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The benevolence of billionaires is a thing to behold. These ten to twelve figure plus bank account holders have more than is necessary to live multiple lifetimes. Their ability to donate, exchange, and share funds based on their enormous fortunes is a sign that the government ought not be in the business of granting loans (in the future) among a whole host of other functions of the federal, state, and, city agencies.
But the real ideal behind businessmen and women is how they got the dollars to dole out in the first place. These special people who make the world twirl on its axis had to strive, struggle, and persevere through adversity. Yet that didn’t stop them nor define them. And if they’re the descendants of money in places like the United States, that wealth was generated by sweat equity and perfectly aligned balance sheets.
So, for Mr. Robert F. Smith to gift, to the graduating class of 2019 at Morehouse College, $40 million to clear off all of the debt, it is a gesture of supreme pride not humility. It is a selfish and thoughtful action on Smith’s part.
It ought to be mentioned how he was able to extend this kind of money. Philanthropy or love for humankind began in Smith’s career with his first dollar. Vista Equity Partners is his primary source of income now, but the man has worked Goodyear Tire and Company and Kraft General Foods. He also produced for Goldman Sachs during his early stages. But back to Vista Equity Partners. The best way to explain what part of this company does is to view the film Other People’s Money (1991). Private equity companies take struggling firms, break them up, and sell off the assets to make a profit. It’s what 2012 Republican presidential nominee Mitt Romney does, only he failed to explain the whole premise, too. It's one of the most proficient and efficient ways to conduct business.
For Mr. Smith’s role as principle founder, chairman, and chief executive officer, the reason why he is enabled to grant this piece of his fortune is of all of the work that he went through building, making, and creating his private equity and venture capital firm.
For his role as a captain of industry and worth a cool $5 billion, Robert F. Smith will be amongst the great American businessmen, not because he’s giving away chunks of his riches, but because he generated these funds in the first place. His greed to always strive for providing more capital to fund his business has allowed him to offer a portion of his wealth to deserving individuals.
Smith didn’t just see a beggar on the street and toss him $40 million in alms. He recognized that these are freshly college educated men who deserve to have their debt burdens lifted by private means. But without the keen mind for a deal and the shrewd attentiveness before a transaction, that money would not exist. Each penny had to be produced based on the rationality of Mr. Smith and his associates.
He has developed a name for himself upon granting this money. While some may remember that he covered the March issue of Forbes magazine in 2018, that’s not all that he’s known for right now. Otherwise, the name Robert F. Smith has been relatively obscure. So it took an act of rational self-interest for the country and the world to recognize one of the most productive business minds in history. His talent and knack for being able to close deals and choose what companies to invest in sculpts a figure of a man about billions. His wealth is a symbol of all of the smart work that has gone into his endeavors over the years. Smith has displayed his business acumen in freeing up the student debt, as this may be a tax write-off for him. The only thing is, what will other commencement speakers say to the graduating classes of the future? Of course there will be comparisons to Oprah and the speakers will most likely weave jokes regarding the whole affair.
But that shouldn’t deter anyone of financial capability to commit a benignant action like Smith’s. Students the nation over will be like nine-year-old girls biting their nails in anticipation for a speaker to say that “you’re all debt free!” Even if that does not come to pass, it is still important to place the premium on how the money was made and not how it was distributed.