Why America’s Biggest Donors Dig Deep for Their Alma Maters

Colleges and universities are the top draw for America’s richest donors.

Nearly half of the 65 gifts of $5-million or more made by donors on The Chronicle’s Philanthropy 50 list of the most-generous donors of 2010 went to institutions of higher education, a fact that may rankle some philanthropy critics who question whether the mega-wealthy are doing enough to support organizations that serve people in need.

During the golden years of 2006 and 2007, when big sums were flowing to all kinds of nonprofits, a smaller share of top donors’ big gifts went to colleges and universities (21 out of 93 and 26 out of 89, respectively).

Donors and nonprofit officials say the popularity of colleges stems from gratitude people feel toward their alma maters, the opportunity to support cutting-edge research, and a sense that strong universities are key to maintaining America’s competitive advantage.

What’s more, many colleges have big ranks of savvy fund raisers who begin cultivating students as donors even before they graduate.

The chance to place one’s name on a building does not hurt, either.

“There are a group of people who give to have their names on buildings, and that’s the easiest place to have your name on a building. It’s considerably cheaper than Lincoln Center,” says Edward H. Merrin, an art dealer who, with his wife, Vivian, were No. 33 on The Chronicle’s list of top donors for their gift to Tufts University, in Medford, Mass.

Support for Scholarships

But like a handful of university donors in 2010, the Merrins earmarked their money not for a building but for scholarships. Mr. Merrin—who, like his children, is a graduate of Tufts—cited the opportunity to change young people’s lives as influencing his gift.

The donor said that at a meeting of board members, he heard stories of bright young students who could not afford Tufts: “If you’ve ever seen a board of directors weep, that was it.”

Other donors who earmarked their gifts for scholarships include T. Boone Pickens (No. 8), the late Mary E. McKinney (tied for No. 41), David M. Rubenstein (No. 40), and Jan T. and Marica F. Vilcek (No. 44).

Many colleges, meanwhile, are making an even bigger push to raise money as they lose support from state governments and their endowments remain depressed. That pain may be part of the reason that universities continue to have so much success with big donors.

“Obviously, governmental aid to colleges has been reduced,” says Eli Broad (No. 5), the philanthropist whose foundations have supported medical research at universities, among other causes. “Colleges and universities are hurting, and people want to be of assistance.”

Unusual Programs

Some of the university gifts on this year’s Philanthropy 50 list were for unusual centers and programs. Paul G. Allen (No. 31), a co-founder of Microsoft, pledged $26-million to help Washington State University build its School for Global Animal Health, which conducts research on diseases transmitted from animals to humans.

Mr. Allen has been traveling to Africa more frequently in recent years and liked the idea of linking his work there to research at a university he had attended, according to both the vice president of his foundation and his spokesman.

Cornell University, in Ithaca, N.Y. received $80-million for a new energy institute from David R. Atkinson, a retired money manager, and his wife, Patricia (No. 14).

That continues a trend evidenced on last year’s Philanthropy 50 list, when four of the top donors made gifts to help universities conduct research on clean energy.

While young donors seem to be favoring other causes, nonprofit experts say universities aren’t likely to lose their allure for top donors any time soon.

“Even the wealthiest universities and wealthiest cultural institutions can tell you how much better they would do and how many more people they would serve if they had more money,” says Richard A. Mittenthal, president of the TCC Group, which consults with nonprofits and philanthropies. “That’s a compelling argument.”