Thursday, September 11, 2014

The surprisingly affordable price of elite school naming rights

The big news at Harvard this past week was that a $350 million donation to the Harvard School of Public Health sufficed to rename the school the Harvard T.H. Chan School of Public Health.

Obviously, $350 million is a ton of money. On the other hand, this proves that the price to rename a school at an elite university like Harvard is not infinite, and in fact is quite affordable for many of the ultra-wealthy, such as the 1,645 billionaires in the world.

If a gift must be financially transformative in order to earn naming rights, and the amount that would be transformative for a school is proportional to its endowment, then note that $350 million is 30.9% of the Harvard School of Public Health's 2013 endowment value of $1.134 billion. With that multiple in mind, here are estimates for the price of naming rights to Harvard, Yale, and Stanford's big-money schools for which I could find endowment values (caveat emptor: not all endowment values are coming from the same year, and some endowment values are a few years old):

Harvard Faculty of Arts and Sciences: $14.3 billion * 31% = $4.4 billion
Harvard Medical School: $3.0 billion * 31% = $930 million
Harvard Business School: $2.9 billion * 31% = $899 million
Stanford School of Medicine: $2.1 billion * 31% = $651 million
Yale School of Medicine: $1.8 billion * 31% = $558 million
Harvard Law School: $1.7 billion * 31% = $527 million
Stanford Graduate School of Business: $1.24 billion * 31% = $384 million
Yale Law School: $1.0 billion * 31% = $310 million
Yale School of Management: $591 million * 31% = $183 million

As I said, billionaires, quite affordable!