When frugal University of New Hampshire librarian Robert Morin died in 2015, he surprised the campus by leaving $4 million to the institution.
But for many, how the university spent the money would prove even more surprising. Just $100,000 went to fund the library, while $1 million was used to pay for a new scoreboard for the football stadium. The university’s decision led to a wave of criticism.
Like many donors, Morin provided few instructions on how the money should be spent. Of course, concerns about the preservation of “donor intent” aren’t unique to the University of New Hampshire. It warrants careful consideration anytime a donor is making a gift to an institution.
Here are five considerations to keep in mind when considering a gift that can help to ensure that college leaders honor your intentions.
Don’t Take The First ‘Term Sheet’
University leaders often have a wish list of projects to fund and resort to offering donors a pre-set, limited menu of choices such as scholarships, an endowed faculty chair or a named lecture hall. The fact is that while many of these gifts seem “targeted,” they may simply fund ongoing university operations.
We’re often surprised that otherwise savvy executives and entrepreneurs simply accept a template “term sheet” for “investments” in their university’s future. Donors don’t have to accept the first agreement the university presents and they shouldn’t rush to sign an agreement. Donors should take their time to communicate and express their intent clearly in the agreement. At the same time, negotiating a gift agreement should not be an adversarial process that is simply about forcing a school to concede to the donor’s terms and conditions.
Strongly consider seeking your own counsel to review or, better yet, draft the agreement. Rather than relying on your go-to counsel for business agreements, ask for a referral to an attorney or wealth advisor with expertise in crafting gift agreements. Such attorneys or advisors often specialize in working with philanthropic and charitable organizations and are able to help donors understand their options and what terms and conditions may or may not be reasonable or common in gift agreements.
Maximize Your Impact
Particularly if you graduated from a well-heeled top-tier college, you may find that the highest return on your investment will be at a school other than your alma mater.