Be selective and define your goals when giving to colleges

Earlier this month, we began to excerpt chapters from our new book, The Intelligent Donor's Guide to College Giving. Here's the next section. We're eager for your feedback--be sure to submit comments!

THERE is a master key to intelligent giving: Be selective. You do not buy every stock listed on the New York Stock Exchange. You pick and choose in light of risk and earning potential, or you find a smart fund manager who will do the work for you. You should be as wise in your higher education giving as you are in selecting a stock or mutual fund. Identify the best programs or activities and direct your funds to those. If no program exists in which you want to invest, other options exist--such as developing an entirely new program. We describe these options below.

Most donors give the easy way. They contribute to the annual fund or a capital campaign. In so doing, they are supporting the bad along with the good. Other donors have the "no harm" strategy. To avoid subsidizing programs that contradict their own educational values, they target their funds to projects, such as buildings, that they think can do no harm. But money is fungible. "No harm" gifts actually free up funds for the very programs donors do not want to support.

Intelligent giving requires more care. You have to find out what programs are truly excellent. You may need to draft instructions for your gift. You should take fungibility and other obstacles into account. You may need to monitor the program you are supporting before deciding whether to renew your gift.

Wise giving requires as much care as any other purchase or investment. The most important step is the decision to be selective. After that, it is just a matter of following a few logical steps.

There is an ancient Chinese saying: "If you know where you are going, you are more likely to get there." The first step to intelligent giving, then, is to define your goals: What do you care about most in higher education? What would you like to achieve? It’s your money, and you have a right to invest in programs that reflect your interests and values.

Defining your goals may sound like a daunting task, but don’t worry--there is no right or wrong way to do it. If you care about something very specific, such as the American founding or economic literacy, and you already know you want to support certain kinds of activities, such as visiting lecturers, you can go straight to the next step.

Perhaps your goals are more general. Perhaps you care about students and about the quality of teaching, and you worry that students graduate without knowing the essentials. These priorities are somewhat vague, but they are sufficient for a beginning. As you move through the next few steps, you will find a range of options and a variety of resources to help you. Your goals will become clearer along the way.

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