About a year ago, private equity billionaire Robert F. Smith broke script during his commencement address to Morehouse College and pledged to pay off student loans for every member of the graduating class of 2019—valued at an estimated $40 million.
The news went viral and, as I wrote at the time, it was an especially critical donation for a group of HBCU graduates who face disproportionately high college debt. Smith is now reportedly working on an initiative with former IRS commissioner Fred T. Goldberg to eliminate the student debt burden for all African Americans who study STEM at HBCUs going forward, per CNBC.
For many outside of the finance world, this was their first introduction to Smith, 57, the world’s richest black American and founder of Vista Equity Partners. With a current net worth of $5 billion, Smith has also emerged as one of America’s biggest philanthropists. And as the first black American to sign the Giving Pledge, this is just the beginning.
We often write about how philanthropy—and philanthropists—can influence each other’s giving. This was part of the spirit when Bill and Melinda Gates and Warren Buffett first launched the Giving Pledge, forming an in-crowd of people trying to achieve social good with their outsized wealth. Donors and foundations are frequently either following each others’ leads, teaming up on initiatives, or trying to outdo one another. But when a black Wall Streeter wipes out the debt for an entire college class, we don’t consider how Smith’s philanthropy might also influence other black Americans who’ve hit rarefied air in finance.
Consider recent news in the midst of another graduation season, albeit a very different one. Businessman Frank Baker and his wife Laura Day Baker recently made a $1 million gift to Spelman College, the Atlanta-based HBCU for women. The funds will initially pay for the existing spring tuition balances of nearly 50 members of Spelman’s 2020 graduating class. Subsequently, the scholarships will provide support to ensure that future high-achieving graduating seniors have the financial resources to graduate.
Baker said the donation was inspired by Smith, who wrote on social media: “So proud of my brother Frank Baker and congratulations to the Spelman Class of 2020!”
The Bakers address the particular importance of stepping up for marginalized young graduates in the midst of the pandemic, stating in a press release: “We are all aware of the headwinds that people of color—especially women—face in our country, the challenges of which are made even more apparent by the economic and health impact of the COVID-19 pandemic… We believe it is critical that talented women finish college and confidently enter—free of undue financial stress—the initial stage of their professional careers.”
But who exactly is Frank Baker, and where is this gift coming from?
University of Chicago alum and Harvard MBA Frank Baker got his start, like Smith, at Goldman Sachs. He was a managing director at Ripplewood Holdings LLC, a global private equity firm, and went on to co-found Siris Capital Group, a middle-market private equity firm focused on deep value, controlling equity investments around special situations in the telecom, technology and technology-enabled business service sectors.
Here are a few key things we know about their latest donation, and what we might expect from the family’s philanthropy down the line.
1. A Focus on Education
In their 40s, the Bakers do not yet appear to have a formal charitable vehicle. They’re based in New York, where Laura works as an interior designer and entrepreneur. So far, some giving has tracked with institutions where the family has a personal connection. In 2016, the Bakers made a $7 million gift to the University of Chicago to endow undergraduate scholarships and internships for lower-income students. The funds support the Frank Baker and Laura Day New Leader Odyssey Scholarships and New Leader Odyssey Internships.
Baker is also a board member of Sponsors for Educational Opportunity (SEO), a free, eight-year academic program that helps low-income public high school students graduate and get through college. Baker has a personal motivation, as he was a student with SEO and graduated from the program in the early 1990s.
2. Racial Equity Is a Key Concern
When the Bakers made their big gift to the University of Chicago, Baker said, “My parents always emphasized the importance of giving back to our community. As a student at the college, I set a goal for myself to help students like me, students of color, to have the transformational experience of a UChicago education… Laura and I hope that through our gift, we can inspire minority students to be leaders in their chosen fields.”
It appears that at least for now, education is one key way Baker sees himself leveling the playing field.
Baker is also involved with the United Negro College Fund and has spoken about the importance of HBCUs. Additionally, he’s talked about issues of diversity in STEM and has served on the board and supports All Star Code, which “provides young men of color the skills, networks and mindsets they need to succeed in tech through our coding and computer programs.”
3. This is Likely Just the Beginning
It’s unclear how much he’s worth, but Baker and his family are still in the early stages of their philanthropy. Many Wall Street Givers we profile don’t start ramping up their giving in earnest until their 50s and 60s, often through endowed family foundations. If Baker is to continue to follow in the footsteps of Robert F. Smith, we can expect a lot more sizable donations and even some new philanthropic interests to emerge in future years.
Finally, while HBCUs generally tend to draw less support from large donors and foundations than other universities, we should be on the lookout next graduation day, as Smith and Baker may be inspiring new donors to take on the student debt crisis at these critical institutions.