Tuesday, September 28, 2004

 

Philanthropy and "Seed Money"

My college is a public institution, so it enjoys the blessings of public subsidies and the curses of government rules and procedures.

Like all public agencies, it’s chronically underfunded, since econ 101 teaches us that anything ‘underpriced’ (i.e. subsidized) will be overused. Since our mission is to provide access to students who might not otherwise have access to higher education, we have to shoulder a wide range of programs while keeping costs as low as possible, without sacrificing too much quality. To call it a balancing act would be generous.

As a chronically-underfunded institution, we are drawn like moths to philanthropic donations. One of the hats I’m wearing now is co-chair of one of the larger grants we’re using.

Between the vagaries of government funding and the vagaries of donor taste, I’m beginning to realize that there’s a giant hole in the funding schemes that support us.

In a nutshell, we have two main budgets: capital (fixed assets – buildings, computers, etc.) and operating (salaries, office supplies, etc.). The government likes to fund buildings and, to a lesser extent, computers. You know, Things. Governors, state senators, and the like love to stand in front of buildings at ribbon-cutting ceremonies. They don’t want any part of paying the people who work in those buildings.

Donors come in three flavors: those who like buildings, those who like scholarships, and those who like events. The ones who like buildings, (who I think are more common at the research-university level) like to be immortalized in brick. The ones who like scholarships at least understand the importance of sustaining funding over time, even if the criteria they select are often maddeningly arbitrary (must be flute majors of Irish ancestry, from one of the following boros…). The ones who like events see themselves as entrepreneurs of ideas, distributing seed money and walking away, always keen that whatever they started with their money is sustained later with ours.

None of these comes without severe issues for the college. The ones who like buildings tend to prefer cutting-edge, sexy buildings, which may or may not be what is needed at the time. (I’ve never heard of the Big Muckety-Muck Memorial Snowplow Shed.) The ones who like scholarships undoubtedly accomplish some good for some students, but most of those students would have come here otherwise anyway, so from an institutional perspective, they’re largely a wash. The ones who like events, such as the one I’m dealing with now, may actually do some long-term harm.

The problem with Events is that they require the time and effort of full-time staff to pull off, they establish expectations and precedents, and then they go away. There’s a special circle of hell reserved for whoever coined the term ‘seed money.’ Events donors like the idea of starting something, but hate the idea of sustaining it. They want whatever they helped create to outlast their donation, which means that, once the initial grant expires, it becomes yet another drag on operating expenses.

That’s not to say that many of the events lack merit; obviously, some of them are quite wonderful. That’s not the point. The point is that over time, operating budgets become laden with the overhang of long-ago funded projects, at the expense of our core operations. We can build new student centers, buy computers by the gross, and stage a never-ending series of Events celebrating All Fashionable Good Things, but we can’t hire faculty or buy toner cartridges. (Maybe we need to develop the Muckety-Muck Memorial Toner Cartridge.)

Politically, this is understandable. Donors like to see ‘results,’ which means, roughly, enduring commitments to continue to hollow out our core to gratify their tastes. Politicians like Big Ticket Items that look good on camera and sound good in speeches; saying “I made possible the hiring of three new history professors” just doesn’t have the oomph of cutting the ribbon at the new computer center. Different levels of government also sometimes make “matching funds” available for construction – I’ve never heard of matching an increase in operations.

Even if, somehow, some exceedingly insightful and generous donor were to set aside an endowment to fund continued operations, the legislature would simply reduce its contribution accordingly. We can’t win for losing.

Educationally, this is a disaster. Whatever else we do, at the core is the interaction of student and professor. That’s the one thing I can’t get money for.


Comments:
What about endowed chairs for professors? Granted, they're pretty rare, but they are one example of donations with an eye towards long-term funding.
 
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