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A Word of Warning About Giving

Commentary: New graduates face a lifetime of 'please...'
By Gary A. Tobin
Last Update: 7:48 PM ET Jun 19, 2006

Dr. Gary A. Tobin is an expert in philanthropy and president of the Institute for Jewish & Community Research in
San Francisco, California.

SAN FRANCISCO (MarketWatch) -- As recent college graduates leave their campuses, they can be sure of one thing: Their former campuses will keep tabs on them, and send them fundraising solicitations. At first, the expectation for dollars will be small. But as time goes on, the old alma mater will get bolder, and ask for major gifts.

How should recent grads react to these pleas for donations? With caution.

As someone who has studied how university administrators treat big donors, I can assure recent graduates that they are in for a rude awakening.

First rule: If you write a check, don't expect it to be used for grand and lasting purposes, such as the bestowing of scholarships on needy students. Rather, your gift may be used to simply backfill last year's budget holes.

Second rule: Prestige is no guarantee your wishes will be followed. At Princeton University, administrators allegedly mishandled a $650 million endowment and the matter is in litigation. If someone leaving a $650 million endowment feels taken for granted by an Ivy League university, how much appreciation will you get for your $50 gift?

Third rule: Even when you graduate to high dollar status, administrators still will rarely care what you really want. Sure, large donors get the fancy ceremonies and plaques, but most college administrators would rather sit through an organic chemistry exam than be told by a donor what to do with a major gift.

So, should the recent graduate and aspiring philanthropist look for another cause to support? Not necessarily. There is a reason why we spend more than $170 billion of taxpayer and philanthropic dollars each year on colleges and universities. They serve an important purpose. We need strong universities.

Still, I've worked with countless donors who have grown weary of the mistreatment they have received at the hands of campus administrators. They are willing to support campuses -- they ask only that universities earn that support and honor donor intent.

With that in mind, I propose a few simple rules that all donors -- young and old, rich and not-so-rich -- should follow when the alumni solicitation folks come calling:

1. Donors should demand accountability. When teachers want to know what their students have learned, they schedule an exam. Donors should subject their donations to regular public audits.

2. Donors should demand financial honesty. When students lie or cheat to get ahead -- and are caught -- they pay a price. The same should be true for administrators who overcharge donors for administrative fees, to give just one example of financial dishonesty.

3. Donors should demand that grant conditions are met -- even if the donor loses interest in the institution, or passes away. Administrators have no right to claim twenty years after the gift is made that the original intent is no longer relevant.

4. Donors should insist that the university live by its ideals. Students are taught to stick to the facts, respect others, and embrace the values of the university. Shouldn't university administrators do the same when it comes to the hiring of faculty, the inviting of campus speakers, and so on?

5. Donors should insist that their wishes be met without being bullied by administrators or faculty. If donors are abused by the people who staff universities, they should feel free to take their money elsewhere without being accused of McCarthyism.

6. Donors should shape the institution they have supported -- after all, there are many deserving institutions and causes are in need of funding.

To be sure, this is not a one-way street. Recent grads know that certain academic issues, such as the development of curricula, are best left to faculty and administrators, with student input, of course. And philanthropists of all stripes cannot, as one recent donor has attempted, claim ownership over the patentable innovations that result from their gifts to campus labs.

These rules are not designed just for budding and veteran philanthropists -- they are also for the public as a whole. Most universities are tax-exempt organizations and, like all non-profits, enjoy the implicit subsidy of all taxpayers. If even recent graduates writing small checks follow these six basic rules , university administrators will begin to learn that beyond the ivy-covered walls it pays to be good to people on the bottom rung of the ladder. They just might make it big one day.