approved a 2.9 percent increase in tuition for most undergraduate Virginians and a 3.5 percent increase for out-of-state students.

Cost of Living Concerns

In a somewhat similar line of argument, alumnus David Walton argued that a new data science school adds “unnecessary overhead and complexity” when the data science coursework could have been incorporated into the existing School of Engineering and Applied Science. Veena Ramesh, a second-year computer science student, worries the school could overwhelm existing programs.

Meanwhile, History Prof. John Edwin Mason suggested that the new school could further drive up housing prices. “[The University’s] failure to properly accommodate its students, forcing them on to the private housing market, is a huge driver of the unaffordability crisis in Charlottesville right now,” Mason said. “A new data science school is not a bad thing in and of itself, but built into the plans for this school have to be substantial, significant ways to address the housing crisis.”

In response, Phil Bourne, the acting dean of the School of Data Science, predicted that the university will not see an increase in undergraduate enrollment with the creation of the new school. “We’re kind of working on the premise being that the increase numbers will come predominantly from online, which doesn’t require residential housing,” he said.

All of which brings me to a final point of contention from opponents of the Woodriff gift.

Although we’d like to pretend otherwise, gifts—and mega-gifts in particular—don’t exist in a vacuum. Their inherent “value” can be weighed against contextual forces like rising tuition, the student loan crisis, and issues like accessibility and economic equity. This is why state governors complain about a gift earmarked to fund a football stadium scoreboard while others applaud a gift to provide financial aid to economically disadvantaged students.

According to Wilson, these forces are in full display in Woodriff’s gift, which may widen the gulf between the haves and have nots in a city with a tortured history of racial disparity.

Currently, UVA pays workers a minimum wage of $12.38, while Aramark, the provider for university dining services, pays its employees $10.65. According to MIT’s living wage calculator, a living wage in Charlottesville stands at $12.02 for a single adult of $16.95 for a family of four in which both parents work. What’s worse, the Living Wage Campaign at UVA, launched in 1998, is the longest-running unsuccessful living wage campaign at a collegiate institution, with members still attempting to persuade the university to pay its workers higher wages.

“The university… has been a prosperous university,” Mason told the Cavalier Daily. “That has meant poverty for the overwhelming number of African Americans who work for this University. They receive poverty wages.” The university’s expansion, which threatens to drive up the cost of living further for its workers, probably won’t help matters.

Mason further elaborated in a conversation with the weekly newspaper C-Ville, saying, “There’s nothing fundamentally wrong with a $120 million gift or school for data science. But UVA has been one of the primary drivers of racial inequality, prospering off the impoverishment and displacement of African Americans. And here comes a new school of data science announced as if it’s oblivious to this much more urgent conversation.”

We can all agree that UVA officials owe it to its students, employees and the community at large to address these issues. But what about donors? That’s the big question moving forward, especially as private dollars fundamentally reshape universities in profound and unforeseen ways.

When asked about the criticism, William Foshay, executive director of the Quantitative Foundation, said Woodriff “is a domain expert of data science, and he pursues philanthropy in the area he knows the most about.”