"This is a place I really love and a place that made me feel I was appreciated and loved," Simon said. "How many things do you need in your life? I don't have children to leave money to. This to me is the best of all worlds."
School officials hope that Simon's generosity will boost financial access to the 120-year-old boarding school that has produced 12 Olympic gold medalists, a Nobel laureate, and Oscar winners Jimmy Stewart and Benicio Del Toro. They say it will also give Mercersburg something it has lacked in comparison to its Ivy-covered rivals on the East Coast: recognition.
"We're 'the little engine that could' kind of school," said Maine veterinarian and 1965 graduate John Prentiss, the board member who boldly solicited the donation from Simon. "We've been sliding under the radar. You tell people you went to Mercersburg and say, 'It's a little school you never heard of in southern Pennsylvania.' Those times are hopefully over."
The largest U.S. gift to a private secondary school was also in Pennsylvania - $128 million to Newtown's George School in 2007 from alumna and heiress Barbara Dodd Anderson. In 1993, publisher Walter H. Annenberg gave $100 million to his alma mater, the Peddie School in Hightstown, N.J.
Simon, 57, who lives in Indianapolis and chairs the Simon Youth Foundation, which aids at-risk urban youth, said the donation was simply her way of giving back to the 430-student academy that made her feel appreciated.
"It's hard to explain when your heart tells you to do something," she said. "I think the school's magical."
The daughter of the late Mel Simon, developer of Minnesota's Mall of America and one-time owner of the Indiana Pacers, had already made a significant mark on the 300-acre campus, about 160 miles west of Philadelphia. Her earlier gifts helped build the new Simon Student Center as well as the Simon Theatre, named for her parents and the centerpiece of the 65,000-square-foot Burgin Arts Center.
Today, Simon's alma mater is a dazzling mixture of old and new - where every student totes an iPad, and the mother tongue of any of the students from 36 countries might float from a passing cellphone conversation.
In an acting class inside the sleek Burgin center, visiting teacher Meirenka Cechova sat last week on the floor with students who typed out their dreams on iPads. Cechova told them their assignment was to silently act out the dreams.
"Is there some character in the dream?" she asked them. "Look at the ending, how did the character change, was there some physical change, some internal feeling . . . is the character trying to get somewhere?"
It's a challenge that echoes the real-life odyssey of Simon, who arrived at the campus in 1972 unsure of how to follow her own dreams. She said she'd felt a bit lost in the large public high school that she previously attended in Indiana, where "you had to be in the in-crowd to do stuff, like performing."
She flourished at Mercersburg amid a family-like atmosphere and intimate classes, serving as features editor of the school paper, singing in the choir, and appearing in the same acting troupe that nurtured Stewart.
"The first time we did Our Town - that to me is where I met a lot of good friends. I was one of the mothers. I was always in character roles," Simon recalled, laughing. "The show that we did as a senior was The Glass Menagerie, and I got to be the mother. That was an amazing experience, because I always loved Tennessee Williams."
History teacher Karl Reisner recalled Simon as "somewhat introverted" and homesick, but a good student nonetheless.
Her confidence quickly grew. "I proved to myself I had a mind, that I could learn," she said.
After college she worked at a film company launched by her father, who produced the raunchy teen classic Porky's and the more acclaimed My Bodyguard, among others, and at another firm. She read scripts, supervised music, and produced a 1984 TV movie before switching careers.
"I decided it was easier to sell real estate than dreams," she explained of working at the Simon Property Group.
She's been in the news more recently because of a legal dispute with her father's second wife over his estate.
Her main focus now is the Simon Youth Foundation, which offers scholarships and training to help struggling urban youths get high school diplomas and find work.
"If you don't help these kids eventually, they are going to continue the cycle of poverty," she said.
But she never lost her passion for the very different mission of Mercersburg.
At a board meeting last winter in West Palm Beach, Fla., to discuss a $125 million fund-raising campaign, Prentiss said, he thought about Annenberg's "magical" $100 million donation - and made the audacious decision to ask Simon for the same.
"How many people even have a relationship with someone where you cannot only ask them for money but ask for $100 million and have her look across the table and say yes," marveled Prentiss.
Head of school Douglas Hale, who was at the meeting, called the news "one of those moments when you think, 'This is the best thing ever.' "
With Simon's pledge, the school has bumped up its fund-raising goal to $300 million.
H.F. "Gerry" Lenfest, a Mercersburg alumnus and major donor, praised Simon's generosity. "I think it will raise Mercersburg to the top echelon of all the preparatory schools in the nation," said Lenfest, chairman of Interstate General Media, parent company of The Inquirer.
Mercersburg is already the 11th-richest private school in the nation, with a $217 million endowment. But the gift will boost it into the top tier of well-financed schools. (The largest endowment belongs to Phillips Exeter Academy in New Hampshire, roughly $1 billion.)
School officials said the money should help Mercersburg move toward a needs-blind admission process that will allow it to offer more financial aid to underprivileged students and middle-income families to defray the nearly $52,000-a-year tuition.
"What makes it special? The relationships you build with not only your friends but with your teachers," said Ryan Kloff, 16, from Reston, Va., before lunch in the elegant dining hall, where students and staff share family-style meals.
That hasn't changed much since Simon's days there.
"I want to help kids get the kind of education I did. I was very, very fortunate," she said. "I just loved the school."