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Where's the money? wealthy, diverse donors are increasingly becoming prime fundraising targets for colleges and universities.

When Draymond Green, an NBA All-Star, signed an $82 million, five-year contract with the Golden State Warriors in July 2015, he could have done anything with that money. What he did was surprising.

A few months after signing his new contract with the Warriors, Green made a $3.1 million donation to Michigan State University to renovate and build a new athletics facility and provide money for scholarships. It is the largest donation from an athlete in the history of the university and the second-largest known gift by an athlete to a university.

"Michigan State means everything to me," Green told Forbes in September. "I grew up in Saginaw and was lucky enough to attend Michigan State University where Coach Izzo believed in me and gave me the chance to succeed. I wouldn't be the person I am today without my Spartan experience and this donation reflects my deep appreciation to the university. This donation isn't just about me. I want more kids to have the opportunities I had thanks to Michigan State and want to use this to stimulate all Spartans to give back to the best university in the world."

Green is one of many diverse donors making an impact at colleges and universities across the United States. Endowments and alumni donations are a critical part of how universities keep themselves going, supporting new initiatives, building campaigns, financial aid and more. In lean times, they can help keep a university afloat.

Attracting donors

Collectively, colleges and universities receive a staggering annual sum from alumni and other donors. Colleges and universities raised a record $40.30 billion in 2015, according to the Council for Aid to Education (CAE). That number includes donations from individuals, as well as foundations, corporations and other organizations. CAE has conducted the Voluntary Support of Education (VSE) survey every year since 1957. To put that number in perspective, the U.S. Department of Education was funded at $68 billion in 2015-16.

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"Institutions today rely on private support," says Robert Henry, vice president of education at the Council for Advancement and Support of Education (CASE). "With the cuts that public institutions are getting from the states, and at our private institutions, considering what it costs to really give a student an amazing or an exceptional college experience, those costs can't be solely covered by tuition."

A substantial percentage of total funds raised each year typically go to a tiny subsection of colleges and universities. In 2015, less than 1 percent of the nation's colleges raised 28.7 percent of all gifts, according to the VSE survey. Stanford University alone pulled in $1.63 billion and Harvard University was not far behind in second place with a haul of $1.05 billion.

Smaller schools and those without the resources to build up their development team miss out on the large gifts that prestigious research universities receive. It is a paradox: the schools that already have vast endowments seem to only get richer, while other schools suffer year after year for the lack of a robust endowment.

Part of the reason that wealthy colleges have no trouble fundraising is that they offer high-net-worth donors the reassurance that they will be able to carry out their goals, and they already have the infrastructure in place to manage large gifts, says Dr. Una Osili, a professor of economics and director of research at the Lilly Family School of Philanthropy at Indiana University-Purdue University Indianapolis.

"It might be a little misleading just to assume that universities are getting those gifts simply because they're already wealthy," Osili says. "It's because they have the infrastructure to cultivate those donors, to engage those donors and then to deliver on that mission."

Giving to a university is also an attractive proposition for some donors because institutions of higher education have the power to impact broad segments of society, Osili adds. Gifts do not always go directly into the general operating budget of a given institution. Instead, donors can choose to stipulate that they be dedicated toward a specific goal, such as medical research, a new building or renovation to an existing one, or to the arts or an endowed chair.

"Higher education has a unique value proposition in that it affords for a given donor, whether that donor is an alum or not, a chance to have an impact in a particular field, whether that's health care, the arts, the environment, education," Osili says. "Regardless of the change that donor desires, colleges and universities are often at the forefront of innovation in many respects, in the research side and also the partnerships that they're building."

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Verna and Peter Dauterive were a classic example of a couple who strove to improve their community by giving to their alma mater. The Dauterives both attended the University of Southern California (USC) in the 1940s. By 1949 they were married and, throughout the course of their lives together, were highly active within the greater Los Angeles community. Peter was a savings and loans executive and Verna was a teacher and principal in the Los Angeles public school system.

Thomas C. Sayles, senior vice president for university relations at USC, says he met the Dauterives some 25 years ago through their mutual involvement with various civic organizations in the city.

"Verna really loved the university," Sayles says. "One of the things that she was particularly proud of was some of the local college outreach programs here at USC that enable local students in our neighborhood to come to USC," he adds.

In 2008, a few years after Peter passed away, Verna became a USC trustee, and donated $30 million to the university, including to build Dauterive Hall. USC broke ground on the now completed Dr. Verna and Peter Dauterive Hall, which houses researchers in health, economics, human behavior and policy, in 2012. Verna passed away earlier this month.

The gift of $30 million made Verna one of the most generous Black philanthropists to ever give to a university. Her gift was matched and surpassed by a joint $70 million gift to USC from music executive Jimmy Iovine and Dr. Dre in 2013.

Future of philanthropy

There is no question that minority groups have a long and rich history of giving. A 2012 study from the Kellogg Foundation found that Black, Hispanics, and other minorities often give more of their income proportionally than Whites.

Nevertheless, the term "high net-worth donor" is more apt to conjure up the images of men such as Bill Gates or Warren Buffet. The fields of development and philanthropy are also predominantly White, as the most recent annual report on diversity and inclusion from the Association of Fundraising Professionals (AFP) demonstrates.

Yet the demographics of the country are changing, and the tactics that development officers use to foster relationships with alumni and prospective donors must change to meet the times. The United States is inexorably moving toward becoming a "majority-minority" nation, a reality that is reflected on college campuses. In addition, whereas decades ago the average college-goer was White and male, today women make up at least half of all college students.

"The demographics are changing even more rapidly in a place like Texas or California, where Hispanics will easily in the next decade or so be the majority population," says Gregory Perrin, associate vice president and executive director for development at The University of Texas at Austin. "We're already seeing schools [that] were predominantly White institutions in Texas, that are now predominantly HSIs [Hispanic-serving institutions]."

In developing relationships with young alumni, "It's not about money, it's about engagement," Perrin says. If the university cannot make the case that the student should give in the first few years after college, it becomes much more difficult to convince them further down the line once they have a family, she adds.

Osili voiced a similar sentiment. "We talk about this in philanthropy often, about how you have to start the job of cultivating diverse donors even when they're at the institution," she tells Diverse.

Giving to an institution also helps set the tone in terms of leadership and offers alumni a stronger voice. When an individual makes a large gift to a university or college, the institution takes notice, Perrin says. It is a relatively surefire way to win influence at the institution. The same holds true for smaller gifts given consistently over the space of years or decades.

However they choose to give, it is critical for individuals from diverse backgrounds to be engaged as alumni and to have a presence on campus. "When our students see minorities, first-generation folks and LGBT folks in these leadership and influential roles, it impacts them," Perrin says. "We can't lose that."

By Catherine Morris

--Catherine Morris can be reached at cmorris@diverseeducation.com.
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Author:Morris, Catherine
Publication:Diverse Issues in Higher Education
Geographic Code:1USA
Date:Jun 30, 2016
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