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In June, the National University System received a $100 Million gift from a single donor to promote social-emotional learning. This mega gift is one of the dozens of big gifts received by Colleges and Universities during the 2018 fiscal year. The Chronicle of Higher Education shows that gifts of $50 Million and above were given to nearly 30 institutes of higher education in this past fiscal year.
“Big” is a relative term though. When Oregon State University received their first gift of $50 Million in January, they knew that this gift was truly transformational for their Veterinary College. Just a month earlier, Columbia University’s medical school received a $250 Million from a couple that had attended the school in the 1950’s. Both gifts are truly “big” gifts, but it’s all relative when we talk about dollars and cents versus donor inclination and institutional need. For our purposes, we can use the Marts and Lundy definition of a mega gift; donations of $10 M+.
Who Gives Mega Gifts?
According to The Chronicle in Philanthropy, several of this year’s mega gift donors have made their fortunes in the finance industry which could mean that these contributions are generated by investment savvy donors. The schools that scored some of the largest gifts this year didn’t start courting random titans of industry to earn these transformational gifts. The majority of the mega gift donors are alumni of the schools that have benefited from their generosity. Most of the supporters that have given donations of $10 M+ are repeated donors to their alma maters.
Knowing that these generous givers have been supporting the same institutions for years proves that they (and their previous gifts) were well stewarded. Schools that gain major gift investments from their supporters have developed ever-stronger relationships with the donors that have the ability to give transformational donations. They’ve invested in constant communication with these individuals. Many mega gift donors have been tapped into by their alma maters as board members and advisors so that the donors are able to contribute talent in addition to dollars – which builds the donor’s connection to the institutions that they’re supporting.
Tax Law Changes Impact on Big Gifts
Most Americans who give charitable donations do itemize their tax returns. The doubling of the standard deduction in 2018 is likely to reduce the number of taxpayers who itemize. The new standard deduction coupled with an increased exemption on the estate tax (affecting bequest giving) could result in fewer gifts, but larger donations. These tax changes could motivate supporters to bundle their charitable giving in one single year rather than give small gifts over multiple years.
Fortunately, most supporters are motivated by more than tax benefits when they make charitable contributions. Advancement personnel need to be versed in the tax laws when soliciting mega-gifts, but donors at this level will surely be consulting with their own advisors and accountants about contributions of this size.
How to Make a Big Gift Bigger
With many of the largest donations coming from supporters who have earned their wealth in the financial industry, schools have been able to learn a few tricks about growing money from these donors. In April, Amherst College announced the receipt of a $100 Million gift from an anonymous donor. There are strings attached to this gift in that it is being used to match gifts from other alumni. Wake Forest has leveraged a final $70 Million gift they received last fall from an alumnus, Porter Byrum, to challenge other supporters to establish scholarship funds or contribute to their endowment. They’re lovingly referring to the campaign as the Byrum Challenge. Smart investors are great at spotting potential for growth, and smart Advancement Teams are listening to their suggestions.
Investments Require Commitments
Higher Education continues to depend on the support of our generous supporters. Generosity can’t be measured in dollars and cents though. While mega-gifts are transformational for the Colleges and Universities that receive them, generous gifts of all sizes can be transformational for the supporters who give them. For this reason, all gifts and givers need the commitment of stewardship.
Maybe a larger gift is waiting in the future for your institution if the donor feels appreciated and sees the value of their investment. Today’s enrolled students will hopefully recognize the appreciation that their schools have for donors and strive to become incredible supporters too. Some investments take more effort than others and this applies to the Alumni and Advancement Teams to cultivate meaningful relationships with them!
Sources & Additional Reading:
[1] National University Systems, NU.edu
[2] Major Private Gifts to Higher Education, Chronicle.com
[3] Alumnus’ Generosity Impacts Future of Veterinary College, Vetmed.oregonstate.edu
[4] Roy and Diana Vagelos Donate $250 Million to Columbia’s Medical School, Newsroom.cumc.columbia.edu
[5] Marts and Lundy, Martsandlundy.com
[6] Chronicle in Philanthropy, Philanthropy.com
[7] Promise Campaign Launches Publicly with $100M Anonymous Gift, Amherst.edu
[8] Introducing the Byrum Challenge, Wakewill.wfu.edu