US: Strings-attached gifts can limit universities

When Stanley J Seeger gave Princeton $2 million for Hellenic studies nearly three decades ago, the gift’s income paid for two courses in modern Greek and trips to Greece for five, writes Karen W Arenson in the New York Times. But the Seeger money, which must be spent only on matters Greek, is now worth $33 million, multiplying through aggressive investing like the rest of Princeton’s endowment. So the university offers Greek, Greek and more Greek. “Institutions do get shaped by the interests of donors,” said Robert K Durkee, vice-president and secretary of Princeton.

As the nation’s wealthiest colleges and universities report on their finances to Congress, seeking to head off federal requirements that they spend at least 5% of their ever-growing endowment income, new attention is being paid to how endowments are structured, and on the restrictions imposed by donors.

Aides to the Senate Finance Committee, which sent out a query in January about endowment practices to the 136 wealthiest colleges and universities, say they have received 131 responses and have begun to scrutinise them. The responses, some of which universities have made public, show that at some, including Harvard and the University of Texas, 80% or more of the endowment is constrained by donors’ wishes.
Full report on the New York Times site