You’ve heard me mention the name Raj Chetty once or twice or 47 times over the last decade. And you’ve heard the name of hedge fund guy / dissident donor Bill Ackman this month. But I didn’t know:
From RajChetty.com:
Raj Chetty is the William A. Ackman Professor of Economics at Harvard University and the Director of Opportunity Insights, which uses big data to study the science of economic opportunity: how we can give children from all backgrounds better chances of succeeding?
Here’s a long snarky New York Times news article about Ackman and his disagreements over the years with Harvard while still dumping loads of money on them.
Bill Ackman’s Campaign Against Harvard Followed Years of Resentment
The billionaire investor has mounted a high-profile battle against Harvard president Claudine Gay over antisemitism and threats to Jewish students on campus, but long-held personal grudges play a part, too.
By Maureen Farrell and Rob Copeland
Dec. 12, 2023In the two-month battle over the fate of Harvard’s president, the billionaire investor William A. Ackman has cast himself as a protector of Jewish students and the standard-bearer for people who believe colleges have fostered a hostile atmosphere for critics of liberal orthodoxy.
But behind his anger are personal grievances that predate the uproar that has engulfed campuses since the Oct. 7 attack by Hamas on Israel and Israel’s subsequent invasion of Gaza. Mr. Ackman, by his own admission and according to others around him, resents that officials at his alma mater, to which he’s donated tens of millions of dollars, and its president, Claudine Gay, have not heeded his advice on a variety of topics. …
He has given tens of millions of dollars over the years to Harvard, but does not rank among the top donors at a school that has landed numerous nine-figure donations. His largest gift dates to 2014, when he and his former wife announced a $25 million donation to expand the economics department and endow three professorships.
But the Times doesn’t mention Raj Chetty’s name in this article, despite the Times mentioning the superstar economist’s name in 136 other articles. That would be too interesting.
Two years ago, in an incident not previously reported, Mr. Ackman told members of Harvard’s fund-raising team he might not give another dime because they hadn’t heeded his advice on how to invest an earlier donation, said two people with knowledge of the exchanges. Mr. Ackman sent off a series of fiery letters to Harvard administrators questioning their financial acumen. He wound up donating more money anyway.
Once again, that was a dispute over the financial mechanism used to build Chetty’s empire, such as having Sir Norman Foster design Chetty his own building on the Harvard campus. Dragging in Chetty’s name would be too Off-Narrative: after all, Chetty is a Good Guy and, at the moment, the Democratic donor Ackman is a Bad Guy, so why complicate things when NYT subscribers don’t pay for complexity, they pay for more reasons to hate the Bad Guys they already hate? So the Times keeps the story blander.
Here’s Ackman’s account of the complicated dispute over how to pay for Chetty’s organization.
In 2017, I was in the middle of a divorce, Pershing Square had gone through a large drawdown, investors were redeeming, and it was a very challenging period of time in my life.
In the midst of my personal and business challenges, I got a call from Harvard with good news. Harvard had been able to recruit Raj Chetty from Stanford and it needed money to fund his chair.
I had previously funded a $25 million initiative to recruit the best behavioral economists in the world to Harvard. Raj is considered one of the best economists of his generation and a likely candidate for the Nobel Prize. He was a key recruit to the initiative we had launched, the so-called Foundations of Human Behavior. It was important to me that I could fulfill our long-term plan to recruit him despite my difficult personal circumstances at the time.
The problem was that I had no liquidity as my divorce consumed more than all of it (I had to borrow a lot of money) and my business was in a bad place. But it was very important to me to recruit Raj. I knew Harvard could find the money from someone else, but I wanted to fulfill my original plans for the Foundation of Human Behavior initiative.
It was important enough to me that I agreed to give Harvard stock in a private venture-backed company that I expected would be worth many multiples of that value in only a few years. I had previously given five or six chairs to Harvard, but this is the only one that carries my name, such was its importance to me at the time.
I entered into an unusual development agreement with Harvard to address my concern about giving away private stock that was likely going to be worth much more in the future.
Anyway, blah, blah, blah, Ackman gave Harvard some stock in one of his new ventures to make Chetty’s dreams come true, but told Harvard not to sell it because it would be worth much more someday. And he entered an agreement with Harvard that he’d get to pick the Harvard projects to be funded by the capital gains on the stock. And the stock’s value did go through the roof, just like he said. But then he found out that Harvard had already sold it at a fire sale price during the March 2020 COVID panic and not told him.
So, he’s mad over that.
