Ranting to /dev/null

This is a good point, Ryan.

I'm not willing to take the step of a boycott, though I initially was all for it. I mean, I actually haven't given to the college at all yet, in any case.

Restricted giving does make the paperwork more difficult though, doesn't it?

I know that the organization I work for has more difficulty with some grants because of the restrictions which the grantee has placed upon them. I guess that's the paradigm I was operating from.

Does it make it more difficult? I wouldn't think so.

What organization do you work for?

Restricting one's giving to faculty might be the wrong way to go, but restricting it to scholarships, or by giving it to an outside organizationa that provides scholarships at Covenant might work.

You could also work with your PCA church to set up the matching program where if a church receives X dollars in giving toward students from that church who go to Covenant, then Covenant has to match X.

That way, the money is in the church's hands for scholarships only, and Covenant can only use it that way. I don't think reallocation would be possible, as the money is only to be used for a specific student and can't be given to another, unless they are from that same church.

It's a way around directly giving, and annoying, but if any high schoolers in your church are planning to go to Covenant, then you have helped them directly.

@Ryan: It may not make it more difficult for the college, but it does for us (TechMission), from what I've heard. Government grants have restrictions on faith, etc. and tracking requirements to make sure that you are reporting use on only things that aren't faith-related. Other grants have restrictions that they can't be used for physical plant expenses, or petty cash.

@John: Ah - scholarships, and the matching program. My church back in PA already has that.

Setting up a separate fund to provide scholarships is a brilliant idea, though someone more skilled at administration than I would have to set that up. Who knows? It could actively work to promote diversity at the college, by mainly funding low-income students, and other students who don't appear within the Wallace Anderson target demographic. I'm excited.

Btw, John, have you signed the letter yet (password: freedom)?

Earmarking money for scholarships doesn't work either. Say someone gives a $10,000 gift to the college, saying it has to be spent on scholarships. Fine. The college simply gives all 1000 students $10, and raises tuition by $10. Net change: zero. But now the college has ten grand to spend on a building. This happens every day, and is quite common at larger institutions where many donors earmark funds for students.

Even a parallel non-profit won't work. Say you create a non-profit to benefit low-income students at Covenant. What happens is that the students get the money and then give it to the college. You might have been able to encourage a few students to go there who wouldn't have otherwise, but your effect on administration policy is exactly zero.

The only real way of controlling where your money goes is to spend it yourself. As soon as you give it to someone else, you are entirely incapable of directing its use.

Listen: this is exactly the same problem that Congress has right now. They want the President to do certain things but not others, but they aren't willing to completely defund programs, they simply try and attach strings. This doesn't work and never has, which is why Congress has been utterly ineffective at controlling Bush for the past seven years. If you want to affect an institution's behavior through the spending power, you have to not give it any money at all.

You are right Ryan, that angle hadn't occurred to me. But I still don't want to hurt the current and future students because I disagree with the current administration, whose work might be undone by a later one.

Evan: Covenant's budget is in the high seven figures, if not eight by now. The only situation in which earmarking funds becomes effective is if more funds are earmarked for a particular purpose than the organization was going to spend on them anyways, or if a high percentage of total funds are earmarked in ways that the receiving group doesn't like. The reason restricted giving is inconvenient for your employer is because TechMission only employs 18 people (according to their website) and can't have an annual budget much in excess of a few hundred thousand dollars, if that. Covenant's larger budget--and funds from its endowment--give it a much larger degree of flexibility in shuffling around funds to neutralize the effect of earmarks.

Let me make this clear: this isn't sneaky, underhanded, or devious. Everyone does this, and no one thinks twice about it. The college, like every other organization, has institutional goals and spends its funds to achieve those goals. This does not reflect poorly on the administration of Covenant at all. It's just the realities of accounting.

Understandable. I liked the idea of a scholarship fund more in terms of what it could do for the student body than what it could do to force institutional change.

Isn't the college hurt by not having a larger endowment, though? I got that impression while I was there and so I suppose I thought that restricted giving might have more impact.

Yeah, the Covenant endowment is nothing to speak of compared to other colleges nationwide, but it still amounts to tens of millions of dollars, unless I'm mistaken. For some reason I seem to remember it being in the $30-40 million range. By way of comparison, ND's endowment is approximately $3.5 billion. But even Covenant's endowment would provide a solid couple of hundred thousand dollars per year, meaning that you'd have to earmark more than that to change a single dollar in spending.

Tens of millions? That's an order of magnitude bigger than I thought it was. Ah well, live and learn...

Your memory of the endowment ($30-40mil range) matches mine, but your estimate of its "yield" ("a solid couple of hundred thousand dollars per year") is off by an order of magnitude.

As I recall Bob Harbert explaining it to me (see a recurring theme here? Bob is/was SUCH a valuable resource to the college!), you can generally expect to pull out about 5% of your endowment per year based on the premise that a well-run fund (and Covenant's has been, historically) will average ~10% return per year, leaving enough for the bad years and allowing the principle to grow with inflation.

So even the low $30mil yields ~$1.5mil per year of revenue.

Oh, and the reference to the college budget being "7 figures by now" ... it was ~$23million/year last I was involved, and it had been in the 7 figure range probably for as long as I was there (I started in '92). Just an FYI.

Oh yeah, you guys DO know about guidestar.org, right? Get a free account and pull up all the IRS Form 990s you want... you can SEE the budget, where the money goes, how much ALL the officers make, who the top 5 people are for pay that aren't officers, etc. FASCINATING reading!! I learned about this back in ... I think it was '95 or so, due to a great article in World Magazine encouraging people to use the tax laws to be "informed givers" ... 501c3 organizations (that includes a LOT of orgs) have to file these forms. Read 'em and (hopefully don't) weep! :-)
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RDS

Yeah, I figured it'd make a good return, but as I've no data on how much of its endowment income is spent on the annual budget, how much goes to capital improvements, and how much is reinvested, I guessed on the low side. But perhaps Guidestar will provide that...