The lesson of today’s $100 million gift to Columbia Business School by Columbia MBA alum and investor Henry Kravis? Never underestimate the students who pull Bs and Cs in their classes.
Kravis, who earned his MBA degree from Columbia in 1969 and went on to become the co-founder of private-equity player Kohlberg Kravis Roberts & Co., wasn’t an A student at the school. But he certainly has given an A gift, the largest in the school’s history.
The money will go toward the construction of a sorely needed new home for the business school in the Manhattanville section of New York in West Harlem where Columbia University is developing another campus. In a statement, Columbia said one of the school’s two new buildings will be named for Kravis.
Kravis’ pledge is thought to be the third largest gift ever handed over to a business school. A record was set two years ago when David Booth gave $300 million to the B-school at University to Chicago which renamed the place the Booth School of Business. Booth, a 1971 Chicago MBA, built his investment firm, Dimensional Fund Advisors on principles he learned from Eugene Fama at the school.
Before Booth’s gift, the largest gift to a business school was $105 million, given to Stanford University’s Graduate School of Business in 2006 by Philip H. Knight, founder and chairman of Nike. Other large gifts to business schools include $100 million to the University of Michigan in 2004 from Stephen M. Ross, $85 million to the University of Wisconsin at Madison in 2007 from a combined partnership of 13 alumni, and $60 million to the Darden School at the University of Virginia from Frank Batten Sr., retired chairman and chief executive of Landmark Communications.
“We’re not just constructing a building, we’re building a community of entrepreneurs,” the 66-year-old Kravis said in a statement. In a video on the school’s website, Kravis said his donation will help forge stronger ties between Columbia’s MBA candidates and small business owners in the school’s future home. Columbia Business School is “an incubator for some of the best and the brightest,” Kravis said in the video. “By better connecting Columbia Business School with Manhattanville, we’re not only going to enhance the education of our students, but we certainly are going to enhance and strengthen the community.”
The university, in announcing the gift, said the new campus would “help broaden Columbia Business School’s various community engagement programs, such as Columbia Community Business Program, which provides guidance and support to entrepreneurs in West Harlem, as well as several student-run programs that focus on community outreach.”
“Our new home in Manhattanville will reflect the fast-paced, high-tech, and highly social character of business in the 21st century,” said Dean Glenn Hubbard. “Further, it will allow students, alumni, and neighboring communities to collaborate and develop new ideas that not only transform business practice, but also reinforce the potential for the application of business principles to solve multifaceted problems and improve the world in which we live.”
This isn’t Kravis’ first gift to Columbia Business School. In 2006, he gave $10 million to the business school, which has produced many notable names in private equity and venture capital, including Alan Patricof (class of 1957) and Lionel Pincus (class of 1956) of Warburg Pincus, who died last year.
Kravis jumped onto the pages of business magazines and newspapers when his firm was involved in a historic buyout of RJR Nabisco in the late 1980s. In “Barbarians at the Gate,” Bryan Burrough’s and John Helyar’s 1990 book about the deal, they describe Kravis as a somewhat reluctant MBA student who was less than a star in the classroom.
After earning a bachelor’s degree in economics from Claremont McKenna College in California, Mr. Kravis had an internship at the Madison Fund, a money management firm.
In the fall of 1967, “Barbarians” says:
Kravis enrolled at Columbia Business School and immediately regretted it. He missed the action on Wall Street. His father persuaded him to stick with it, but Kravis called his boss at Madison, a man named Ed Merkle, who let him continue working while he complete his studies. Going through the motions, he graduated two years later, at the height of student riots, with an undistinguished record of Bs and Cs.
Columbia Business School has long been centered in Uris Hall, a 12- story high concrete building that opened in 1964 following protests from architecture students who objected to its design, and Warren Hall, a 1999 facility it shares with the law school. Cramped conditions mean researchers share windowless cubicles and former basement space was cleared out to use as a laboratory.
The Kravis building will be one of two buildings that together will cost about $500 million. That will ultimately make them among the most expensive of recent business school construction projects, according to Bloomberg News. The Massachusetts Institute of Technology’s Sloan School of Management, in Cambridge, opened a $140 million building this year. Stanford University, near Palo Alto, California, will open the $350 million Knight Management Center next year. The Yale School of Management, in New Haven, Connecticut, is planning a $180 million building to open in 2013. The University of Chicago Booth School of Business opened the $125 million Harper Center in 2004.
Kravis’ full statement follows:
Seven years after graduating from Columbia Business School I, with two partners, ventured into the world of small business ownership. The pieces fell into place: we were the right partnership employing the right ideas at the right time. I credit Columbia Business School for giving me much of the knowledge and connections that allowed me — and my company — to succeed.
Right now, Columbia Business School is at a similar inflection point. It has the people, curriculum, research, and ideas of a top business school. Soon it will have the facilities to match.
What is most exciting to me about the move to Manhattanville is that it offers increased opportunities for the School to connect with fellow New Yorkers, especially those who own small businesses in the Morningside Heights, West Harlem, and greater New York City communities. Just as I benefited from my Columbia Business School experiences and connections, I’m confident local business people will too.
The School has long been doing good outside the gates of the Columbia campus, and I’ve been impressed by the many community-oriented programs at the School. Top among them is the Columbia Community Business Program, which supports business growth and development in Upper Manhattan. Other excellent programs include the School’sNonprofit Board Leadership Program, the Harlem Tutorial Program, the Hughie Mills Business Academy, the annual Holiday Party for Kids, as well as local chapters of such organizations as Junior Achievement and I-Prep.
I am inspired by the talent of the School’s faculty members and alumni, as well as students’ potential to effect positive change in the world. I am steadfastly confident that they can fulfill to that potential, never more than right now, with the promise of a new home in Manhattanville.
This move will — for the first time — bring the entire School together under a single roof, and it is with great pride that I pledge my support for the campaign.