An Interview With Columbia Business School Dean Glenn Hubbard

One of your most famous alumni also happens to be one of the wealthiest men alive. Have you asked Warren Buffett for money?

You know, Warren is close to the school. He visits and sees our students. And he says amazing things. He says that Columbia Business School changed his life. It’s terrific. But that’s not going to happen.

Is that because Buffett doesn’t see the social value in a business school?

I think what we are doing makes a social difference. I think people who go out and create wealth are a noble thing. I often sit with donors who say they would rather give to the hospitals or the medical school and I talk them out of it–not because I don’t think giving to medicine is not valuable but we are valuable, too. It’s not just minting investment bankers. That’s not what our life is about.

I have made this argument to Warren. I have made so many arguments to Warren. One of his points was, ‘I invest better than you and so I want to hold the money.’ And I said, ‘Well I have a great deal for you, Warren. Just give me stock. I won’t sell it. I will hold it.’ He said, ‘You’re good but you’re not that good.’

Our two biggest gifts, one came from Henry Kravis (founder of the leveraged buyout firm KKR) and the other I haven’t announced yet because we haven’t worked out the public relations. It’s not from an alum but rather a close personal friend. He’s very prominent in the city, believes in the project for New York. Friends like that are definitely worth having.

Henry bought into the thesis that this was for transformation for the school and it really was a transforming moment for the university. If you are on the Columbia campus, you sense that we are out of space. Nobody has space. I give (Columbia University President) Lee Bollinger huge credit for thinking why are we doing incremental things when we can try to change our equation. It is going to cost a lot of money. It’s going to be transformative. I wish it were done. It’s not.

What’s the hardest part of asking people for big money?

I think it’s easier to ask people for big money than small because with big money you know the person has enormous capacity and second it really is about values and dreams. If they share your values, they believe they can make a big difference and they can. When you are very rich, you can make a big difference if you choose to do that. I find it a very rewarding part of my job. You really are selling the story of the school and making friends who can help to do that.

We are more tuition dependent than Harvard or Stanford. It covers maybe two-thirds of our budget. The rest has to come either from endowment income or fundraising. So even if somebody says to me, ‘I paid the cost of my education,’ I say, ‘Oh really? No way. You paid two-thirds. Some alum either wrote a check or we got income on the endowment and that is where the other third came from.’  At Stanford, it’s more like 50-50. And at Harvard, I think the MBA tuition is not even 20% of revenue. They could almost give it away.

One of the biggest conflicts I have in fundraising is that while I know we have to finish this building, we have got to have more financial aid. The schools we compete with most closely on the East Coast are Harvard and Wharton. On financial aid, we are not going to match Harvard in my lifetime. But we have got to match Wharton and it is substantially bigger.

Where is Columbia in comparison to them on financial aid?

We are probably a third under Wharton’s financial aid budget and a fraction of Harvard’s. Harvard is just way in a different league.

Harvard Business School recently disclosed that its average fellowship aid last year essentially discounted tuition for half the student body by 58%.

For us, that number would be 10%. When we are trying to assemble a class, we do want it to look a particular way. So we have in mind the right male/female mix as well as having the best students from different parts of the world. I would be naïve if I didn’t think we were losing people who couldn’t afford it. I want the best people to Columbia. I don’t care if they are rich or poor. So financial aid is extremely important in making that happen.

One of the issues for donors is that it is not always about need. So that can be a harder sell. You hear them say, ‘Wait a minute. You want me to write a check so you can give someone who doesn’t need money a chance to go work for Goldman Sachs?’ It’s a tougher fundraising sell than the building. But we want the best athletes in class. What that does is make our classroom experience better and it makes our alumni network better. So yes, I do want that money. But we do have work to do there.

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