Paying it forward, by looking back
An American billionaire just paid off the student loans of students who graduated from Morehouse College on Sunday, May 19, 2019. During his speech to the historically black college, Mr Robert Smith stunned the class of 2019 with his pledge to wipe out their debt, estimated to be worth $40m.
Here are things to know about the black-American billionaire:
• Mr Smith, 56, is the founder of the private equity firm Vista Equity Partners.
• Vista, which focuses on software companies, is now valued at over $46bn according to Forbes.
• Mr Smith’s net worth is estimated to be around $5bn – making him the wealthiest black American, ahead of Oprah Winfrey.
• Mr Smith studied chemical engineering at Cornell University in upstate New York and later received his MBA from Columbia University.
He worked at Goldman Sachs, where he began working with technology companies Apple and Microsoft, among others. He left Goldman Sachs in 2000 to found Vista, and he remains the company’s chief executive.
Mr. Smith is one of the most prominent African-American philanthropists. He’s reported to have donated over $100m to different philanthropic projects.
There a various points of view when it comes to how connected a giver should be to the cause, or to his or her beneficiaries.
As the old adage suggests, should charity begin at home? Or could one engage in philanthropic activity towards a group of people that are in a position of need that simply touches the bottom of one’s heart from a distance? For instance, you’ll never meet those benefitting from relief funds, who are thousands of miles away (as in the case of refugees of war or victims of natural disasters). But in the case of Smith, you can see that many of his chosen causes are close – or closer – to home. He supports a number of causes that have a direct impact on the African-American population.
Smith has demonstrated by his recent actions that he wants to take care of his own – the black population of America – as much as he can, and he hopes that those that benefit from his donations will in turn “pay it forward”.
This is the thinking of a person who feels grateful for his position in life and who, as well as being one of the world’s leaders (in business, influence and power) feels it is his duty to serve those whose positions he may have found himself in.
Who knows, if it hadn’t been for his mentor John Utendahl, Smith’s commencement speaker at the time of his graduation from Columbia Business School in 1994, he may not have been on the path he’s on today. Utendahl was certainly very supportive and instrumental in helping shape Smith’s career and later told FORBES that when he first met him he could immediately tell that he had “a spark, a poise, even a wisdom that you can’t teach or learn.”
Educational and Business Background
Fortune has certainly favoured Smith, who grew up in Denver and who is from a fourth generation Coloradoan African-American family. He decided to move to the east coast to further his education and progress his business knowledge both at Cornell University and Columbia Business School. He used his degree in Chemical Engineering from Cornell and his MBA from Columbia to develop his career and make an impact on the business world. He joined Goldman Sachs from 1994, working there until 2000 where he pioneered the mergers and acquisition process between software and data companies, working with big names like Apple and Microsoft. He then moved on to found the software-focused private equity firm, Vista Equity Partners.
His expertise in the field allowed him to make successful and lasting impacts in the business world due to his diligence and innovation. Vista Equity Partners became one of the most successful enterprise software firms in the world and is now valued at over $40 billion.
The firm focused on identifying companies that have real value and are innovating in unique ways as shown through their mission statement: “We invest in, empower, and grow software, data and technology companies that are reinventing industries and catalysing change”. The success of his company has made Smith one of the most legendary and successful businessmen in the industry.
Back To His Roots
However, despite being the most affluent black businessman in America who surpassed Oprah on a Forbes rich list in 2018, Smith has not forgotten his roots. He champions education, and in his recent speech at Morehouse University where he was being awarded an honorary doctorate degree, Smith pledged enough funds to pay off every graduating senior’s student loans (almost 400 students).
His recent decision will take away the financial pressures from this graduating class of an historically Black-American university, whose debts tend to even more of a burden. The black population are more likely to find it more difficult to pay off their debts and the worry involved and the choices they may have to make to end up debt free would normally not allow them to “follow their dreams, their passions”. Now they can.
Other Acts Of Philanthropy
Smith has contributed an estimated $100 million to philanthropic causes, but this recent contribution to Morehouse University in particular shows his true belief in Vista Equity Partners’ mission statement to offer opportunities for growth. This contribution will alleviate the stress of these students by allowing them to take risks and develop their own careers.
Smith has once again proved that he will stop at nothing to catalyse change and foster innovation that will make a lasting impact on the business world for years to come.
As well as being a champion for education, he has made donations ranging from healthcare (treatment and research for cancers – prostrate cancer in black men and breast cancer in black women), to the performing arts and he was named as one of the Philanthropy 50 by The Chronicle of Philanthropy in 2017.
The 56-year-old billionaire has also signed the Giving Pledge, making him the first African-American to do so. It is a campaign founded by Bill and Melinda Gates and Warren Buffett to encourage wealthy individuals to dedicate the majority of their wealth to philanthropy. In addition to this, Smith is also the president of the Fund II Foundation.
So what’s next, following this huge donation? Is Robert Frederick Smith merely setting an example for other philanthropists to follow, or could it, as FORBES holds, be deemed to be an “example of how philanthropy could be extended on a broader scale to benefit low and moderate income students struggling to afford college?” We certainly hope so, and this can also be applied to Nigeria. That philanthropy dedicated to education as a whole will play a part in the following:
. Actually educating a developing nation like Nigeria who’s facing serious problems in the education sector; and
. In the case of developed countries where students have access to education but who needed to take out loans – as in this case- paying off students’ debts.