You should be donating money to your college. I love donating like to my alma mater. I give money to them every month, and I’m even considering including them in my will. There are so many reasons that you should consider donating money to your college.
A couple of weeks ago there is a spirited debate on the blog, Tie The Money Knot, about whether or not you should be donating money to your college and giving back. I quickly found myself in the minority, and I wanted to elaborate more on why I think that you should be donating money to your college.
Five Reasons College Donations Are Important
Donating Money To Your College Protects Your Investment
I look at my diploma as a certificate of stock from my college that I went to. The value of that diploma goes up and down depending on what my college does, how is portrayed in the news, and how it improves throughout the years.
My goal is that my college diploma will increase in value throughout the years. One way that I can still influence that is by giving back to my alma mater. It is one reason why you should consider donating money to your college. It is a protection of your investment of the four years and most likely thousands of dollars that you have invested.
Colleges Need Donations For Their Operation Budgets
When I was working on the staff of my college’s student newspaper, I was introduced to the air workings of collegiate budgets. I was amazed that a large percentage of my college’s operating budget came from our endowment.
And, of course, the endowment comes from the generous donations of alumni. So without alumni donating money to your college, the operating budget of the college could be squeezed. It would be a shame to have sequestration to her college budget much like the federal government is facing America today.
Helping And Giving Back To New Students
Donating money to your college also helps give back to the next generation of students. The money that you donate to your alma mater often goes to new scholarships and to help fund new programs for the next classes of students who will attend your college.
It is often wonderful to think that donating money to your college can have a lasting impact on future generations of your fellow college students long into the future to come.
For that reason, many colleges also rely on the help of fundraising firms to help raise money for their school. These firms work with alumni and other donors to help solicit donations for the college. This can be a great way for colleges to get more money for important projects and initiatives.
Ranking Well In National Polls
We have to face facts. If a college wants to attract great students in great faculty, then they need to rent well the national polls. And, one attribute that colleges are graded against is the amount alumni give. most rankings in national magazines rank colleges based on the percentage of alumni who gave back to their alma maters.
So often in the rankings is far more important for a college to have many small gifts with a high percentage of alumni giving back rather than one or two large gifts with very few alumni giving back and donating money to your college.
The College Gave You So Much To Start With
When I think of my college, I have nothing but good memories. I look back and I think of all the things that my college gave to me. You gave me a start, new friends, great experience, and life lessons, and was a place where I met my wife. I think that I owe so much more to the college than I’ll ever be able to repay. And, that is why I give freely from my heart back to my alma mater which I love so much.
I understand that giving to any charity is a personal decision. There are many people who simply don’t have the financial means to give back to charities they care about whether it is their college alma mater or another cause they love. I also think that there are far too many people who can give back and simply choose not to. And, I think that is a downright shame.
Do you give college donations back to your alma mater? Do you get back with your money, your time, or your energy? I love to hear your thoughts on why are why not you are not donating money to your college.
We give to my University when we can and for many of the same reasons you listed here. Honestly, it’s a little low on our priority list, but do give when we can. One would think with the amount they have coming in that a school would not need it, though fundraising is a major thing for many.
So many people have a negative taste in their mouths about the cost of higher education, but most people do not understand the role that giving and fundraising plays in their current, short-term operational budget. It is like assuming that someone is rich simply because they have an nice car or live in a nice neighborhood. It doesn’t look at the underlying situation, cash flow, total net worth, etc.
I am a huge believer in donating to my alma maters!! Having been on some boards of organizations that rely on government funding and/or donations, I know how difficult it can be to operate without funds. Another thing of note – people love to donate to projects, but not keeping the lights on or the buildings maintained. That’s one of the areas that I try to support, personally.
I love your second to last sentence! “people love to donate to projects, but not keeping the lights on or the buildings maintained” That is perfect! Well said! Thank you.
What exactly is my tuition for, then? If a for-profit institution can’t keep the lights on, it’s a bad business.
I’ll be the devil’s advocate here:
1. You mention operating budgets – ask yourself, why are they so large to begin with? It’s because University President compensation is correlated and causally related to the size of their operating budget. That is why there is an arms race in terms of new facilities, etc.
2. If I didn’t benefit from a scholarship and paid full freight, I feel no obligation to give back.
3. Look at the size of the endowment. Most of the prestigious school endowments are so large they could use the money to reduce tuition but they don’t.
4. You are probably doing more good by donating to your local public school.
These are some great comments. Flawed but really thought provoking. I’m not sure about the #1. Can you point to an article or something that proves that one?
#2 – Like I mentioned in the article, I think of my diploma like a certificate of stock. I want its value to increase of course. Donating money to make my alma mater better is directly tied to that goal. I went to a small liberal arts college in SC for my undergrad, and I want you, guys in California, and even Maine to have heard of it eventually.
#3 – I think we all know that’s not what endowments were designed for. It’s like an annuity or a fancy emergency fund that gives off earnings every year that are used for a host of things on campus to include some operating expenses. At last report, Harvard’s endowment had about $32 billion and Yale had about $19 billion. With full priced undergrad tuition costing about $37,500 per year at Harvard, the endowment would pay for about 213,00 students’ four year full rides to the school. With 7,180 undergrads, the endowment could cover 29 years worth of tuition for students. Okay…when you crunch the numbers, that just sounds bad. You may have a good point there. Although what do you do after year #29?
#4 – You honestly think that government bureaucrats, even local ones, can wisely spend money any better than collegiate ones? Donating money to public grade schools in America may make a difference if we ALL did it, but not just one or a few people. Public schools in America need serious help beyond what we give to colleges and universities.
I went to small liberal arts school in Virginia that is routinely ranked in the top 20 nationally. However, over the years my view of its value has diminished. I believe that the additional coursework I did at UGA and the MBA I got from Georgia State helped my career and earnings far more than my liberals arts degree did and they were a fraction of the cost (my employers paid for most of my MBA). My current thinking is that I will fund the majority of my childrens’ education at a large state university and if they do well we will discuss what, if anything, I will contribute towards a masters. I am now of the view that most of these small liberal arts colleges are just country clubs – if you went to one then I think you would agree. My hope is that online learning will be a disruptive force that will hold down or reduce tuition by the time my children attend.
I have administered compensation for the last 15 years for several large companies. One saying that usually rings true is ‘follow the money’. Compensation surveys scope their data in many ways but for higher paid jobs the most common are revenues for public companies, assets for financial companies and operating budgets for universities. When schools compare their salaries to other schools they compare themselves based on operating budgets (as well as who they compete with for students, faculty, etc.). In all cases the larger the revenues/assets/operating budgets, the higher the pay.
Regarding endowments – how much is enough? Remember these institutions pay little in the way of taxes.
When I mention local public schools I’m referring to the foundations that typically fund an extra science or computer teacher. I think it is hard to argue that this donated money doesn’t have a direct impact as opposed to some college ‘general fund’ that goes towards dubious trips and conferences attended by college administrations.
If I still haven’t convinced you then I would at least recommend that you make restricted gifts to your college. Restricted gifts allow you to earmark your gift toward a particular program, department, or scholarship and is more likely to have a direct impact.
What do you do after year 29?
The point made is that the money doesn’t actually go to the students, they are still paying full tuition. This poses a strong counterpoint to “Helping and giving back to new students”
Sure you can say “Scholarships” but you just did the math; one year of endowments could cover 29 YEARS. Where are the scholarships?
Imagine selling a 2001 Toyota Camry to an 18 year old for an exorbitant price, such as $50,000, because they did not have the financial literacy or experience as a high schooler to know it was a ripoff. Now, imagine this car has hidden fees the buyer must pay to keep it running, comparable to the thousands per year students pay for “cultural fees, rec fees, inclusion and diversity fees, etc” that they weren’t initially told about. Finally, imagine your income is many multiples of the person you charged 50k for a beat up Camry, and five years later they owe more on the car than what they paid you because the high interest accrual has surpassed all of their on-time payments. How do you justify, from a moral standpoint, asking this person for money every year after this transaction? College is at-best a transaction of money in exchange for a degree, and I am thoroughly insulted whenever I get emails asking for donations when I already gave them their ridiculous price to begin with. I am even someone who has been proactive in getting loans paid off with a good income in a low cost of living area, so I am speaking for those less fortunate in the above scenario.
I agree. I gave them plenty of money. I’d rather give to an organization that really needs it.
I went to a private college so it’s even more important there, since they don’t receive any public funds. Even publicly funded universities depend on donations for capital improvements, new buildings, renovations and the such. While I think a lot of spending in that regard has gone a little overboard, the fact is that without good facilities, it will be harder to attract quality students and professors alike. I know that I still benefit from my college education today, over fifteen years later, so I can easily justify the small cost of donating to them on an annual basis. (Plus, we get a calendar that I hang on my office wall, which is great for keeping my memories and such alive)
I’m a sucker for freebies and swag! My college continues to send lame bumper stickers. I wish they would change it up. I would love a great calendar!
I found it interesting that when it comes to rankings, a more important metric is percentage of alumni who give. So, it doesn’t matter how much, but if everyone gives $1, it looks really good for rankings.
It’s a function of what percentage of your alumni are envolved with the college and active with it.
I don’t donate to my college – never have. I went to a top-5 University, and a lot of my classmates are ridiculously successful already; I always figure “I’ll donate once I’m financially secure and have the spare cash to do it.” I’m probably closer to that point than I realize.
That’s a very astute observation. We are all probably hardest on ourselves and expect more.
Donating money to College will benefit both you and the school. Why not donate when you have some extra, right?
You make some good points Hank. We have given minimally to our alma maters in recent years as most of out checks seem to go to the schools that our two in college attend, our oldest is out thankfully, but still we’ve had at least one in school since the fall of ’06.
As to your point about the national rankings, when our oldest was a frosh at USC she had a PT job phoning alums to get them to contribute. Her instructions were to get them to give even $5 because the percentage of alums donating was part of the ranking system.
This is a poor argument. As of 2012, sixty-nine colleges and universities, from Amherst to Yale, from Notre Dame to Yeshiva, had endowments of at least one billion dollars each. That’s one billion, with a “B.” Topping the list is Harvard with over $30 billion in the bank, but Yale, Stanford, and Princeton all exceeded $15 billion and every school in the Big Ten but Iowa makes the list – and that state makes up for it with tiny Grinnell College at roughly $1.4 billion. The combined total of all college endowments is probably not quite enough to pay off the national debt, but it’s a lot more than you will ever have in your 401(k).
If you’re lucky enough to have a full-time job in the private sector then you likely work year-round. Sure, you get some weekends and holidays off – and maybe even a few weeks’ vacation if you can find the time to take it – but college professors and administrators get the same weekends and holidays plus “winter break,” spring break, and summer vacation. Don’t even try to get in touch with a college professor between May and September; they’re too busy travelling, likely at someone else’s expense.
The decision to donate to a college requires at least two factors (1) Having the financial means to give and (2) Having a strong belief that the college has “earned” such a donation. When one or both factors are absent, no donation happens. Unfortunately, not everyone loved their college. I consider my undergraduate experience to be the worst time of my life. From not offering necessary classes for my major to letting someone else plagiarize my senior project, the school did not earn any donations from me. Getting requests for donations only added insult to injury. I wrote to the college that I attended (I will never refer to it as “my college” or “my alma mater”) and told them in no uncertain terms to remove me from the alumni roster forever.
Yes, I feel my university did not earn donations from me.
If I have an extra $20-$20k in my family budget, then I think it’s infinitely more valuable to donate to those in need. A local shelter, ASPCA, kids after-school program, substance abuse clinic, or whatever else is important to you. This article makes a school donation seem pretty selfish. Mostly to protect the value of the school so that your own diploma appreciates in value.
Student tuition at my university continues to increase every year…more so than inflation. Then a new building goes up or the freshly manicured landscaping get even more freshly manicured. How about a class or two for economics or accounting majors to help manage the school’s budget! They’d basically be paying the school to help the school save money and I wouldn’t get the constant mailings asking me to pay for something that took me years to pay off in the first place.
Haha — you’re clearly not a professor, Dean C. My summers are used for class prep and research. Maybe I’m doing it wrong, but I really hate the perception that I get summers and breaks “off.”
If I was a billionaire I still wouldn’t donate any money to a college. I make close to $200K a year. I have a B.S., M.S., and PhD from three different schools and combined I have not dontaed a penny, and I never will. Surely there are thousands of more worthwhile organizations than some college. Colleges are cesspools where intellectual thought and discourse go to die.