Why Do Alumni Donate to Their Alma Mater?

If you go to college in the US, after graduation you’ll start receiving requests to give money to your university. Given that universities in the US are businesses (usually run very efficiently), I always wondered what would motivate alumni to donate. There are many worthwhile causes in the world (e.g. hunger, malaria, preventable diseases). Why choose a school that may use your money to build a world-class swimming pool or running track?

Maybe it’s the way things have always been done in the US. I have a different perspective because I got my first degree at the University of Buenos Aires, in Argentina. The UBA is taxpayer-funded and free (as in beer, students don’t pay a dime). The quality of the education we received was excellent. I don’t remember ever receiving a request for a donation after I graduated; I suspect the university is not even set up to receive donations. Of course I always felt a sense of indebtedness to my fellow taxpayers, which was one of the reasons I chose to start a company in Argentina. Mind you, I’m not a bleeding-heart altruist. I probably wouldn’t have done it if it hadn’t been a great opportunity. However, I did feel that creating local jobs and spreading some lessons learned in Silicon Valley provided a sort of return on the taxpayer money spent on me.

With Carnegie Mellon, it’s a different story. When I first got there in 1997, I was taken aback by what I perceived as a display of wealth on campus.  The facilities were world-class, all buildings looked beautiful to me (and it is no Stanford!). The manicured lawn was a stark contrast with the graffiti-filled walls of UBA buildings. The fact that I had to pay hundreds of dollars for textbooks added to my surprise. In Argentina professors typically do not have their own textbooks. They suggest a few titles, and it’s up to students to figure out if they want to buy them, borrow them or learn the material in other ways.

I graduated from CMU many years ago. Since then I’ve been receiving emails asking for donations, and I’ve even given money once or twice. Because I recently had a “startup exit” a fellow alumnus asked me to join him in a slightly larger donation. This got me thinking, why? Carnegie Mellon has 2.3 billion dollars in assets. Furthermore, their assets increased by 278M in 2011. They certainly don’t need my money. Don’t get me wrong, I’m extremely proud of having attended graduate school there. Going to CMU for my Masters in Software Engineering was one of the single best decisions I’ve ever made. I have no doubt that I wouldn’t be where I am if I haven’t done it. But unlike other classmates I wasn’t corporate-sponsored. Getting the degree was very expensive, especially for a foreign student. During that time my net worth went from positive to negative. All the money I saved during my first year working in the US went to pay back school-related debt.

Having said all this, the title is an honest question. I have no motivation to donate money to CMU. Why do others donate to their universities? To clarify even further, I’m talking about disinterested donations: if you expect a political favor, or to have your child admitted, that’s not really a donation in my view.

So no, I’m not donating money to universities in the US. Here’s what I believe is a worthy cause:

3 thoughts on “Why Do Alumni Donate to Their Alma Mater?

  1. While donating is one way to be involved with your alma mater, there are other ways to be involved. These are equally important to us at Carnegie Mellon University- mentor a student- sponsor a practicum project- talk about your experience as an alumnus via a guest lecture- hire CMU graduates- recommend your friends to do a masters degree- invite CMU to do an information session about our programs- come to CMU and do an info session about your company- stay in touchAbout 10 years ago, I attended a fundraiser and I wondered about the difference between master students and PhD students with respect to giving. Most master degree students are self funded and pay for the entire degree themselves, where as for PhD students, a professor provides funding for five to eight years, pays for their education and their cost of living stipend. A gift officer said it is normal for master students to give differently than PhD students. BTW, if you compare CMU with the other top-tier research institutions, we have the smallest endowment. (I’d have to look up the data, but it was pretty dramatic.) We’re used to being the underdog and having to do more with less. Ironically, when the stock market crashed in 2008, it affected us the least because we have such a small endowment.

  2. “if you compare CMU with the other top-tier research institutions”This must be the most over used phrase in higher education. Everything is compared to other instituitions. It is like children arguing who’s daddy can beat who. I am faced with a bill that equates to 28% of my gross income to send my daughter to a state school, but I am supposed to accept it because they are moderately priced when compared to other top-tier research institutions. If the research is top-tier, why do my tution dollars have to fund it? Her school spends far more than they receive in research money. I will be sure to tell every university employee I meet not to ask for a dime in donations. Loyalty is earned through mutual respect.

  3. The man is 100% correct. He paid for the services and now owes nothing. If he buys a suit at Brooks Brothers do they continue to bill him for it 20 years later?

    I went to Dartmouth undergrad, then Yale Medical School, then Cornell’s New York Hospital for post graduate training in General surgery. Dartmouth and Yale continue to bombard me for donations. Cornell does not because by paying me $4,500 (plus good living quarters in upper east side Manhattan, free uniforms,food and laundry) for 144 hour per week Cornell figures they already got a whole lot of donations out of me up front. But here is where the rubber meets the road: when I was an undergrad Dartmouth obtained the vast majority of its income from a) endowment dividends and b) alumni contributions. Yale had already figured out how to hustle the federal government for healthcare big bucks by then, but still continued to dun its alumni. Now, however, Dartmouth’s student population has only grown 30 % since I was there but the deans have multiplied by 600% from 3 to 18. Why is that? Dartmouth, like Yale, is hustling the federal government for big bucks, for healthcare, but also for “gender studies, black history studies, Chicano studies, gay rights studies, native American studies,” and who knows what’s next? Left handed albino studies?

    The reason given for alumni contributions when I was a student were, “This pays for scholarships for needy students.” That is no longer even close to true. My schools receive vast amounts of federal funding for “low income students,” which I have to pay for in my greatly increased taxes.

    So when those alumni call me on my personal Iphone or send me their letters to my home, I answer with, “No thanks, I already gave at the (federal) office.”

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