Dive Brief:
- The Massachusetts Institute of Technology received a $140 million pledge from an anonymous alumnus, and the school will be allowed to use the funding in any way it sees fit, according to the Wall Street Journal.
- MIT has received unrestricted funding previously, using it to support online learning, Alzheimer’s research, and scholarships. The school is currently in the second year of a $5 billion public fundraising campaign, with $3.4 billion collected thus far; 20% of the funds raised have been unrestricted.
- In a statement, the anonymous donor said he had been a beneficiary of financial aid from MIT, and remarked that he was “blessed to be able to give back to the Institute so other students can experience what I did, and so that the Institute can continue to excel in groundbreaking achievements.”
Dive Insight:
Philanthropists for higher education are increasingly calling for input into how their money will be spent, with individuals increasingly pledging to offer support in exchange for some say over the curriculum. Many tech companies are offering funding for colleges and universities have displayed interest in being education providers or players in their own right, as opposed to merely being funders of educational institutions. Some higher ed officials believe that in ten years they will be competing with companies like Amazon.
Considering the current state of college funding, any financial gift is likely welcome by administrators, but presidents should work with their chief development officers to cultivate relationships which will lead to funding not earmarked for any specific purpose. It can help if a president or the point of contact for alumni is someone who has a history with the university (such as a department chair) to help build the bridges with prominent and successful alumni that will become all the more important as government funding continues to dwindle.
The loss of funding from state and federal government, as well as declining tuition revenue, combine to paint a dire financial portrait of the state of higher education, but presidents seeking unrestricted funding may be able to utilize this information to convince donors that a “no strings attached” gift would be of more use to universities than a detailed, targeted donation. As revenues decrease, institutions will have to be more adept and adaptable with funding, and presidents can use budget cuts as an illustration of the ways in which unencumbered funding would help those institutions to plug the gaps as they arise.