Philanthropist Ted Stanley has announced a $650 million donation to the Broad Institute of MIT and Harvard. Apparently, Mr. Stanley did not accept Matt Yglesias’ argument that such gifts are “ridiculous”. Yglesias sees such donations as inequality maximizing and foolish because not many undergraduates at Harvard and other elite schools are poor.

Thank goodness Mr. Stanley did not accept Yglesias’ argument, which is based on an overly narrow view of what universities like Harvard and MIT do. Research is critical to their mission, and the caliber of scientists and infrastructure they have positions them unusually well to make breakthroughs, including in the treatment of dreaded diseases.

Mr. Stanley wants to advance treatments for serious mental illnesses, in part because his own son experienced bipolar disorder. These devastating diseases are among the leading causes of disability not just in the U.S. but worldwide. The Broad Institute has some of the best genetic and genomic researchers in the world on its staff, and they have already made progress on unraveling the genetic basis of schizophrenia.

From a rigidly egalitarian viewpoint, perhaps what Mr. Stanley should have done is cut up the gift into 10,000 pieces and given small grants to every single schizophrenia researcher in the country, or perhaps directed the gift entirely to universities that currently lack the resources to do genetic research so that they could build capacity over time. But neither of those approaches would be as likely to generate better treatments for serious mental illness as what Stanley actually did: Supported world-class people with world-class facilities to work on the problem.

In addition to being wise, Stanley’s gift is socially just. If we could more effectively treat or even prevent disorders like schizophrenia and bipolar disorder, the lives of countless families would be dramatically improved, particularly lower-income families who often lack the resources to care for their loved ones who have serious mental illnesses. Ironically enough, that enormous trans-income-level benefit is much more likely to come about from a gift to a wealthy university than to a resource-starved one.