Donors Target Gifts To Their Interests

October 22, 2007
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GRAND RAPIDS — A philanthropist group recently established a nonprofit that offers tailored philanthropic advisory services to donors who invest in higher education.

The mission of the Center for Excellence in Higher Education is to “promote change” by helping donors take an active role in shaping, supervising and monitoring their gifts to higher education — even if it means attaching legally binding restrictions or conditions on them.

It appears that donors in West Michigan aren’t taking it quite that far.

Lynda Hunt, director of the development accounting office for Western Michigan University, said she isn’t seeing any restrictions put on gifts, with the exception of donors dedicating their gifts to specific educational programs or fields of study, which is a very common practice.

“We won’t take it if it has strings attached,” Hunt said. “They can restrict it to programs that we have at the university, but if they attach strings to it where they want to have control over the actual expenditures, we won’t take it.”  

Bob Berkhof, Calvin College’s senior associate to the president, said Calvin donors aren’t putting more restrictions on their gifts, but the college is seeing the same trend toward what he calls “putting a face” on a gift.

“We’re seeing that donors want to see their gifts directed at programs that better meet their interests,” Berkhof explained. 

Calvin just announced a $150 million capital campaign and is talking with potential donors about where they might wish to designate their gifts, such as to scholarship funds, faculty research and development, or capital projects, such as the new athletic center and a campus commons that Calvin is going to build, he said.

Scott Wolterink, vice president for college advancement at Hope College, said individual donors haven’t been putting more designations or restrictions on gifts. However, a high percentage of corporate donors do, with greater expectations for stewardship or return on investment. One of his roles in advancement is to educate and inform a donor as to how a gift would best serve the college and its students.

“If they have a specific area of interest or a specific program or even a preference for helping a student from a specific geographical area attend Hope, of course we will work with them on that,” Wolterink said. “We just try to make sure it is as unencumbered as possible so that it can actually get awarded.”

Occasionally, a donor may be so specific as to how he would like to restrict his gift that it can’t get awarded, Wolterink explained. For instance, Hope may not have a student who applied from the particular high school or region that a donor wants to favor with his gift, so the money can’t be awarded.

“That can be very dissatisfying, not only to the donor but also to the college, when there are monies there that could have gone to help someone else,” Wolterink added.

All nonprofits and every group seeking financial support prefer unrestricted gifts, he said. If a gift is left to the discretion of the board of trustees to designate toward specific needs or projects, that’s the ideal gift, Wolterink said.

Grand Valley State University’s Todd Buchta, assistant director of the Grand Valley University Foundation, said the university believes that donors are more concerned today about how their money is spent: They want more information and want to be able to see more impact.

“That’s really fine with us. As a young university that’s very dependent on growing its donor base, it’s very important to us to support that relationship with donors,” Buchta said. “So we really want to share as much (as possible) about how the money is spent.”

If a lot of restrictions are put on a gift, it may legally no longer be a gift; it comes close to being a contract, Buchta pointed out. He believes donors have become more cautious about how nonprofits in general are spending money, and donors want more scrutiny. The majority of donations GVSU receives are unrestricted.

“Any CEO or university president will tell you that unrestricted money will allow them to be flexible and to direct funds to where they’re most needed,” Buchta said. “But sometimes the biggest needs aren’t always the most attractive for donors if it involves less exciting things like building maintenance or utility upkeep, rather than a glittering, new building.”

Michigan State University’s Bob Thomas, director of annual giving and marketing programs for university development, said MSU has seen “tremendous” growth in fund-raising for endowment. Endowment funds are invested long term and provide a stable investment pool from which the university draws funds to support scholarships, professorships and improved educational facilities, innovative programs and learning opportunities. The university just completed a capital campaign that raised nearly $1.44 billion. The goal was $1.2 billion.

In addition to the overall goal, the campaign raised $476 million in endowment funds and $250 million in planned gifts, which exceeded both the goal for endowment and planned gifts.

Thomas said, “That could not have been possible if donors didn’t believe in us and trust us with their resources.”

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