Friday, April 17, 2009
Stephanie Strom of the New York Times reports that colleges are finding scholarships a more effective goal for fundraising than buildings or new programs, common fundraising goals just a year ago. Donors understand that more students need financial aid now, and many colleges have increased the aid available to their students. To do that, the colleges need to raise money and are turning to donors for help.
Although giving is down, donors are responding to the need for more financial aid. The annual giving director at Hamilton College reports that annual giving for that school is flat as compared with last year - but "flat is the new up" so he's happy. The college surveyed alumni and learned that 90% of those who responded wanted their gifts to go to scholarships. The fundraising campaign has responded to those concerns.
Some schools have asked the donors who created endowed scholarship funds for a little extra annual gift to cover the scholarship distribution this year. A fund created recently might have fallen in value and be "underwater" (under its original gift value). If so, the fund might not be able to spend (if UMIFA applies in that state and if the college did not arrange for a different spending rule in the gift agreement with the donor). For example a fund valued at $100,000 before the market drop might have been paying out $5,000 a year as a scholarship. If the fund has dropped in value, a school might ask the donor for an extra $5,000 this year, so that the scholarship can still be paid.