In brief
- Penn describes the gift as its largest crypto donation ever
- But the gift also raises the question of how universities handle assets that are highly volatile
The University of Pennsylvania announced on Thursday that an anonymous donor has given its prestigious Wharton Business School a $5 million Bitcoin donation, which it will use to fund programs related to innovation in finance.
The Ivy League school says this is the largest cryptocurrency donation it is received to date, though a spokesperson told Decrypt the school only began accepting crypto donations at the start of 2021. Such gifts must be at least $10,000 to be accepted.
While cryptocurrency is becoming an increasingly popular form of philanthropy in higher education—Penn's fundraising page now includes a crypto link alongside options to donate in cash or stock—it's not clear how schools manage such a volatile asset.
While Penn is touting the donation as worth $5 million, that gift could have quickly shrunk to $3 million during this week's market implosion if the school had accepted the Bitcoin earlier this month and held onto it
In response to a question about how Penn would handle the volatility problem, the spokesperson cited the school's VP of Development and Alumni Relations, John Zeller, who said his office typically sells cryptocurrency the moment it is received. Zeller also suggested the school had taken steps to ensure the donation would not shrink in a market downturn.
“There is protection for us on the downside. We have what we needed to support the budget, and we’ll just see where it goes in the future," he said in a statement, which did not elaborate on what this downside protection might entail.
There is no official list of crypto donations to universities, but a 2018 Bloomberg survey reported that Cornell, Berkeley, and MIT began accepting crypto that year.
Some notable gifts include Ripple founder Chris Larsen's $25 million XRP donation to San Francisco State University in 2019—described at the time as the largest digital asset donation to higher education—and a gift of 14.5 Bitcoin in 2014 to the University of Puget Sound in Tacoma, WA. The latter donation, worth $10,000 at the time and around $500,000 today, was reportedly the first of its kind.
Large gifts, such as the one Wharton received from the Bitcoin donor, are often converted into an endowment used to fund programs or professorships for multiple years.
Penn's President described the work of the Wharton unit receiving the funds as "at the intersection of finance and technology."