How Should Alumni Think About Giving Back?

(Photo: freshwater2006)

Antonia writes in with a conundrum:

As a graduate of three private schools (K-8, high school, and college), around this time of year I receive a slew of letters, emails, and phone calls asking me to pledge to various annual funds. I’ve always been told by my parents that I should support my former schools financially because alumni giving rates directly correlate to the prestige of any private institution. In other words, by giving even the minimum of $20, I’m ensuring the value of my diploma. Is this true?

Like many other recent graduates, I have a large amount of debt and not a large amount of income, so my budget only allows for very small donations, typically adding up to less than $100. I would rather give my money to a charity that truly needs it than to a school with a multimillion dollar endowment, but, with the amount that I have invested in my education, I want to make sure that my diploma remains valuable. I’m hesitant to believe that my choice to contribute to an annual fund and bump up the alumni giving statistics by a fraction of a percentage point is really that significant, but there’s also the issue of social capital. Since these schools all publish annual reports detailing who gave money, and how much, alumni and parents may see my name if it appears on the list, and this might make them consider me more favorably if I’m networking or asking them for a job. I might also gain more esteem from my peers.

So, to sum up: will giving to my alma mater’s annual fund benefit me more than donating that same small amount of money to a cause which I personally care about, such as Planned Parenthood or a local animal shelter?

I think Antonia has already answered her own question — yes, giving to her alma maters will likely benefit her more than giving to an animal shelter. But she plainly has a number of points worth considering: whether a small gift indeed affects the reputation of her school; whether her being listed as a giver is truly a benefit to her (or if, instead, being listed as a very small giver might actually backfire); whether even a small gift ensures her future offspring a better chance to go to the school; etc., etc., etc.

So let’s open up the comments here and let Antonia know what you think, and how you approach this same dilemma.

TAGS:

Leave A Comment

Comments are moderated and generally will be posted if they are on-topic and not abusive.

 

COMMENTS: 47

View All Comments »
  1. Freddie says:

    Most people don’t realize this, but at a public University, tuition and funding from the state make up a VERY small percentage of the revenue it takes to fund the school. As a cost v. value comparison, you might compare your cost of tuition to your income potential for your years after college. Presumably, your education has allowed you to earn an income, and over time that income will greatly exceed the cost of your education.

    Large contributions to an organization’s endowment spin off revenue for faculty salaries, scholarships, and other very definable needs. Annual giving is typically what covers the remainder of an organization’s yearly operating expenses. At my school these operating expenses include maintaining our facility and keeping it up-to-date, ensuring our curriculum evolves with the times, and paying for resources that directly support our students, faculty, staff, and alumni. Where would our students learn if we didn’t have a building? How would they be prepared for today’s job market if we were still teaching the same courses we taught in the 70s? Without the funding for career counselors, how would our students get the best opportunities for internships and jobs? All of these resources are of vital importance, and contributions to our Annual Fund go to work immediately to help support these crucial needs.

    Although gifts to the Annual Fund are unrestricted, I would make the case that participation in annual giving is perhaps the most tangible way to give back to your school. Your money is spent almost immediately after you give it to fund the school’s most pressing needs. And it does make an impact over multiple areas. It helps to pay for your favorite professor. It helps fund the student organization that you were involved in. It helps provide physical space for students to study and learn. It helps to strengthen the student experience.

    It’s easy to think your $20 doesn’t make a big impact, but what if every donor felt that way, and decided not to invest in the school? Annual giving allows each and every donor to be part of a larger initiative to ensure the success of their alma mater. It’s all about the power of numbers, and small gifts from multiple donors really do compound. The outcome is a series of causes-and-effects that do result in increasing the value of your degree: The school stays strong from year to year – it has the financial resources it needs to educate exceptional graduates – those graduates go out into the world and demonstrate the value and power of their educational experience – their companies are happy and continue to recruit at the school (while also reporting favorable information to ranking organizations) – future students have access to post-college opportunities – everyone is happy and the school’s reputation gets better and better – which means that as a graduate of that school, YOU are more desirable to hiring managers.

    Thumb up 3 Thumb down 4
  2. Billy D says:

    It occurred to me a couple years ago that it’s generally in my best interest NOT to donate to my university alma mater. Why?

    1. If my alma mater has less money, they will have to raise tuition and/or lower costs. If they raise tuition, fewer students will attend and it will be a more prestigious degree. I don’t want every yahoo in the state to have what I have.

    2. Those graduates are my competition in the job market.

    I suppose it might be in my best interest to donate to specific funds that raise education quality or prestige. But it is probably not in my best interest to give to student scholarships (the most common kind of request I get). I want my potential employers to think I attended the school with $30K annual tuition, even though it was less than $10K when I went there!

    Well-loved. Like or Dislike: Thumb up 10 Thumb down 2
  3. Eric says:

    One of the things that people need to consider before donating is the oppertunity costs associated with giving the money to the school. Was is the next best alternative for donating specifically to the school?
    For instance will you get more out of donating to the school versus paying off your student loans faster (which could lead a decrease in interest you might pay).
    Taking how much money you spent on your education into consideration is a sunk cost, you can’t recoup the amount of money you have already spent on your education; however, donating to the school can lead to your degree looking more valuable.

    From a personal standpoint, until I know specifically what the donation will be used for, I will not donate back to my university.

    Thumb up 1 Thumb down 1
  4. PM24 says:

    It’s not just the alumni…….I am the father of an undergraduate at a horrifically overpriced and elite (just ask them) university. Beyond the 50+ large I need to come up with each year, we are now asked to contribute to something called a “parents fund.” I do get it: with an income of $200k a year I will take the hit to send my kid to this school, and I have made peace with that fact. Somehow this asking for another few hundred bucks just sticks in my craw.

    I have made clear to my child that he doesn’t owe this school anything after graduation; his education was bought and paid for at full retail.

    Well-loved. Like or Dislike: Thumb up 8 Thumb down 2
    • Julie says:

      This argues for the value of giving scholarships – a student whose university made a difference to them at an important time will think of them far more fondly than a student who can buy any education they want.

      I understand the “doesn’t owe” bit – but does your ability to pay “full retail” mean that there are no reasons to give more? Instilling in your son a sense of gratitude and of being fortunate may be a good idea; giving to a university is a great way to give other students the opportunity their parents may not be able to afford them.

      Thumb up 4 Thumb down 5
  5. reality says:

    The reality is that all charitable giving is self-interested. It’s either about signalling that you’re a good person or more tangible benefits.
    If you truly are not self-interested then you’d donate all spare funds to a charity that is highly effective at impacting the most lives possible (perhaps via one of givewell.org’s researched charities). Even there you’re signalling something.
    I think the best way to donate is to acknowledge that you’re self interested and have many ways of satisfying your utility. You then can divide your charitable giving by those interests into a portfolio, so maybe $20 goes to your college, $50 goes to your friend’s walkathon, $30 goes to charities with proven track records of effectiveness. Trying to pretend that charity is true altruism is just confusing and leads to indecision.

    Thumb up 3 Thumb down 4
    • Erik Jensen says:

      I think that there is a self-interested component to some (not all) charitable giving and I am certainly guilty of this. In my case, I give to funds that directly benefit my major. I’m sure that part of my motivation is to maintain good relationships in case I should need a favor from a former professor. I also give to the foundation of my employer, a college. I know that administrators looks at the list of donors and it can’t hurt to be seen as one of the good guys. My advise to the donor would be to donate to something very specific. It can be both emotionally satisfying and provide some social insurance.

      I would add that it makes no sense to donate when you have a significant burden of educational or consumer debt. Pay that stuff off quickly and then be pseudo-magnanimous.

      Thumb up 0 Thumb down 0
  6. James says:

    I get the begging calls from my university (got one last night, in fact) even though I’m still a PhD student, which seems to say something about the basic competence of their fundraising department.

    I might not be nearly so reluctant to donate if they didn’t keep cutting academic programs in order to provide even more money to their already over-funded athletic programs.

    Well-loved. Like or Dislike: Thumb up 13 Thumb down 2
  7. Travis says:

    I personally take a pragmatic approach to all of my giving. Having recently graduated with a debt of over $100k, I find it almost insulting that my alma matter would ask for a contribution in such a dire economy. It seems … weird that they would extract so much out of students in the form of 6 digit tuitions, and then STILL need their support IMMEDIATELY after graduation…

    I think it’s also fiscally irresponsible to give money when you are deeply in debt. Once my education pays for itself, and I’ve been able to pay off my loans and have some expendable income, then and only then will actually giving to my alma matter come into the picture for me.

    Well-loved. Like or Dislike: Thumb up 5 Thumb down 0
  8. Doug Kiley says:

    If you are proud of your alma mater and the fond memories from there outweigh the negative ones, then send $20. Plain and simple.

    “I’m hesitant to believe that my choice to contribute to an annual fund and bump up the alumni giving statistics by a fraction of a percentage point is really that significant”

    That fraction is significant! Your alma mater borrows from a bank. Let’s say the bank sees that 75% of the class of 2005 gave a modest sum. While the “yield” from that class is modest in 2012, said bank knows the yield in 2030 will be substantial since that class clearly is proud/nostalgic of their alma mater! (and most likely will still be proud in 2030) Therefore, the alma mater is a safer bet for the bank. Then the alma mater has a lower interest rate equaling thousands of dollars saved.

    Thumb up 4 Thumb down 4