Innovation Hub director witnesses viral story of $40 million gift to Morehouse College graduates

by Wesley Brown ( 820 views 

Innovation Hub director and Morehouse College graduate Chris Jones

Last week, Pine Bluff native Chris Jones had no idea his trek to Atlanta for the 20th anniversary celebration of his graduating class at Morehouse College would be part of a feel-good story that has caught the attention of the nation.

Jones, a nuclear engineer and executive director at the Arkansas Regional Innovation Hub, was a witness to Sunday’s announcement at Morehouse by black billionaire and venture capitalist Robert Smith that he would pay off the student debt for the entire 2019 graduating class at the prestigious, all-male historically black university, or HBCU.

Jones told Talk Business & Politics he traveled to Morehouse not only for a reunion with his fellow 1999 graduates, but to participate in the commencement ceremony where Smith was the speaker. Jones said he was in one of the last classes at the highly regarded HBCU to receive a full scholarship valued at nearly $50,000 annually for tuition and room, board and other fees.

He said the announcement by Smith, a Goldman Sachs and Wall Street-trained investment banker, left students, alumni and family members stunned and wide-eyed.

“I think initially folks didn’t believe it,” said the lead maker at the nonprofit Innovation Hub. “It’s great for the students but look at what it will do for the families and to their kids and to their kids’ kids. There are fathers and mothers who took out mortgages, and now they don’t have that worry. This will resonate for several generations and give these kids the freedom to choose their own paths.”

Jones wondered amid the ongoing debate concerning the nation’s massive student loan debt that has been reignited by Smith’s generous gift and the 2020 presidential race if other wealthy philanthropists and billionaires will step up and help students like those at Morehouse College.

“It could be a gamechanger,” Jones said. “Do you think any Arkansans will step up and do something similar?”

For anyone who has not heard the viral tale yet, Smith’s unplanned announcement during his Morehouse commencement speech promised he would cover the debt of the nearly 400 members of the Morehouse graduating class through an endowed gift worth $40 million.

That story has spread across social media like wildfire, making “Morehouse College,” “black billionaire” and “Robert Smith” some of the most searched phrases on the Internet. The viral story has also led to new debates on everything from the social responsibility of the nation’s wealthiest people to the potential doomsday financial impact of the $1.6 trillion student loan debt bubble.

Among the more famous Morehouse alumni are civil rights icons Martin Luther King Jr. and Julian Bond, Hollywood actor Samuel L. Jackson and movie director Spike Lee. The private HBCU, founded in 1867, is one of the few remaining traditional men’s liberal arts colleges in America, producing two Rhode Scholars and offering world-class STEM degrees in science, technology, mathematics and engineering.

Coincidentally, Jones said when his class graduated from Morehouse 20 years ago, another pre-eminent black billionaire was the commencement speaker – Oprah Winfrey. According to Forbes, Smith and Winfrey are, respectively, the two richest black billionaires in America.

“It’s crazy. We had a black billionaire at our commencement, and we come back 20 years later, and we have another black billionaire,” he said. “She gave scholarships to over 400 people. At the end of the day, it doesn’t matter. What you have is a group of black men with a [prestigious] degree and no debt. That’s powerful.”

Almost as stunning as the multimillion-dollar gift to the Atlanta HBCU, Jones said, was the fact that most were unaware of Smith’s success as founder, chairman and CEO of Vista Equity Partners, one of the nation’s leading middle market, private equity firms with offices in Austin, Chicago, New York City, Oakland and San Francisco.

Altogether, Vista has invested $46 billion in more than 50 companies in the software, data and technology space that employ more than 60,000 people worldwide. Since Vista’s founding in 2000, Smith has overseen more than 380 completed transactions by the firm representing over $120 billion in transaction value.

Like Jones, Smith was trained as an engineer at Cornell University and earned his master’s degree in business administration from Columbia Business School with honors. Following a stint at Kraft General Foods, he joined Goldman Sachs in 1994 in tech investment banking, first in New York and then in Silicon Valley as the firm’s only investment banker solely focusing on tech mergers and acquisitions.

Although the Morehouse gift elevated Smith’s status as a venture capitalist, his philanthropic endeavors have paralleled his rise as a black billionaire with a net worth of $4.5 billion. In 2017, Smith was the only African American to sign on to The Giving Pledge, a commitment by the world’s wealthiest individuals to dedicate most of their wealth to philanthropy. His gift of $20 million was the largest by an individual donor to the National Museum of African American History and Culture, among many other philanthropic activities.

Besides Jones, Smith also has other ties to Arkansas that are not well known. Before the former Acxiom Corp. was split in two in September 2018, Smith’s private equity firm held nearly 870,000 shares in the Arkansas company. That stock saw a 25% boost after Acxiom shareholders overwhelmingly approved the sale of the Arkansas tech firm’s legacy data marketing business for $2.3 billion to New York-based Interpublic Group (IPG).

According to federal Securities and Exchange Commission (SEC) filings, Vista’s stake in Acxiom was worth a tidy $43 million before IPG took Acxiom’s legacy data marketing business private, and then separated the remaining company from its Arkansas roots and moved to Silicon Valley as the publicly traded LiveRamp.

In late 2018, Vista acquired over 600,000 shares in LiveRamp at nearly $23.2 million, according to SEC filings. That 2.7% equity stake gives Vista the fifth strongest position in the former Arkansas based company, which is now headquartered in San Francisco.

Like many, Jones said he did not know Smith’s connection to Arkansas or his influence on Wall Street and Silicon Valley. He joked that the next time he visits with former Acxiom Chairman and CEO Charles Morgan, he will ask him about Smith’s ownership stake in the Arkansas tech firm.

Morgan recently sold off Little Rock’s thinly traded Inuvo Inc. for $75.5 million. One of Arkansas’ first tech entrepreneurs, Morgan is also financing the planned global headquarters of First Orion in North Little Rock’s Argenta area. That Main Street project near the Innovation Hub is under construction and will employ more than 700 when completed later this year.