Technology investor Robert F Smith has promised to pay off the student loans of the graduating class of Morehouse College, the historically black college in Atlanta, urging students to challenge racial injustice and seize the American dream.
The billionaire benefaction, announced to bewildered students at a graduation ceremony on Sunday, is the latest in a flurry of unconventional donations that bypass philanthropic institutions and aim at individuals directly. Last week British entrepreneur Julian Richer handed control of his eponymous hi-fi retailer to 500 of the company’s staff.
A former chemical engineer, Mr Smith has overtaken Oprah Winfrey to become the richest African American, according to Forbes, amassing a $5bn fortune since leaving Goldman Sachs in 2000. His pioneering approach to financing software companies took private equity investment into untrodden ground, and made the firm he created, Vista Equity Partners, one of the biggest and most successful in the world.
Delivering a valedictory address at the college, Mr Smith exhorted risk-taking and hard work, and invoked an optimistic vision of a high-tech economy in which the key to success was intellectual capital rather than inherited wealth.
The right response to America’s faltering progress towards racial equality, he said, was not to be bitter, but “to make things better”.
“When I meet a black man or woman who’s at the top of their field . . . there’s a good chance it took that black leader a whole lot more grinding to get them where they are today,” he observed.
And he sprung a big surprise.
At first, the begowned audience did not seem to understand that the man at the lectern had arrived at their graduation send-off with a contribution more valuable than motivational words. “We’re going to put a little fuel in your bus,” Mr Smith explained.
As students grasped that they were to be the recipients of his family’s estimated $40m grant, they applauded, cheered, and invoked an American sporting chant to declare him a “most valued player”.
Billionaire philanthropy has become a more prominent trope in American capitalism since Microsoft founder Bill Gates joined forces with investment guru Warren Buffett to promote the “Giving Pledge”, whose signatories vow to donate half their wealth to charity.
Mr Smith, who signed the pledge in 2017, urged Morehouse alumni to follow the example of Sunday’s gift.
“We are enough to take care of our own community,” he said. “We are enough to ensure we have all the opportunities of the American dream.”