Phil and Mary Beth Canfield’s $20 million gift to the University of Texas Austin’s (UT) Business Honors Program at the McCombs School of Business is yet another example of a deep-pocketed donor giving back to his alma mater. It also provides an insightful window into what drives donors hailing from high finance, a sector that’s producing many of today’s emerging mega-givers.
A Texas native, Canfield holds an MBA from the University of Chicago Booth School and a BBA in Finance from UT. A 1989 UT Business Honors graduate, Canfield is currently the managing director at private equity firm GRCR in Chicago, which holds roughly $11 billion in assets.
Canfield is a member of the council at the University of Chicago Booth School of Business and serves on the Polsky Center PE Council for the University of Chicago. He’s also a member of the board of trustees for Rush University Medical Center, a member of the board of governors for Rush University, and a member of the United States Olympic and Paralympic Foundation’s Trustee Council.
Back in 2013, he spoke to UT’s Business Honors Program News about his day job. “Our process and leader-driven strategy is our differentiated approach,” he said at the time. “We find great CEOs and use our capital to put them in charge of undermanaged businesses and grow those businesses. We expand their domain, providing more resources, products and services.”
This leadership-driven approach also informs Canfield’s philanthropy. “In order to make a gift like this, you have to have confidence in the leadership,” he said. His conversations with McCombs School of Business Dean Jay Hartzell gave him “faith and trust in his vision for the program and his ability to execute. My confidence is very high.”
In further expounding on their commitment, Canfield articulated several themes that will sound familiar to loyal readers of Inside Philanthropy’s higher ed vertical. Let’s take a closer look.
“Elevate the Status”
The higher ed fundraising space is replete with donors looking to put schools on the national and international map. Examples include Kenneth Griffin’s $125 million gift to the University of Chicago’s economics department, a spate of gifts for medical research and patient care, and the University of Washington and Carnegie Mellon University’s competing efforts in the engineering space.
Donors have also been giving big to business schools.
Back in October, financier Marc Rowan and his wife Carol committed $50 million to support the Wharton School of the University of Philadelphia efforts to attract and retain “world-leading faculty.”
Earlier last year, Atlanta couple Gary W. Rollins and Kathleen Rollins gave the University of Tennessee Chattanooga $40 million for scholarships, recruitment of faculty, classroom renovations, computer labs, offices and common areas in Fletcher Hall, home of the business college. Rollins felt the school's College of Business “has the credentials and accomplishments to become recognized as a national leader in business education and applied business research.”
Similarly, Canfield expressed hope that his gift would shine a light on UT’s business school in a space that includes heavyweights like Wharton, the University of Chicago Booth School of Business, Harvard, Stanford and their ranks of deep-pocketed alumni donors.
UT’s business school provides “the best undergraduate business education in the country and world,” he said, “but it’s not broadly recognized at the national level, so part of what I want to do is elevate the status of BHP.” Dean Hartzell concurred, noting that the gift “will make a material difference—not only in the honors program, but also in the broader community, increasing our national reputation and the impact of our school and university.”
The similarities between Gary W. Rollins and Canfield don’t end there. Neither had an extensive record of mega-giving, at least as far as publicly available information is concerned, prior to their respective commitments. This, too, is no coincidence. In an era when the far upper class is flush with cash—including a very long list of big winners from finance—we’re seeing more mega-donors emerge, practically out of nowhere, to make these kinds of transformative gifts.
Inside the Mind of the Financier Donor
While hedge fund and private equity types don’t exactly have a touchy-feely reputation, one recurrent driver of gifts by these and other higher ed donors is gratitude. “I wouldn’t be where I am today if I hadn’t been in that program,” Canfield said. “It launched what’s been a really fun and successful investment career, and in many ways, I feel like it’s a dividend back to the school for the investment that the school made in me back then.”
I’d like to draw your attention to the term “dividend,” as it dovetails nicely with the third theme in Canfield’s gift—the idea of impact.
“Impact,” of course, is in the eye of the donor, and it’s always interesting to explore this idea when a big gift comes from a donor who made his millions in the world of private equity. Conventional wisdom suggests such donors are driven by a measurable return on investment—metrics, benchmarks, spreadsheets and the like. Yet this perception doesn’t jibe with the data. Research from the Philanthropy Workshop, published in a 2018 report titled “Going Beyond Giving,” found that many mega-donors aren’t obsessed with metrics or evaluation, despite their stereotype as hard-nosed MBA types.
This doesn’t mean donors who made millions in leveraged buy-outs don’t care about impact. Rather, they believe that impact can be intuitive and experiential, rather than a data point plugged into the spreadsheet.
Billionaire investor David Booth gave the University of Kansas $50 million to overhaul the school’s football stadium. Anticipating any pushback regarding the relative impact of the gift, he said, “I get the arguments. I don’t agree with them. I’m on the other side.” He went further: "This is a long-term thing. It's like the stock market... you play for the long haul. You try to do the right thing, and that's all you can do."
Hedge fund billionaire Kenneth Griffin hit upon this idea of intuitive impact in his recent chat with Lisa Bertagnoli in Crain’s Chicago Business. “When I go to Harvard,” he said, “and I’m with the 19-year-old Hispanic student from a poor area of Texas, and they talk about the education they’re having, the experiences they’re having, what they plan to do after university, that’s a great moment.”
Phil Canfield made a similar argument upon announcing his UT gift. “We both believe if you’re helping education and you’re helping people get access to education, that is the single highest leverage and best ROI investment you can make philanthropically,” he said. Canfield foreshadowed this perspective in his 2013 chat with UT’s Business Honors Program News, noting, “I think about philanthropy from an ROI perspective. For me, if you can invest in someone’s education, which helps him/her work hard and contribute to the economy, you are going to get more bang for your buck than any other investment.”
I suspect that proponents for funding to combat malaria, tobacco use, and the opioid crisis may disagree with Canfield’s assessment that giving to a business honors program at a university with an $27 billion endowment is the “best ROI investment you can make philanthropically.” Then again, this proves the point I made earlier: Impact, at the end of the day, will always be an inherently subjective concept, even if the gifts flow from investors and financiers who’ve made their fortunes generating investment returns that can be measured down to the penny.
“Accessibility and Affordability”
The last theme here is access; namely, reducing financial barriers to entry and minimizing debt.
Speaking with the Daily Texan, Hartzell said $7 million Canfield’s donation will go toward the McCombs Scholars Program for a matching scholarship fund, where the next $7 million donated will be matched by the Canfield’s contribution. “I think it cost me $2,000 a year to go here, and even in the late 1980s, (that many) dollars is not that much money…and it’s not (that same amount) today,” Canfield said. “Accessibility and affordability for a public university is essential in the long run.”
Canfield also alluded to this idea back in his 2013 talk with UT’s Business Honors Program News:
I was a beneficiary of a great public school system. I didn’t have to worry about paying much for my education, especially for the value of the education. Not everyone lives where access to high-quality education is readily available. My wife and I have done a lot of scholarship work at the Latin School in Chicago and the University of Chicago Booth School. We hope to do more of that.
$10 million of the gift is also being set aside for an endowment fund, which will go toward expenses such as marketing and perception surveys for the honors program. The program will use the remaining $3 million as immediate spending money. In honor of the couple’s gift, the school will be renamed the Canfield Business Honors Program.
“Mary Beth and I try very hard, in all the organizations and all the communities we’re involved with, to lead by example and do it with kindness and humility,” Canfield said.