• August 23, 2014

For Cash-Strapped Colleges, Handling Donors' Conditions Can Be a Delicate Dance

A wealthy alumna of Earlham College recently contacted the Indiana institution's psychology department with a tempting offer: She wanted to endow a faculty position, which meant a gift of about $2-million could be on the line.

But the money came with a catch. The donor wanted the faculty member to be devoted to teaching and doing research on psychoanalysis.

"The department was not enthusiastic," Gregory S. Mahler, Earlham's vice president for academic affairs, told an audience of chief academic and fund-raising officers convened by the Council of Independent Colleges here Sunday.

The proposed focus was too specialized for the department, and efforts to reach a compromise with the donor fell short. Ultimately, the college turned down the offer.

"At the end of the day, it has to fit into how the institution sees itself," Mr. Mahler said of the potential gift. "That was a challenging time for us."

Quandaries like the one Earlham confronted were brought up throughout the day's sessions. And not all colleges would reject such a gift, whether it's because of necessity, a change in plans, a desire to pursue an appealing opportunity, or a push to meet fund-raising goals.

Colleges, both public and private, are increasingly facing such choices as they are under mounting pressures to hold down tuition amid soaring costs and decreasing public support.

Many speakers Sunday agreed that coming up with the right response requires carefully balancing hard fiscal realities with the need for academic autonomy, and each of the two administrative divisions represented at the conference tends to view this balancing act from very different vantage points.

The difference is most starkly expressed, said many speakers, in how each division views donors.

Fund raisers want engagement, said Thomas W. Young, vice president for institutional advancement at Gustavus Adolphus College, in Minnesota. "It's never a straight line for a fund raiser," he said. "It's always a circle: engagement, communication, gifting."

But Mr. Young also acknowledged that donor interest can sometimes cross the line into interference. Some donors may want to have a say in the minutiae of planning a building, or in the hiring and firing of faculty, or in whether a relative gets a spot in next year's entering class.

Many provosts and professors, however, often see a donation as a one-way transaction, said Edward J. Kvet, provost of Loyola University New Orleans. "On the academic side, we just want them to be there in name only," he said, which runs counter to the fund raisers' desire to make the donor feel involved. "How do we reconcile those?"

The first step, said many speakers, is clear communication.

Academic and advancement officers should meet regularly, perhaps once a month, so that each one better understands the other's perspective and plans.

It's also important to be frank with donors, said several speakers. Sometimes colleges convene advisory groups of well-connected and deep-pocketed outsiders, but are not upfront about what they want them to do. "We have expectations that we want them to give money and leverage other gifts, but we don't say that," Mr. Kvet said. "We use the pretext that we want to hear their advice."

This leeriness to ask for a "membership fee" from such groups can cause misunderstandings. "Be careful what you ask for," said Mr. Young. "If you ask for their feedback, you're going to get it."

It is equally important to match a gift with a predetermined purpose, preferably one already identified in the strategic plan, many speakers said. Otherwise, said Mr. Young, colleges "run the risk of the tail wagging the dog."

But it's not always a bad idea to grab an opportunity, said Mr. Mahler, of Earlham. At his college, a prominent alumnus recently said he and his wanted to help start a program in Chinese studies. Such a program was not in the college's strategic plan, but Mr. Mahler and James McKey, vice president for institutional advancement, met often enough that they recognized that faculty members had been hoping to expand the college's international offerings. Some professors already thought China's absence among the college's offerings was notable.

With a gift of $125,000 from the donor and his wife, Earlham sent 14 faculty members to China for a month last summer. The faculty members, who spanned disciplines, wrote frequently to the donors to say what they had learned during their travels and how they were going to apply it to the curriculum. The donor and his wife were satisfied. "The goal of having an impact on the institution was totally and consistently made clear to them," Mr. Mahler said.

The college has raised another $125,000 to send 12 students to China this summer, and the donor, who is now a board member, has encouraged another donor to give $100,000 to support the effort.

Not all new and unplanned ideas end well, of course, and Mr. McKey said he and his staff more often see a poor fit in a potential gift than they see a good one. "Many times we have to find the right way, the polite way, to say 'no' to somebody."

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