Give to Your Alma Mater (Part 3 of 3)
Breaking that dance into bits and pieces of choreography leaves the loyal alum with four key considerations before signing a check:
1. The Hedge Fund - Yes, your alma mater has a huge endowment and a highly-paid investment manager. But remember that his salary pales in comparison to the returns that he earns. Your gift is bigger because of his efforts, even if some of it goes to him.
2. The Juggernaut - Your gift may seem small compared to returns on the endowment, but remember that the endowment continues to grow and earn even greater returns because of alumni gifts. Ms. O’Neill compares Yale’s endowment to those of less successful university and non-academic philanthropy efforts, arguing that without continued gifts, the endowment stagnates. Also, remember that smaller departments within the larger university may not have such fantastic endowments. Their operating costs rely even more heavily on alumni giving to keep tuition down and doors open.
3. The Well-Executed Assist - An unrestricted gift might be harder to track, but the university could not function without it. No learning can take place in the library if the library doesn’t have heating, and those operating costs come from unrestricted gifts.
4. The Earmark - If it’s important to you to track the impact of your gift, either give big, or give very specifically. At the $100,000 level, donor involvement begins to make economic sense. If you’re going to give smaller than that, follow O’Neill’s advice and give to something very specialized like women’s gymnastics.
5. The Big Give - If you happen to be in the privileged position where a $5 million gift becomes a possibility, consider letting your alma mater manage those funds for you. You can take advantage of all those big bank investment returns, give back to your alma mater, and let your alma mater direct the returns wherever your heart desires.
When asked why giving back to universities, restricted or not, remains an important use of philanthropic dollars, Ms. O’Neill says, “The government isn’t planning on taking over all university libraries or medical research. [Investing in your alma mater] is an investment in the future of society.”