Billionaire Robert Smith on building capital in the African American community

Robert Smith, CEO and chairman of Vista Equity Partners, sat down with CNBC's Andrew Ross Sorkin at the World Economic Forum in Davos, Switzerland to discuss how he sees the future of capitalism as well as his decision to pay off the student loans for 400 Morehouse students who graduated from the university in 2019.
In May 2019, Robert F. Smith, founder and CEO of private-equity firm Vista Equity Partners, gave a commencement speech to Morehouse College’s graduating class. Then, the billionaire announced that he and his family would pay off the roughly 400 graduating seniors’ student loans - as well as loans taken out by students’ parents and guardians.
The total gift of roughly $34 million brought the crowd to their feet and sparked a conversation about student debt, college affordability and Historically Black Colleges and Universities like Morehouse.
At the 50th World Economic Forum in Davos, Switzerland, Smith spoke with CNBC about the economic and philosophical principals behind his decision.
“Capitalism still is the most efficient system on the planet for uplifting humanity generally,” he said. “But of course, in general, we go up, but we have individual pockets that don’t necessarily participate. African Americans have traditionally not participated,” he said, pointing to the Homestead Act, the Southern Homestead Act and redlining as examples of how African Americans have been kept from gaining generational wealth through land ownership.
Student debt, says Smith, would likely have forced the Morehouse graduates to delay buying a home and participating in this system of creating wealth.
Indeed, research has found that student debt is forcing borrowers to delay buying homes. A 2019 survey by TD Bank of more than 1,000 Americans between the ages of 18 and 39 who paid off or are currently repaying student loan debt found that 36% say they have delayed buying a home because of student debt.
Marco Di Maggio, a professor at Harvard Business School, said Smith’s generosity will have significant financial implications for the Morehouse students. He cited his own research that tracked 10,000 people who had their private student loans discharged and found that the borrowers increased their salaries by $4,000 over three years and carried less debt overall after they no longer had to make student loan payments.
But beyond these economic logistics, Smith said his decision ultimately came from his personal philosophy about freedom.
“The whole inspiration really comes from an ideological position around how do you liberate the human spirit. I don’t think there’s anything more beautiful than the liberated human spirit,” he said, asking himself, “What’s a good way to liberate 400 spirits 400 years after 1619?” in reference to the 400-year anniversary of the arrival of the first African slave in America.
Smith said he was overwhelmed by the response he got from students and their families after his donation. “It was one of the most beautiful expressions I’ve ever seen of the human spirit, liberated en masse,” remembered Smith. “It was wonderful.”
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[@PassiveIncomeTom]

*Self education is the key to escape the poverty mindset. Have BIG dreams and figure out how to get there. The internet cuts that barrier down. Don't waste it playing online games unless it brings you some serious 💲💲💲.*

[@brandondyson7769]

No Excuses

[@brandondyson7769]

I self taught myself about private Equity buyouts acquisitions

[@paid1nfull346]

@@brandondyson7769 where can I invest in your firm, I have $100

[@brandnewcole]

Love knowing he still meets with those Morehouse men monthly! Mentorship is a 🗝️.

[@dvsxavier]

It's like planting a seed of hope, and breaking the cycle of poverty

[@teebone2157]

I met this guy. Good guy. I couldnt find anything in his business or beliefs that make him a VULTURE

[@dvsxavier]

Paying it forward. Robert doing his part to lift the marginalized students from debt

[@angelinaalvarado9586]

Yes!! Yes!!! Omg in all “ ghettos n varrios!! There is so so much talent within these “ hoods” so much intelligence!!! We just need soon uplifting real good sincere help!!!!!

[@teebone2157]

yep I have met kids with photographic memories that learn anything in minutes. they are stuck in poverty sadly

[@oneofthemdeals]

#AndrewDorkin will never do something compassionate like what Robert Smith did in his lifetime.

[@hayaglamazonluxe]

Smart guy.

[@peteholloway5473]

I wished he had set up a platform project for those young men who could learn his business software financial services ect.. that money could have employed 400 young men (let them work it)That busines while he mentor those men could have created another multi million dollar business ...

[@jirahmekseti9349]

Exactly...

[@lavellelee5734]

I like the way ya mind works

[@dgmgneco1516]

THANKS ROBERT SMITH

[@dbarbour1982]

Well whatever it fucking costs to wipe out a student's debt you better be depositing into my bank account for not going. I didn't get a free degree

[@lindahenderson5331]

Would love for you to look at our area in Texarkana. I would like to see how I can increase my capital

[@durr6923]

Only the poor pays taxes, billionaires like me. We just do not pay taxes.

[@angelinaalvarado9586]

You BETTER BE 4 REAL 😇HEAVENLY GOODNESS REAL MR. 😇👌💫

[@kennykardashian4532]

I could tell this guy is smart he's putting me to sleep, black roll model married 2 times both to white chicks

[@fritopie8701]

Not a pessimist but what resources Africa offer abroad when all its natural resources have been consumed . Rare minerals , fossil fuel ? Would love to invest Oak Cliff Tx

[@rossanoedgardorejano6268]

I thought he was the in the British band... The Cure

[@williamspencer8954]

Let me tell him what we think about Capitalism ok. A majority of us don’t know what it besides what our politicians tell us. That’s for black and whites alike. Broke white people don’t know what it is either. Play this game called ask a poor person today.

[@dbarbour1982]

A black millionaire? What happened to all of them being oppressed. Where you at #blacklivesmatter

[@dicker70]

black millionaire, despite whites, have you heard of black wallstreet?

[@leonhenry4861]

Black Billionaire.

[@ozzyfromspace]

Billionaire, with a B.

[@jm503]

Dan You’re a blithering idiot.

[@allenllewellynkra]

billionaire