Why Education?

EducationWhen SLC opened its doors in 1928, founder William Lawrence provided the College with no endowment. He believed strongly that the school should be self-supporting, relying on tuition alone to provide a balanced budget. It didn't work for SLC. And it doesn't work just about anywhere on the private (and, increasingly, public) higher educational map.

Why can’t institutions like Sarah Lawrence College craft a budget entirely out of tuition revenue? Why do presidents of every school from Abilene Christian to York University need to ask individuals and organizations to help keep their colleges afloat?

We asked Mary Patterson McPherson, vice president of the Andrew W. Mellon Foundation, to tell us a bit about educational funding. She’s in a perfect place to respond, since, prior to joining the Mellon Foundation, she was president of Bryn Mawr College from 1978 to 1997.

SLC Why isn’t tuition alone enough to sustain the activities of a college?

Mary Patterson McPherson Colleges have three main sources of income: tuition and fees, which cover, in most instances, no more than 60 percent of the cost of educating a student; endowment income—if they are fortunate enough to have a significant endowment, and only a few hundred institutions have an endowment of any consequence; and gifts. Gifts become critical to balancing each year’s budget—unrestricted gifts being used to cover annual operating short falls—and gifts to build the endowment, or significant gifts for buildings or programs, are essential to moving an institution forward.

SLC Do significant gifts offer a wealthy donor a chance for influence within an institution?

MPM Sometimes a donor’s wishes are not aligned with the institution’s mission, or might get a college launched in a new direction, or set up a new program that will not be financially sustainable in the long run. Such gifts, when proffered, should be turned down, but only after a good effort has been made to engage the donor’s interest in some aspect of the college’s program that really needs funds and could bring the donor some real satisfaction. Donors who understand how academic institutions must work steer very clear of “attaching strings”—such as having the donor reserve the right to influence appointments to a chair or academic program. But working with a donor to craft a gift that will both work for the institution and is deeply important to the donor is very suitable.

SLC Do foundations play a big role in shaping education?

MPM In my view, foundations should be concerned with strengthening good institutions, which are well led, and not with attempting to move institutions in ways that are inconsistent with mission or will be unsustainable. Listening hard to experienced presidents, provosts and faculty leaders enables foundations to address real issues and anticipate problems for the colleges that are in the offing.

SLC You have been both a college president and a foundation officer. What are the differences between developing proposals to a foundation, and responding to those proposals?

MPM I have greatly enjoyed being on each side of the proverbial desk—but there are decided differences. There is great satisfaction in working on a proposal to a major foundation that then gets approved and enables you to move an important college project ahead, and there is also great satisfaction to be had in helping good institutions do what they need and want to do.

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