Airgas Inc., founder Peter McCausland and his wife, Bonnie, announced their gift Thursday in Columbia.
The businessman is a 1971 South Carolina graduate with a degree in history.
The endowment will be used to retain successful teachers, launch a visiting scholars program and encourage imaginative teaching and research projects.
McCausland says he wants the gift to go to the university's College of Arts and Sciences. He says his teachers were inspiring and passionate about their work, and he wants to support such fervor.
Arts and Sciences Dean Mary Ann Fitzpatrick says the gift will help retain faculty who might be recruited by other schools.