Hedge fund billionaire John Paulson has decided to use $400 million of his fortune to establish a new school of engineering at Harvard. That decision has led to a chorus of boos and hisses from people who think that they know how better to use Paulson’s money. Malcolm Gladwell for instance derides the gift as a bad choice. Paulson could have used the money to help the poor, but instead chooses to give it to the world’s wealthiest university, he argues.
But writing on Forbes, Manhattan Institute’s Howard Husock defends Paulson. He points out that it’s a false dilemma to say that unless you give money directly to help the poor you are ignoring their plight. The lives of the poor around the globe have been improved greatly by the products of American engineering. Who knows what innovations might come about as a result of Paulson’s gift, but the benefits are likely to redound to rich and poor alike.
Targeted university gifts like this have often gone awry, as Martin Morse Wooster observed in this Pope Center paper. I would surmise, however, that Mr. Paulson has had this donation flyspecked by the best lawyers around to make sure that the funds go only into the engineering school and not whatever else the Harvard bigwigs might prefer.
To the complainers, I think the best retort is, “Go make your own money and donate it however you think will do the most good.”