Dr. Ruth Gottesman's $1 Billion Gift: What Every Fundraiser Should Understand About True Transformational Giving
In February 2024, Dr. Ruth Gottesman — a professor emerita of pediatrics who had spent 55 years on the faculty of Albert Einstein College of Medicine in the Bronx — announced she was giving the school $1 billion. The gift's purpose was singular: free tuition, for every student, forever. Students already enrolled received a refund of their spring semester tuition on the spot, and every student who walks through the doors from now on pays nothing.
Not enough people know this story, and it deserves to be far better known, not only for its scale but for what it reveals about what a truly transformational gift looks like.
The Gift, in Brief
Gottesman's husband, David "Sandy" Gottesman, was an early investor in Berkshire Hathaway and a close friend of the famous investor Warren Buffett's for more than six decades. When Sandy died in 2022 at age 96, he left Ruth a portfolio of Berkshire Hathaway stock she did not know existed. His instructions were brief and empowering: do whatever she thought was right with it.
She thought about it, consulted her children, and decided she would fund tuition at the medical school where she had built her career — a school in the Bronx, one of the poorest counties in the country, training physicians who would go on to serve exactly the kind of communities that produced the need for her gift in the first place. It is, by most accounts, the largest single gift ever made to a medical school in American history.
Why This Is a Transformational Gift, Not Just a Large One
In my companion post on this blog, What Is a Transformational Donor? How to Identify and Cultivate Them, I make a distinction that applies precisely here: a transformational donor is not defined by wealth alone but by impact-driven motivation, paired with an organization's willingness to offer a big enough idea.
Most large gifts fund a building or a program with a beginning and an end. Gottesman's gift restructures the basic economics of how a person becomes a doctor at this institution, permanently, for every student who will ever attend. That’s why it transformational.
That companion blog post drew on Jim Collins' concept of a Big Hairy Audacious Goal — what I describe in Fundraising 401 as the principle that big ideas attract big money. Free tuition, forever, for an entire medical school is about as audacious a goal as philanthropy produces, and Gottesman's gift is a vivid, real-world instance of that principle at its largest scale.
The companion post also notes that transformational donors are usually already in the room. Gottesman was not was not a stranger Einstein identified and cultivated from scratch, but a 55-year member of the community, already as close to the mission as a person can be, when the financial means to transform it arrived. That is a replicable lesson in her story: the most promising transformational prospects are very often already in your database, already engaged, already partly persuaded by a lifetime of proximity to your work.
A Restriction That Liberates Rather Than Constrains
The companion post highlights unrestricted giving as a powerful tool, citing the case of a donor whose unrestricted gift allowed a nonprofit to build infrastructure that attracted further funding. Gottesman's gift is technically restricted since its entire purpose is tuition. But it is restricted in the most liberating way a gift can be: one clear purpose, applied permanently, with no narrow programmatic strings attached beyond that single, transformative use.
The lesson for fundraisers is that the unrestricted-versus-restricted question is less important than the size and clarity of the purpose itself. A single, big, simple idea can be every bit as freeing as no restriction at all.
No Solicitor, No Ask — and What That Teaches Us
Most transformational gifts in the fundraising literature involve a fundraiser who cultivated the relationship and made the case. Gottesman's gift had no solicitor. She initiated it herself, which is the rarest and most coveted version of transformational giving.
That should not discourage fundraisers — it should instruct them. It shows that when a mission is compelling enough, and a relationship deep enough, donors do not wait to be asked. They look for the opportunity to give in a way that matters. The fundraiser's job is to build the kind of relationship and articulate the kind of vision that makes a donor want to find you before you find them.
Three Technical Details That May Surprise Fundraisers
Beyond the headline number, the gift's structure contains lessons that many practitioners rarely encounter in a single transaction.
The stock had never been sold, and never would have been. Berkshire Hathaway famously pays no dividend, so the Gottesmans never owed income tax on these shares during the decades they held them, and because they never sold, they never triggered capital gains tax either. The entire billion-dollar value had been growing, untaxed, for decades. This is a textbook illustration of why gifts of long-held appreciated stock are among the most tax-efficient vehicles available to a donor.
The gift avoided a 40 percent estate tax that was otherwise coming. Had Gottesman held the stock until her own death rather than gifting it during her lifetime, a substantial portion of the portfolio's value would have been subject to federal estate tax. By giving now instead of bequeathing later, she redirected money that would have gone to the Treasury directly into tuition-free medical education instead.
The nonprofit can sell the stock completely tax-free. Because Albert Einstein College of Medicine is a tax-exempt organization, it can liquidate the Berkshire Hathaway shares without paying capital gains tax on a single dollar of the appreciation. A gift that could have lost considerable value to taxation in other circumstances arrived at the institution at its full worth.
The funds were placed in an endowment, with the income, not the principal, funding tuition in perpetuity. Gottesman did not fund free tuition for a decade. She funded it forever, by giving the institution an asset that generates income rather than a sum that simply depletes with use.
What Fundraisers Need to Know About Gifting Now Versus Bequeathing Later
Gottesman's choice to give during her lifetime rather than leave the stock in her estate is itself a lesson every development officer should understand and be ready to explain to a donor.
A lifetime gift removes the asset from the donor's taxable estate immediately and can avoid the substantial estate tax that would otherwise apply. It lets the donor see the impact of their generosity while they are alive to witness it, which is often the more emotionally resonant path for a donor who has spent decades connected to a mission. A bequest, by contrast, defers the gift until death, keeps the asset and its tax exposure inside the estate until then, and the donor never sees what their gift accomplishes.
Neither path is wrong, and many donors have good reasons to choose a bequest, but every development officer working with a donor who holds significant appreciated assets should be prepared to walk through both options clearly, because the difference between giving now and giving later can be enormous, both for the donor's financial outcome and for the donor's own experience of their generosity.
How to Ask a Donor for Appreciated Stock
Many fundraisers raise the topic of stock giving less often than they could, and the option can go unmentioned in conversations where it would have been welcome. Some donors capable of making this kind of gift may simply write a smaller check instead, not because they would not consider giving stock, but because the conversation never opened the door.
Start by identifying likely candidates already in your donor file: investment professionals, business owners, attorneys, physicians, retirees with taxable brokerage accounts, and donors who have used donor-advised funds in the past. Mention stock giving explicitly in year-end appeals and major donor conversations, using language that lowers the pressure rather than raises it: many of our long-time supporters have found that a gift of appreciated stock allows them to support our mission while avoiding capital gains tax on assets that have grown significantly in value.
On the infrastructure side, your organization needs a brokerage account at a custodian such as Schwab, Fidelity, or Vanguard, published transfer instructions, and a simple notification process so that incoming gifts can be matched to a donor rather than received anonymously. A gift that cannot be matched to a donor is harder to acknowledge and steward well, so a clear notification process protects both the donor relationship and the gift itself. Brief your board and senior staff on the basics so the conversation can happen comfortably and confidently whenever it arises.
Why Donor Education Matters as Much as the Ask
Many donors are genuinely curious about subjects like appreciated stock, donor-advised funds, and legacy giving, but have never had a structured opportunity to learn about them. In my own practice, I have found real value in hosting donor briefings with tax efficiency experts and gift planning professionals present, where donors can ask questions in a low-pressure setting that has nothing to do with a specific ask. Donors who attend these briefings often want to know how to use a donor-advised fund more effectively, how to think about leaving a legacy, or simply how appreciated stock giving actually works in practice.
These briefings serve the organization in a quieter but equally important way: they position the development office as a trusted source of financial literacy rather than only a source of solicitation, and that shift in posture tends to deepen relationships well beyond any single gift. A donor who has been genuinely educated, without an agenda attached to the education itself, is a donor who is more likely to think of your organization when a major financial or estate planning decision arrives.
The New York Public Library offers a useful real-world model of this approach. NYPL provides its supporters free access to an online estate planning tool, allowing donors to create a will or other estate documents in a few minutes at no cost, with the option to include the Library in those plans if they choose. The Library also publishes the personal stories of donors who have made planned gifts, in their own words. Nancy Wight, a longtime ESL teacher who brought her students to the Library for their first library cards, included the Library in her estate plan in memory of her daughter. Ellen Jaffe, a longtime patron, funded a charitable gift annuity with the Library after years of using its research collections. Neither story leads with the technical mechanics of the gift vehicle. Both lead with a lifetime of personal connection to the institution, with the gift presented as the natural extension of that relationship rather than the headline.
That is the model worth borrowing regardless of an organization's size: make the educational tools genuinely free and genuinely useful, tell the stories of real donors in their own words, and let the relationship, not the transaction, carry the narrative.
A Word on Family
Gottesman did not make this decision alone. She consulted her children before deciding, and that detail is easy to read past, but it should not be.
Major and transformational gifts are rarely a single individual's decision made in isolation. Adult children, spouses, and other family members often have real influence, whether the donor solicits their input directly or simply wants the decision to feel right within the family. A development office that has only ever cultivated one family member may be in a more fragile position than it realizes. The relationship that matters may extend well beyond the name on the gift agreement, and a fundraiser who has taken the time to know a donor's family, even informally, is often better positioned when a major decision arrives.
What This Gift Asks of the Rest of Us
Gottesman did not want the gift to come with conspicuous recognition. The school remains Albert Einstein College of Medicine, not Gottesman College of Medicine. Warren Buffett, asked for comment, said simply that he had never seen anyone behave better with a billion dollars.
For fundraisers, the lesson is not really about the size of the gift, but what a genuine, sustained relationship between a donor and a mission can produce when the means finally arrive--and the relationship does not need a 55-year arc to become transformational. Many of the most meaningful gifts in our sector emerge from relationships built over a few focused years of real cultivation, real listening, and a vision big enough to be worth a donor's deepest investment. Gottesman's story is dramatic in its scale. The principles behind it are available to any organization willing to build the relationship and offer the idea.
In examining this tremendous gift, what about it resonates with your nonprofit, and is that actionable? Share your thoughts in the comments section of the website.
A Note on Use
This post is offered freely for educational purposes. Please share it with colleagues in the development field — provided the author's byline remains intact: By Laurence A. Pagnoni, MPA. Reproduction in publications, training programs, or institutional materials requires attribution.
