Thu 10 Nov 2005
So… Why Give If Your College Has a Big Endowment?
Posted by admin under Education News
Posted at 10:33 amBen Stein had a piece in The New York Times on November 7th discussing why alumni should give to colleges and universities with large endowments. Well, that’s not quite true — he was talking about a specific case, Yale, where he went to law school.
His November 7th essay was actually a follow-up to a column that he wrote several weeks earlier. As he paraphrased on November 7th, he posited on October 23rd,
Yale has such a wildly successful endowment and makes so very much money from it that the sums dwarf what it is possible for us as alumni to give, unless we are fantastically rich. Our contributions to Yale are trivial compared with its investment return, while the same donations could be so much more meaningful to smaller. nonprofit groups- like ones that help veterans or lost dogs and cats. I also pointed out how much the Yale endowment director, David F. Swensen, is paid, and wondered if that was right.
Well, he apparently got a ton of e-mails, letters, and calls about that stance, and the November 7th column was a bit of a back-pedal job. However, his revised view is one I find interesting — and certainly one that I subscribe to: Yale deserves his support not so much for logical reasons, but for the humanity of the place. He says, “I’ll keep giving to Yale, and with a full heart, for the memory of Henry Varnum Poor and the many other kind souls of New Haven. Not everything is about reason.”
He explained,
[My giving] has to do with a man named Henry Varnum Poor, the scion of an old New England family. He was either associate dean or assistant dean of the law school when I was there, covering subjects like financial aid and admissions. He was a dapper, bald-headed fellow with steel-rimmed glasses that evoked New England rectitude, and he wore supercool J. Press checked sport jackets. He sent me the treasured letter of admission in the spring of 1966 that told me I had been accepted.
When I entered Yale that fall, I was totally stunned by what I found. Yale was not the “country club” that my brother-in-law, a Harvard Law graduate, had led me to expect. It was rigorous, mean-spirited and cold. I hated it. I got severe anxiety. I was wildly mistreated for anxiety symptoms at the Yale infirmary and got severe drug reactions. Then I got colitis and lost about 30 pounds in about six weeks. I was a wreck. I went to Dean Poor and told him that I wanted to drop out. He fixed me with his Yankee blue eyes through those austere glasses and said something like this: “We have a commitment to you. We want you to graduate. By all means take a year or two off, and when you want to come back, anytime at all, we’ll take you back. And we’ll help you with your expenses with loans and grants.”
I was deeply impressed. In fact, I did take a year off and worked as an economist at the Commerce Department in Washington. I soon realized that working was a mug’s game compared with even rigorous law study, so I wrote to Dean Poor. He did welcome me back with loans and grants and enthusiasm. And when I came back, the law school had been sixties-fied. It was a far kinder, gentler place, with room for me as the hippie, Black Panther fund-raiser, antiwar demonstrator, faculty-baiter and tormentor I soon became.
Despite all that, Dean Poor kept my loans and grants coming. Despite the fact that I, my own little self, drove off campus one of our star professors of antitrust, no one in the administration stopped me from being valedictorian (by election, not at all by grades). They were good to me. They were a family to me. They let me take a film class from Stanley Kauffmann, the great film critic, that changed my life and set my trajectory for eventual Hollywood landing. They went far, far beyond what I could have expected. I shed bitter tears when I left the Sterling Law Buildings.
So here’s my point, if I may: It is probably not an economically rational act for me to give my few shekels to mighty, multibillionaire Yale. It would be far more rational for me to keep them myself or to give them to smaller charities. But not all decisions are rational. Yale went far beyond the rational to offer me a place back when I dropped out. Yale went far beyond the rational to be as generous with financial aid as it was. It did not have to let a rebel rouser (to borrow a Duane Eddy phrase) like me have free run of the school. But it did, and I was a happy young man because of it. I owe Yale for what it did, and what it let me do.
And for those looking for a Williams connection, there is one. Ben Stein is the son of Herbert Stein, Williams ‘35, who headed up President Nixon’s Council of Economic Advisors.
November 10th, 2005 at 1:15 pm
I’ll never be one to second-guess what people decide to do with their money, but I often think along the same lines as Ben Stein when he writes:
As someone with meaningful experience working for a very needy not-for-profit poverty relief group, I question people’s resolve to pile on the money to Williams’ 1.5 billion dollar endowment (or any other elite college’s massive endowment, clearly).
Two summers ago, I spent several weeks documenting the lives of people in destitute rural areas of the Dominican Republic, visiting families that receive aid from an organization that my family has close ties to. These people lived on next to nothing, and while the organization’s aid certainly helped, it did not go nearly as far as one would hope. Hyper-inflation in the Dominican economy was stretching the donors’ money thin, and there was clearly so much more that could have been done if we had had the means to do so.
It is very difficult to convey the emotions that took over when I saw how the other half of the world lives. Needless to say, it was a very humbling and moving experience–even for my cold-hearted bastard self. I felt like a complete jackass shooting photography with photo gear that was likely worth more than what a family of seven would survive off for several years. I only hoped that, through my images and writing, those who had never experienced such ways of life could really and truly see and feel how our fellow human beings live.
In any case, Ephbloggers will notice that I often question why a college education needs to cost so much, or why elite colleges collectively choose to spend an obscene amount of money educationg the majority of which are the most over-privileged children in the world. As I mentioned before, I will be the last to question the freedom a person has to spend their own money as he or she wishes.
At the same time, however, I question whether this focus on donating heaps of money to our immensely wealthy alma maters takes focus off of using our money for some greater good. D. Kane himself mentioned how charitable giving is a zero-sum game. Given this, I ask all of you to pause before you write your next check for x-thousand dollars to [fill in the blank] elite university; perhaps consider how much more good this money could do for a huge number of South Asian earthquake victims or people living in deeply disturbing poverty in Africa.
I hate to say this, but given the truly worthy causes I’ve seen with my own two eyes, I will not likely donate any money to Williams in the near future. Somehow I believe that Ephs can do without one more $1000 Herman Miller chair in Schow, while a great number of families in my country of descent (the Dominican Republic) have a much greater chance of survival with the same donation.
November 10th, 2005 at 3:10 pm
What charities and institutions to support is an interesting question, and one that all thoughtful folks seem to grapple with, just as Ben Stein did.
My calculus is as follows. There’s way too much wrong with the world and I make way too little money to fix everything that should be fixed. So rather than take the macro view, I take the micro view: I give to institutions that have touched me in some way. The list includes Williams College, Children’s Hospital in Boston, the Boston Museum of Fine Arts, the Peabody Essex Museum, and WGBH in Boston.
Upon reflection, I think I do for for two reasons. First, it’s a coping mechanism: given my attention to detail, I’d have to do serious research to decide if CARE, Unicef, the Red Cross, or Save the Children gets my dollars, and then I’d still worry if I made the right choice. By supporting institutions I know, I avoid that time sink. Second, I interact with those institutions, and can see if my money is being used productively. I worry that if I give my money to an anonymous charity like the Red Cross, that the money may be skimmed off by a baddie in a Third World country. It probably isn’t, but I want to make sure my money goes towards the cause, not to crooks or high overhead. I can physically inspect Williams College; I can’t inspect the Red Cross.
And some institutions lose my support. I used to belong to the Sierra Club, until I got sneering phone calls intimating that my $200 wasn’t enough. “Fine,” I thought, “$0 works for me.”
While I hope and ask that classmates give to Williams, if people have made a choice not to give, that’s fine with me. It’s only if they give to no charities or don’t donate time to any institutions that I think less of them.
November 10th, 2005 at 3:53 pm
I would encourage David R to give some amount to Williams, even if it is a token. Few have spent more time than I documenting how much money Williams wastes on unnecessary spending (e.g., here and here), but that waste does not negate the debt that all Ephs owe to Williams.
It is not for me to say how David or Guy or anyone else should divy up their charitable giving. But almost every Eph ought to give something back to Williams — for those that have gone before.
November 10th, 2005 at 3:56 pm
I feel much the same way, Guy, and that’s precisely the reason I will choose to donate my time and money to this particular organization.
My family is very committed to this given organization because it helps the people who live in the same conditions and places as they did before they came to the United States. I could really go off on so many tangents about how much seeing such poverty firsthand has changed me in so many ways, but I wouldn’t know where to begin, and I certainly wouldn’t do it justice.
What I was trying to get at, perhaps obtusely, was that we are ridiculously fortunate to live here in the U.S. as compared to other parts of the world. After seeing this so personally, it’s difficult for me to feel the need to dedicate the same level of time and money to organizations that, for the most part, only benefit some of the most privileged people on the face of the Earth.
I certainly do not mean to detract from those who donate such time and effort to their alma mater. It’s just that I wish more people would take a flying leap out of their comfort zones and briefly live around (or visit) extreme poverty in other parts of the world to see how truly fortunate we are. It certainly changed my life and how I view things for a great number of reasons. I’m sure it could do the same for others.
November 10th, 2005 at 4:04 pm
David, I’m sure you realize that I do feel like I owe something to the college. It has thus far provided me with a truly excellent education and life experience, but as an economist and a realist I also know that I will not have unlimited time and money to dedicate to all that I see fit.
As such, notice that I said “I will not likely donate to Williams in the near future“. Presumably somewhere down the line, when I’m the managing director of the prop trading desk at the firm I will be working for next year, I will have more money to give. In other words, Williams will likely have to wait a bit while I donate to organizations I feel more strongly about. I can see why this would bother those of you who feel so strongly about the college, and I apologize.
November 10th, 2005 at 7:59 pm
One way to look at it is that charitable giving occurs at the intersection of the curve of responsibility to give with the curve of deservedness to recieve, and of course the actual point of that intersection is an extremely subjective one.
November 11th, 2005 at 12:01 pm
One of the leaders in the economics of charitable giving…may be interesting to some:
http://www.ssc.wisc.edu/~andreoni/