Will $1.8 billion for tuition lift Baltimore?

To get an idea of the magnitude of the sheer dollar figure, it helps to not only compare the $1.8 Bloomberg gift to Hopkins to amounts that were previously donated, relate it to known quantities but check out what it means for Baltimore. The number is a bit more than half of the entire Baltimore City budget of 2019 and almost three times its capital budget. Tuition at Johns Hopkins has become so expensive (about $53,000 annually), that the donation would only pay the tuition of all students (about 24,000) for one year and 5 months. Of course, this isn't how the gift will work.

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If the entire pot would be put into savings with 3.5% interest it would yield $63 million a year, enough to pay the full tuition for 1,190 students each year, or full freight for about 5% of all students.  Of course, that isn't how it will work either. For large sums like this endowments are created which allow higher yields than a simple savings account (Harvard's endowment yielded 10% in FY 18). Besides, financial aid doesn't have to pay the full tuition. With the gift included, John's Hopkins endowment is with $5.6 billion still only a fraction of the endowments of Stanford ($24.8 billion), Yale (27.2 billion) or Harvard ($39.2 billion). So what's big in one context is little in another.

Baltimore attracts graduates: Graphic from Allan Mallach
  "The Divided City",  Poverty and Prosperity in Urban America

But there is little precedent for how effective such a large pot of money would be if solely devoted to financial aid, which is why everyone is speculating about the impact of the donation on the university, on Baltimore and on equity in education.

Some consider it a waste of money, because the the track record of attracting poor kids to elite schools with lots of money is bad, even if they offer lots of financial aid. For the class of 2013, only 4.5 percent of Harvard students and 4 percent of Stanford students came from the bottom fifth of the income distribution. By contrast, 15 percent of Harvard students and 17 percent of Stanford students came from the top 1 percent.

When colleges review applications, all but a few consider a student’s ability to pay. As a result, high-achieving applicants from low- and middle-income families are routinely denied seats that are saved for students whose families have deeper pockets. This hurts the son of a farmer in Nebraska as much as the daughter of a working mother in Detroit. (Michael Bloomberg in an op-ed about his donation in the NYT)

There is also the question, what else $1.8 billion could buy in education. 

“the vast majority of low-income high achievers do not apply to any selective college.  This is despite the fact that selective institutions typically cost them less, owing to generous financial aid, than the two-year and nonselective four-year institutions to which they actually apply” (Caroline Hoxby, Stanford and Christopher Avery, Harvard)

Putting the money into institutions for which lower income actually apply and which still provide good success rates in graduation and upward mobility would mean money should go to Morgan State, the University of Maryland, Towson State or community colleges.

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Additionally, one has to wonder if an effective intervention in education doesn't have to begin long before college. The Bloomberg money won't do all that much for better education if it is limited to only the brightest minds in the nation (based on tests and grades) and only serves the purpose to gather all those bright minds at Bloomberg's alma mater.  As the Bloomberg School of Public Health has studied ad infinitum, educational success does not begin with college. For the best minds to even look for college at the end of highschool, education has to begin early. Headstart is such an effort, free daycare for all would be a step, so would many more. Ultimately, though, educational intervention can only be successful when it works in tandem with housing and jobs, the two elements that will lift not only a bright child but its entire family setting.

College is a great leveler. Multiple studies have shown that students who attend selective colleges — no matter what their family’s background — have similar earnings after graduation. But too many qualified kids from low- and middle-income families are being shut out. (Michael Bloomberg in his op-ed in the NYT)

The large gift to Hopkins coincides with Antero Pietila's book release: " the Ghost of Johns Hopkins", a detailed investigation into the roots of the university, the hospital and the character of its founder. I typical Pietila fashion, the book is not only the story of Johns Hopkins, but also the story of Baltimore and how the fate of both have been closely intertwined. In this combination the equity question looms large.

In his latest book Pietila uses Johns Hopkins as the lens to focus on the high and mighty who pulled the strings and shaped Baltimore. He weaves the dealings of luminaries, power brokers, hustlers, police, and even Russian hackers, into a captivating story about his adopted hometown. Covering 200 years, the book ranges wide and far until a comprehensive picture emerges in which heroes and villains are thoroughly intertwined. Many strands lead to Johns Hopkins, the person, the university and the hospital bearing his name, adding up to what is today a 'global premium brand.'" (Klaus Philipsen,  author of Baltimore: Reinventing an Industrial Legacy City on the rear book cover)

 In this vein an understanding of the impact of the donation needs to take more than the university into account. This large gift to Johns Hopkins university allows some bigger conclusions:

• Foundations play an ever larger role in public life in the US 
• More than ever the country's richest men (the richest people are men so far) use their philanthropy to shape the nation
• Johns Hopkins, Baltimore's and Maryland's largest employer and business will attract even more talent but is still far less rich than other elite private universities
• Equity has become a central topic not only as a conference topic but also as an investment channel

Graphic from Allan Mallach
  "The Divided City",  Poverty and Prosperity in Urban America

With all the talk about the renaissance of manufacturing, many people overlook the fact that Johns Hopkins now employs more people and is a bigger economic engine for Baltimore than Bethlehem steel has ever been here. Eds and meds has surpassed Baltimore's industrial legacy on almost all counts, except one deciding factor: It leaves out the lower education and income levels leading to the well known aspect of the divided city.

While Hopkins is a big engine, it isn't the most relevant place to educate Baltimore's youth and the large gift will hardly change this.

Focusing on Baltimore in a more general way, there are three transformative elements which are needed to lift those who were neglected in the current economic boom: Education, housing and jobs, probably in this order. In that sense, providing access to education to larger segments of the population is key. But does it make sense to increase that access to one of the most expensive schools in the country if there are vastly cheaper colleges available which truly could accept large numbers of students and benefit far more from additional especially talented students. Past studies show, that access and upward mobility does not reside with elite universities.

Baltimore as a Bloomberg City is likely getting this advice from the philanthropy as well. So far, it doesn't look as if the City's efforts in each area add up to this convincing image which Detroit of all places, has been so successful in projecting lately.  However, instead of bashing the Mayor and public officials for what seems to be daily chaos, we should help to make things add up in the right way. Cynicism and absence from public engagement won't do anything good. In fact, what is needed is the opposite: What is needed is that as many organizations and individuals find a common base of agreement on what the main focus areas should be.  Nothings hurts Baltimore more than its extreme fragmentation and tribalization. 

No Bezos, Bloomberg or Plank can be or should be a savior, no matter how rich they are and how much money they throw at a problem. But that Baltimore and its institutions are on the radar should make it easier for the community to come together and develop an achievable blueprint for real transformation.

Klaus Philipsen, FAIA