What do Nobel Laureates do with all that prize money?
By Juhi Yajnik | September 29, 2006
When the Nobel Prizes in Physiology or Medicine, Physics and Chemistry are awarded next week, the winners will be thrown into a maelstrom of publicity. Over the coming months, they will be interviewed innumerable times, they will dine with the King of Sweden amid great pomp and circumstance, and their calendars will fill up with speaking engagements and appearances. But there is also another dimension of excitement associated with winning a Nobel Prize: the money.
Each of next week's prizes will carry an award of 10 million Swedish kronar, the equivalent of $1.3 million. The prizes are sometimes divided between more than one winner, but even so, the amount each laureate receives is far from negligible. Based on past history, it seems a fair bet that the winners will be generous with the cash, making sizable donations to causes that matter to them -- and that they will also indulge some personal whims.
Sir Paul Nurse, who won the Nobel Prize in Physiology or Medicine in 2001, famously put some of his winnings towards upgrading to a snazzier motorbike. But others have done equally indulgent things. In addition to making charitable donations and buying presents for his family, Richard Roberts, winner of the physiology or medicine prize in 1993, installed a croquet lawn in front of his house. "I had always wanted one, and this seemed like it might be my only opportunity to afford it," he said in an e-mail to The Scientist.
Not surprisingly, many laureates put the winnings toward new houses, or improving the ones they've already got. Philip Sharp, co-winner with Roberts in 1993, used the money, along with the proceeds from the sale of his previous home, to buy a 90-year-old Federalist house with "a wonderful garden," he told The Scientist.
Most of the winners also make charitable donations, with a few giving away their winnings in their entirety. Gunter Blobel, who won in 1999, dedicated all of the money to repairing some of the destruction caused to Dresden during World War II and to building a new synagogue. As an eleven-year-old child fleeing the Russian Red Army with his family, Blobel traveled through Dresden just days before the massive air raid that demolished the city. Though he was staying in a village a few miles away when the raid hit, he could see the flames envelope the city. Before the war ended, it claimed the life of his 19-year-old sister, Ruth, in a bombing. Blobel's donation of his prize money was made in her name.
Paul Greengard donated money from his 2000 award to Rockefeller University, where he is on the faculty. The money was earmarked to create a prize for women in science in the name of his mother, Pearl Meister, who died giving birth to him. "I thought it would be a nice thing to do to honor her memory and to do something about the discrimination against women that I've observed over the course of my career," Greengard told The Scientist.
E. Donnall Thomas, a 1990 laureate, chose to gift the bulk of his winnings to the Fred Hutchinson Cancer Research Center, where he has worked since 1974. "No one person ever wins the prize by himself or herself," Thomas told The Scientist. "So, I didn't feel it was appropriate to keep the prize money for myself."
The generosity of the laureates was made possible by the generosity of Alfred Nobel, who made his fortune in the mid-19th century by inventing and selling dynamite. In his will, Nobel specified that his assets should be sold to create the Nobel Prizes in Physics, Chemistry, Physiology or Medicine, Literature and Peace. When he died in 1896, those assets were worth the equivalent of close to 1.5 billion kronar, or $205 million, in today's currency. Over the past 100 years, the money has been invested by the Nobel Foundation and has grown to a nest egg of 35 billion kronar, or $480 million.
Much of this growth is due to a change in investment strategy that took place in 1953. Originally, Nobel's will required the money to be invested in "safe securities," which the foundation interpreted as government bonds because inflation was so miniscule. But as inflation grew, the foundation revised its strategy and began investing in equities to diversify its portfolio, said Nobel Foundation Vice President Ake Alteus.
Historically, the amount of the prizes has varied considerably from year to year, depending on how the investments are faring. In 2001, the foundation marked its 100-year anniversary and raised the monetary award of each prize by a million kronar to the current level of 10 million kronar. "We thought 10 million was a nice round number," Alteus told The Scientist. Though the investments "took a dive" in 2002, the foundation has maintained the prize at that amount and has no plans to lower it, he said.
The foundation manages to pay all of its expenses each year -- including the monetary awards, the lush awards ceremony, and employee salaries - without cutting into its capital, according to Alteus. That means that the funds should be there to keep the prize going indefinitely. "In our minds," said Alteus, "it's a permanent thing."
Links within this article:
"The Englishman coming to New York," The Scientist, Jan. 31, 2003
"2000 Nobel goes to Arvid Carlsson, Paul Greengard and Eric Kandel," The Scientist, Oct. 9, 2000
"North American Scientists Sweep This Year's Nobel Prizes," The Scientist, Nov. 12, 1990
Nobel Prize amounts