Why you should care
Because for many alumni, long-term student loan debt is a perfectly sufficient form of indebtedness.
Congrats, you’ve just paid off that pesky car loan! Now why not make a donation to Honda to help others like you benefit from a similar car-driving experience?
It sounds insane, but that’s exactly how college development officers soliciting donations sound to some of the financially strapped alumni they have in their sights. Yes, a university is probably a better object of your munificence than a car manufacturer — it conducts trailblazing research, educates future leaders and does many other things that have societywide benefits. Plus, it’s a rare car dealership that lets you tailgate in its parking lot on a Saturday afternoon.
Still, doesn’t asking someone who has already ponied up tens of thousands of dollars for an education to give more, sometimes to a very well-endowed institution, seem a bit much? “I actually laughed out loud when they sent me the first couple of letters asking me to give back,” reads one typical comment on an online forum discussing the practice.
Should we feel obligated to provide ongoing financial aid to our alma mater?
If you’re thusly grousing, you are in good company. Just 20 percent of private U.S. college alums and a meager 7 percent of public college alums gave back, according to a 2013 report by Blackbaud. One reason is what researchers called an “annoyance effect” — especially among students who took out loans to go to university, according to economists Jonathan Meer and Harvey Rosen. In their findings, annoyance was not tied to income level, either. Even those whose backs are not bent by onerous debt are fair to question the ask, what with its hint of eau d’obligation. Some would prefer not to support a fundraising operation that they view as existing in part to bestow admission preferences on the children of wealthy donors.
Of course, universities say they rely on alumni giving to offset the cost of tuition, which is subsidized in part by the beneficence of students’ predecessors. Alumni donations, says Brian McDonald, a former vice president for development at Princeton, actually open up the college gates wider, via need-blind admissions and scholarships. As such, they’re a way of “paying it forward by supporting future generations of students and scholars.”
And there are selfish reasons for alumni giving that don’t include securing admission preferences for one’s progeny, or better seats at the football game. “Alumni should consider their diplomas like a share of stock in a company,” says Hank Coleman, publisher of the personal finance blog Money Q&A, arguing that alumni have a vested interest in ensuring that the prestige associated with their college and degree grow in value.
Alumni donations, and charitable giving on the whole, as Meer reminds us, are largely driven by what economists call “impure motives,” which is not a pejorative term. It just means that a donor’s “warm-glow giving” is motivated by more than a purely altruistic interest in the charity itself. For those of us with a strong affinity for our school, regular giving will continually warm the cockles of our alumni hearts. Others may choose to give back elsewhere or, perhaps, pay down debts in anticipation of that warm glow they will get when that college loan is finally retired.
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