No limits?: The Power of Giving

In my last column, I detailed the stark fundraising differentials between Grinnell and peer liberal arts colleges Carleton, Swarthmore and Amherst. What is clear is that a “Giving Gap” exists, with peer institutions fundraising substantially more from their alumni bodies than Grinnell. But what is also apparent is that Grinnell can improve its fundraising dramatically. This column will detail the power of giving.

Compared to other revenue sources, fundraising represents the easiest way for Grinnell to finance projects. For example, suppose Grinnell wanted to raise $1 million to supplement the annual budget. The college’s three revenue sources are the endowment, net student revenues and fundraising. The annual endowment payout rate is 4%: to raise an extra $1 million Grinnell would have to increase its endowment value by $25 million, or approximately 1.67%. Grinnell’s discount rate (financial aid provided to students divided by tuition and fees) is 61.4% since most students do not pay “sticker price,” meaning that to raise $1 million from net student revenues, Grinnell would have to increase its comprehensive fee by over $1,000. Alternatively, every one of Grinnell’s 19,507 alumni could donate $52 every year for a total of $1 million.

It will be several years before Grinnell can hope to close the $22.2 million fundraising gap with Carleton. But that is not cause for discouragement: major progress can be made with marginal improvements. In 2012, gift revenue increased by 27% to $6.6 million even though only 32.6% of solicitable alumni donated to Grinnell. If Grinnell maintained the last year’s average gift size of $1,033 but pushed its participation rate past 50% (where Carleton is), total gift revenue would exceed $10 million: an over 50% increase! And if half of all 19,507 Grinnell alums donated an average of $1,000 (which sounds high, but is still less than the average alumni donation for Carleton, Swarthmore and Amherst) then total gift revenue would approach $20 million.

Why do donations matter? Simply put, they provide the foundation for Grinnell to expand, adapt and improve. Facilities upgrades—including Burling, the ARH and Forum South Lounge—will be majority funded by gifts. Alumni gifts contribute to everything from financial aid to summer internship funding. Gifts can even be restricted to support specific initiatives of a donor’s choosing. Want Grinnell to become carbon neutral and build a wind farm? Want to preserve the Classics department? Want Grinnell to maintain need-blind admissions? These projects can all be achieved through donations. And while Grinnell will naturally seek to improve itself and allocate its budget efficiently, gifts allow the College to truly excel by taking its facilities, personnel, programs and students to the next level.

It is important to remember that philanthropy should never be taken for granted. Not everyone is in a position to contribute financially and there exist myriad ways to support Grinnell. But at the end of the day, we cannot deny that a giving gap exists between Grinnell and peer liberal arts colleges. Donations represent more than a windfall: they are required to maintain an elite liberal arts college, and a lack of resources will ultimately leave Grinnell unable to compete with colleges like Carleton, Swarthmore and Amherst. Are we really to believe that Grinnellians are less enthusiastic than Carleton alums? Grinnellians give their time and money to transformative causes and organizations all across the world while neglecting their alma mater.

These are unstable financial times for colleges, with traditional revenue sources under pressure. But that is all the more reason to give. Grinnell needs its alumni to support it now more than ever. Every donation counts, no matter how large or small. And everyone has a reason to give.

Give if you valued your time and education at Grinnell and wish to provide that opportunity to others. Give because the generosity of Grinnellians before you contributed to your college experience. Give if you believe Grinnell is a special institution that empowers students to change the world. Give if you are proud to be a Grinnellian. Give if you believe in the power of giving.

 Ishan Bhadkamkar ’13 is an intern with the Grinnell College Investment Office.