Dear Winner of the Mega Millions Jackpot Lottery:
Congratulations, and WOW!
At a record $1.6 billion, even after federal and state taxes (according to USA Mega), you’ll be pocketing a whopping $643 million or so. Not bad for dropping a few bucks on a Slurpee and a “Quick Pick” ticket at Cumby’s.
By now, you’re probably already hearing from a steady stream of lawyers, realtors, financial advisors, charities, and relatives you didn’t even know you had.
I realize you have a lot of choices to make right now about how to invest, donate, and spend your newfound fortune, so let me help you out just a little bit by making one of those decisions easy:
Donate a million bucks to a college where it will really do some good; and while you’re at it, forget about Harvard and consider Northern Essex Community College.
Or Roxbury Community College, Bunker Hill Community College, or Springfield Technical Community College.
Any community college, really, anywhere in Massachusetts or across America. We all have needy students; it just happens that these four have some of the poorest student bodies among the 114 colleges and universities in the Commonwealth.
About a quarter of our students come from the bottom fifth of family incomes, earning $20,000 or less a year, while less than 10% come from the top fifth, earning $110,000 or more a year.
Meanwhile, according to this article in the Boston Globe today, rich students at Harvard University outnumber low income students 23 to 1.
No, that wasn’t a typo. At Harvard, only about 3% of students come from the bottom fifth of family incomes, while 70% hail from the top.
What Your $1 Million Will Buy at Harvard
Harvard University’s endowment, already the largest in the world, grew 10% last year to $39.2 billion.
So, if you did decide to write them a check, your $1 million donation to the Harvard Crimson would increase the vaunted university’s endowment by a barely noticeable .000025 percent.
That’s not a major gift—it’s a rounding error.
The approximate cost of attending Harvard, including tuition, fees, and books (but not room and board) is $52,000 a year. Since the overwhelming majority of Harvard’s students come from wealthy families, they do not receive need-based federal or state financial aid. However, thanks to its enormous endowment, the university itself offers generous financial assistance to about 55% of its students. The rest pay full freight.
As a result, the average Harvard student, allowing for some merit-based, athletic, and legacy scholarships, pays about $35,000 a year out of pocket.
Assuming a generous 5% average rate of return on the $1 million you sent Harvard, your donation would generate about $50,000 a year and cover the cost of 1.4 already pretty well-heeled undergrads (who are probably the third or fourth generation in their families to attend college).
What Your $1 Million Will Buy at Northern Essex Community College
NECC is recognized as a “public” college in the state of Massachusetts; but the reality is that only about a third of our funding comes from the Commonwealth. Student tuition and fees, along with grants, fundraising, and creative revenue sources like corporate training and facilities rentals make up the rest.
We are two-thirds private.
And, like most community colleges, we have a relatively modest endowment—exactly $3,541,182 as of this afternoon.
That means your $1 million donation to the NECC Foundation will increase our endowment by nearly 30%.
That’s a game changer.
The approximate cost of attending NECC, including tuition, fees, and books (we don’t have dormitories) is around $6,800 per year.
The majority of our students come from low-income backgrounds. Just over half apply for and receive financial aid each year, and most are eligible for sizable awards from the federal government known as Pell Grants, in addition to state aid known as Mass Grants.
The amounts of aid vary by the communities NECC serves. For example, in Haverhill, where there is a mix of low-income and middle-class families, students typically receive about $5,400 in aid, leaving them with an annual bill of $1,400 or so.
Ten miles down the road in Lawrence, where more students come from impoverished families, they receive about $6,300 in aid and spend about $500 a year out of pocket.
That means the $50,000 your $1 million gift generates each year will cover the total cost of an associate’s degree for a few dozen students in Haverhill, or about fifty in Lawrence.
But wait, it gets better.
According to the “Equality of Opportunity Project,” a national study of social mobility based at Harvard University, NECC is one of the most successful higher education institutions in Massachusetts at leveling the playing field: After their education, 20% of our students move up two or more income percentiles and find careers, incomes, and lives for themselves better than where they started.
Harvard itself? Only 11%.
All those students who complete associate’s degrees at NECC can expect to earn around $10,000 more per year than high school graduates, or around $400,000 in a lifetime—more than enough to buy a home—and a piece of the American Dream—in Haverhill or Lawrence.
And just one more quick piece of math: Your $1 million is helping between 35-50 students every year earn their degrees. Over the next forty years, that’s up to 2,000 students, all improving their livelihoods and their lives by $400,000 or more, for nearly $1 billion in additional income.
Their children are almost certain to go to college, too, breaking the vicious cycle of generational poverty; and helping to lift up the entire community.
Down in Cambridge, your name, lucky winner, may appear in small print as a footnote in the annual ledger of thousands of dutiful donors.
But up here in the Merrimack Valley, where a million dollars still means a lot, your name will be in the hearts and minds of the thousands of people whose lives you’ve changed for the better.
And if you’re interested, we’ll even name a building for you—take your pick.
Congratulations again, and may you invest wisely.