The president of the University of Central Florida was effusive last week in accepting an unrestricted $40 million windfall from MacKenzie Scott, the billionaire philanthropist and former wife of Amazon’s Jeff Bezos.
“Every new dollar allows us to make new discoveries on distant planets and to solve problems here on earth,” said Alexander Cartwright.
This kind of lofty and vague language illustrates the pitfalls of making unrestricted gifts to colleges and universities. Higher education can be a black hole for philanthropy, and there’s a risk that Scott’s gifts to a number of colleges could be sucked in.
While the University of Central Florida has a track record of improving outcomes for kids in lower-income brackets and first-generation college students, the plans for the money seem ambiguous. The funds will be used for “new programs that foster student success, providing faculty funds to conduct groundbreaking scholarship and research, and amplifying the impact of established and future partnerships.” Which could mean just about anything.
For years, a number of well-off conservatives have been most aware of these risks because they found that their gifts were actually going for the opposite of the purposes intended. Lee Bass famously gave Yale $20 million for a Western Civilization curriculum in the early 1990s, and the school’s president wanted to spend it instead on more multicultural classes. The school eventually gave the money back, but in plenty of cases, the money is simply diverted.
In 2002, a donor gave $5 million to the University of Missouri to endow professorships in Austrian economics. The school used the gift instead to pay professors in management and marketing.
Scott is in sync with the schools she is giving to and, from the sound of her missive explaining the donations, the progressive direction of higher education more generally.
But there are plenty of apolitical ways to waste money. Giving a large university $40 million is like giving a small city $40 million. Administrators could spend it on libraries, security, more administrators, new buildings, a more up-to-date fitness center, better lighting, scholarships for poor kids, or healthier cafeteria food. Does Scott really not care which?
Scott says that she decided to make all of her 31 higher education gifts, totaling hundreds of millions of dollars, unrestricted “because we believe that teams with experience on the front lines of challenges will know best how to put the money to good use.” She says, “we encouraged them to spend it however they choose [and] … many reported that this trust significantly increased the impact of the gift. …. It empowers receivers by making them feel valued and by unlocking their best solutions.”
Maybe, but who’s to say the people in charge today will be in charge next year? Maybe you won’t like that team as much. In both public and private universities, there are so many variables that could result in a change in the way such a gift would be used.
A governor could appoint new trustees. A president could retire. The faculty could decide on a different direction for research.
It is clear that Scott’s decisions were not made lightly. And the fact that she gave to so many non-elite schools suggests that she thought a lot more about this than most donors—even most big donors, who give to their alma maters because they love the fraternity and the football team seems to be doing well.
But to suggest that directing a gift—at least in a general way—is somehow a sign that you don’t value the people running these schools is discouraging.
You can draw up agreements regarding the direction you’d like the money to go and put in place some metrics for success without micromanaging every aspect of the gift. Judging by her gifts to California State Polytechnic University at Pomona and to Renton Technical College in Washington, Scott seems interested in encouraging social mobility and the use of STEM programs in order to help underprivileged young people get a foothold in our economy.
Both goals lend themselves to real measurements. Schools could be rewarded for increasing graduation rates among STEM majors, or frankly increasing measures that are less easily gamed.
How many graduates are able to receive certification in their chosen fields? Could they pass a CPA exam or become a licensed nurse practitioner? Those are the kinds of fields that not only earn students a solid middle-class salary for years to come; the graduates are also not dependent on the subjective standards of professors or even the reputation of the school.
Schools that want to get these outcomes for kids will have to engage in some real micromanaging themselves. David Kirp’s recent book “The College Dropout Scandal” chronicles some of these efforts and includes the University of Central Florida among its success stories.
Some schools like Georgia State are using predictive analytics to see which students are in danger of failing a course long before the grade is sent in. Others are mandating much longer hours in the classroom—offering something akin to a second chance at high school.
Schools like Purdue are trying to ensure that students use their summers wisely, either for taking extra courses to graduate faster or for productive internships that will lead to real jobs after graduation.
Scott could give schools half the money up front and make some of it contingent on their success. Or she could ensure that a particular point person at the school is in charge of the effort and if that person is going to leave she have some say over what the replacement does with the money.
Doing so would demonstrate that she is a good steward of her wealth and that her commitment to helping the greatest number of young people get a leg up is more than just a mission statement.