By Sarah B Lange under Philanthropy Stories on July 15, 2021

Did you know that PHILANTHROPY had a major impact on the current US Stock Market?

It’s true!

Say hello to Alfred Cowles. Born in 1891 into a family of business tycoons, Cowles became a wealthy business man in his own right by advising people on their investments. After the Stock Market crashed in 1929 and sent the US into the Great Depression, Cowles had doubts about the worth of his profession, which at that time relied heavily on best guesses, which offered little predictive value.

Cowles decided they needed more precise information about securities and the significance of the market fluctuations that affected their price. He wanted an objective way to view what was happening in the market so people could better predict it, so he set out to develop new tools to use for analysis.

This is where philanthropy stepped in! Cowles teamed up with economists from the US and Europe to apply mathematics and statistics to economics. He established the Cowles Commission at the University of Chicago and provided support to the most gifted quantitative economists of his day to launch the field of econometrics. In 1931, the Econometrics Society held its first meeting in Washington, DC.

Cowles and other econometrics undertook the task of improving the analytical tools available to economics and investors. Some of the best minds in the field from around the world came together to create and test some of the most important economic ideas of our time; ideas that reshaped the field of investment and finance. For example, Cowles created the Cowles Index, a precursor to Standard and Poor’s 500 Index. Cowles and his colleagues introduced the importance of weighing risk as well as return, and forwarded new theories about portfolio selection and allocation and many others.

These ideas may not seem new to us now — because they have been adopted as the basic principles that world leaders and regular citizens rely on to manage the global economy and their own retirement funds! — but they were groundbreaking at the time. In fact, their work was so innovative that nine Cowles fellows received the Nobel Prize in Economics, including Cowles, who died in 1984.

Since the founding of the Cowles Commission (now known as the Cowles Foundation, situated at Yale), the connection between economics, math and statistics has deepened, creating some of the most important advances in modern econ theory, which still dominates our thinking today. The work forwarded and funded by Cowles is, in fact, the underpinning of our understanding of modern economics and the stock market!

Cowles made basic changes for the greater good. Since 1931, his work – and the work of the economists he supported – has created major benefits for millions of people, for institutions raising and investing money, and has played a major part in the strength of the US economy.

Now that’s some major philanthropic impact!

What could philanthropy make possible for YOUR organization? What might be possible if you had a group of smart, generous people who stepped up and funded important innovations in the work you’re doing?

What does YOUR Clowes Commission look like? What innovation lies in YOUR future? What might you be able to accomplish if you had the funding you need to accomplish your mission?

And how can I help you get there?

If you’ve got a question, I’m here to help!

Stay tuned for more stories of innovations that have been Powered by Philanthropy!


{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}


Have a specific question for me or my team? Send us a message and we'll get back to you as quickly as possible - usually within 24 to 48 hours (not including weekends).