Another $10 Million to UPenn from Lauder Heirs Makes a Hat Trick

Ronald (Wharton ’65), Leonard and William Lauder this November pledged $10 million to a new fundraising campaign at the Lauder Institute: a part of the University of Pennsylvania’s Wharton Business School. They seek to raise money for financial aid, outreach and tech upgrades.

If the name sounds familiar, this is the family that essentially willed the American cosmetics industry as we now think of it into existence: the free stuff entrapments, the department store "spritzer girls" with their guerrilla tactics, the persistent hewing of vulnerable ego into dedicated consumerism, etc.

Manhattan department stores first began stocking Estée Lauder cosmetics in the 1940s. The company was worth around $1.5 million in 1960, $100 million in 1972, and had grown to $1 billion by the 1980s. Lauder Inc.’s latest financial report places its current worth around $10.2 billion.

Company co-founders Estée and Joseph did some small-scale urban beautification philanthropy during the '60s and ‘70s in Manhattan. But the family didn’t get seriously involved with higher education until 1983. That year, after Joseph’s death, the Lauder Institute at UPenn opened on a $10 million family gift.

Leonard Lauder gave the Institute an additional $10 million in 1996. The most recent $10 million that the Institute received is the third in a series of 3 gifts. But where does it all come from?

In the wake of Estée’s 2004 death, estate planners executed one of the largest and most elaborately choreographed tax dodges in history. She successfully bequeathednearly $4 billion to her heirs… [and] the estate was taxed at an effective rate of 16 percent — about a third of the top estate tax rate at the time.”

Aside from UPenn’s Lauder Institute, the family has also grated bits of this formidable dynastic cheese block onto NYU, Columbia, Yale, Harvard, Pratt and CUNY, along with Universities of Miami and Arizona. According to Foundation Center data, Lauder family affiliated foundations gave U.S. universities a combined total of nearly $19 million during the 2000s.

Little information is available on what the family does with these smaller grants. But perhaps an explanation of the Lauder Institute’s ethos says something about the family’s approach to education funding more generally.

As it expanded internationally, Lauder Inc. felt "handicapped by its unfamiliarity with overseas markets, cultures and languages," according to The New York Times. In turn, their Upenn program emphasizes a global perspective, language studies and international relations. Administration and faculty often play up the program’s uniqueness in this regard, and argue that many other options on the business education market are sorely deficient in these areas.

Is it a gimmick? Maybe. One Penn law grad I spoke with said Lauder costs about $50,000 more than UPenn's standard-issue MBA; what you pay extra for is a bit of extra curricular icing and a summer abroad.The Lauder Institute Building