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Donors to Universities: You Want to Put My Money Where?


Strapped colleges try to quietly repurpose restricted gifts.


The portfolios of many universities have taken a hit in the market downturn, and some schools are responding by dipping into endowments or selling off artwork and campus radio stations.

The action has increased tension among alumni, who seek tighter restrictions on how their gifts are used, the Wall Street Journal reports.

Colleges say their portfolios lost an average of 23% between July 1 and November 30, 2008 - and the market has declined further since then. Donors are cutting back, too, and schools are preparing for the steepest decline in giving since 1975, when contributions dropped 3.6%.

But starvation isn't exactly imminent. Last year, donors gave a record $31.6 billion to colleges and universities, the nonprofit Council for Aid to Education reported.

And a number of corporations have explored gifts to or partnerships with universities, including: Nike (NKE), Coca-Cola (KO), Barnes & Noble (BN), Pfizer (PFE), Merck (MRK), and Pepsi (PEP).

Cracking into gifts made for a specific purpose has sparked lawsuits. Tulane's decision to close Newcomb, its women's college, has sparked legal wrangling between the university and a descendant of Newcomb's founder.

In Minnesota, a legal fight has raged between St. Olaf College and donors to radio station WCAL since the school sold the station 5 years ago.

In Nashville, Tennessee, Fisk University faces a legal challenge to its decision to sell paintings donated to the school by artist Georgia O'Keeffe.

Part of the problem is that many university administrators, acting like the true bureaucrats they are, want to operate as they have in the past, and refuse to make significant cuts. It may be time for some schools to specialize - and perhaps a few Podunk colleges should close.

Start with the basics: How many English majors does the world need?

A solid grounding in literature enriches a student's life, and basic reading and writing skills should be required for all undergraduates. But a BA in English prepares students for what, exactly? How many PhDs who specialized in Chaucer's cuticles do we need? Perhaps graduate programs at second- and third-tier schools should shrink, and a few should vanish entirely. The money saved could be used to build a school's strength in other fields.

Fat chance. Graduate students are an endless source of cheap labor at universities, routinely teaching freshman composition - drudgery no administrator interested in his own continued employment would force on a tenured faculty member.

A similar argument could be made for law school. Chances are, Pluto State University isn't turning out future Supreme Court justices. Able practitioners are needed to turn the wheels, but many have noted the US turns out too many shysters and too few engineers. Do we need hordes of lawyers from so-so schools, and more to the point, can we continue to afford them?

We don't need a top-down government program dictating the future shape of American higher education. But a dose of rationality would help, and the current economic downturn may force reality on reluctant college administrators. A few savvy university chancellors may ask: What do departments of film theory, or popular culture, or the age of Aquarius, really add to human knowledge?

This isn't a call for abolishing the humanities or classes in oddball subjects. It's only to note that a lot of people make a good living in tangential fields that have become overcrowded. The smart administrator might consider protecting the school's core by cutting the superfluous. With a little thought, that could be done without selling off the school's silverware and angering large donors.

And what in the hell is sociology all about, anyway? Graduate students joke the key to success in the field is simple: State the obvious and wrap it in footnotes and jaw-breaker jargon.

Brilliant: Perfect training for the next generation of eminently productive and indispensable bureaucrats.

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