The University of Chicago Graduate School of Business announced yesterday that alumnus David G. Booth (MBA ’71) recently donated $300 million to the school, the largest donation in the university’s history and the largest gift ever to a business school. In recognition of his generosity, the school will be renamed the University of Chicago Booth School of Business.
Booth, the founder and chief executive of investment firm Dimensional Fund Advisors, built his firm and his fortune on the finance principles he learned at Chicago. His first course there, taught by Professor Eugene Fama, was life-changing, he said. Fama is the founder of the efficient market hypothesis, which states that investors do best by buying and holding widely diversified portfolios, the basic thinking behind index funds.
“I remember Professor Fama standing up the first day of class and saying ‘This is the most practical course you will ever take,’ and it turned out to be true,” Booth said in a statement announcing the historic gift. “We built Dimensional Fund Advisors around his set of ideas. I am hoping that others will join me in giving back to this amazing business school,” he continued.
The gift, which includes an upfront payment, an income stream from shares in Dimensional Fund Advisors’ parent company and equity interest, will help fund several new initiatives, including an aggressive push to attract and retain star faculty.
The school also will consider adding new faculty groups in academic areas not normally associated with business schools, expanding existing research centers and exploring ways to more ambitiously leverage the school’s intellectual capital. The school’s international presence, too, could grow beyond its existing campuses in London and Singapore.
School officials expressed tremendous gratitude to Booth and lauded the decision to rename the school in his honor. “Given the profile of our school and its role in the world, it is imperative that the person who names the school embodies its values and, moreover, is a person who is of great integrity and who commands respect,” Edward Snyder, dean of the business school, said in a statement. “In David Booth, we have a person who exceeds all the relevant criteria.”
Booth’s gift is almost triple the amount given to Stanford University’s Graduate School of Business in 2006. That $105 million gift, made by Nike founder and chairman Philip H. Knight, had been the largest ever to a business school. Other notable 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.
To read more about Booth’s $300 million donation to the University Chicago, click here.
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