Although I think that the importance and drivers of alumni engagement and giving are interesting topics, I think that this article is way off.
1 Like
MIT has been doing very well for a long time without legacy admissions. The same is true of Caltech.
2 Likes
This article is written by a college admissions consultant. I’m glad he was upfront about that.
2 Likes
In reference to Oxford:
“Despite its storied history, it has a far smaller donation culture and less engaged alumni.”
And yet, it’s regarded as #1 in the world. This writer is pretty good at sabotaging his main argument.
9 Likes
I don’t know about crucial to dominance but endowments and alumni engagement is likely to decline. There was quite a bit of handwringing about the end of legacy admissions at an ivy event I recently attended and that was the overall sentiment.
*I didn’t read the article
1 Like
Frankly, I don’t like what it says about people if the only reason they donate is because they expect to get something out of it.
10 Likes
As we showed in another thread, MIT gets a relatively large portion of its operating revenues from research grants, relatively little from gifts and net tuition, as compared to less tech-centric colleges like Harvard or Princeton.
We further showed this was a predictable tech-related effect, as the more tech-related subdivisions at Harvard more closely resembled MIT, and Harvard’s non-tech subdivisions were much more dependent on gifts and net-tuition.
Long story short, I am skeptical administrators doing long-term financial planning for significantly less tech-centric colleges than MIT are going to be adopting MIT’s financial model, regardless of what else happens. There are simply not enough non-tech research grants to make that possible.
1 Like
Harvard’s endowment is $50bn and Princeton’s $36bn. I think both will do just fine even if a few alumni decide not to donate.
6 Likes
Harvard and Princeton do financial planning on the scale of generations and indeed centuries. And they draw on experience.
So, looking back, colleges like Harvard and Princeton are reportedly observing that multi-generational family relationships have correlated with increased rates of large gifts from those families. And large gifts have played a large role in getting them to the favorable positions that they currently enjoy.
And of course over the time scales they operate, gift returns are compounding to high cumulative multiples. And they manage their endowments such that new gifts invested plus income reinvested, minus new gifts and income used, still results in compounding growth in inflation-adjusted terms.
OK, so where will they be in 50 years? 100 years? 200 years? Those are the sorts of questions that they plan around. And they are not going to be persuaded by logic suggesting they would be fine for now since they can draw on a large endowment. They will want to be assured that they will be able to both continue their present operations AND also continue to stay at the top of the endowment ladder into the far future. And one of the key variables in that equation is new gifting.
Now, there are some people who have argued that maybe they are overestimating the sensitivity of new gifting to legacy policies. However, the studies those people have offered to that effect are not really testing these multi-generational theories. So, it will be interesting to see how that plays out.
But again, I am quite sure these colleges will be unpersuaded by arguments that do not address basic issues like how they use new gifts to both fund current operations and also grow their endowments for the far future. Because they know what they are doing, how they got here, and how they plan to keep it going in future centuries.
3 Likes
Do you think all their new money donations will stop if they no longer consider legacy status in admissions?
Or do you think the majority of their donors will stop gifting them?
Personally, I don’t know what would happen.
Obviously the sorts of things they say might happen are more nuanced than that. I think a fair summary is they tend to argue that on the scale of generations, the rate of new gifting will go down materially without legacy admissions. This would at least eventually force down their sustainable spending track, which in turn would ultimately reduce their ability to provide an extremely competitive, and highly subsidized, education to as many students.
That sort of argument is not as simple as saying “all” their new gifts “will stop”. And accordingly, it is harder to dismiss its plausibility. But whether that outcome is actually likely, that I don’t know.
So again the things they tend to argue are more nuanced than this. One of the things they argue, for example, is that very large gifts ultimately play an outsized role in their long-term financial plans. It is again not necessary for their arguments that a “majority” of donors “stop” giving. It might be sufficient, for example, if “some” very large donors “gave less”.
Now part of that comes up in the context of donors lists, which is actually a separate form of preferential admissions. But such donors lists are inherently backward looking. What they are arguing in the legacy context is basically that multi-generational family relationships are forward looking. Such that even if, say, none of generation A or B were such large donors, if they hit it big with one of generation C, then it could all have been worth it financially.
Again, these are sufficiently complex arguments that it is hard to simply waive them away as implausible. But whether it is actually likely, I don’t know personally.
1 Like
Sigh. I read the whole opinion piece as it wouldn’t have been right to comment otherwise, but what a waste. It was laughably bad. It was such a transparent shilling for his company and signaling to the kind of clients he hopes to cater to. But it never made a coherent argument or provided any data to back it up. Which is egregious given the author credits legacy admissions for making the US colleges “top” in a laundry list of seemingly dubiously related things such as “diversity, funding, academic publication rates, student outcomes.” You don’t get a free pass to make those claims then never demonstrate them.
It’s only tangible example is that if Legacy Admissions is ended that the Ken Griffin’s of the world will have no reason to give hundreds-of-millions to universities. Sure they would. Massive donations like that are about the giver’s legacies, not their kids, with their names on buildings, etc. More importantly, it has nothing to do with legacy admissions. I guarantee you if someone who didn’t go to Harvard donates $500M to them with the potential for more, their kid is getting in, no legacy status required. So the example makes no sense.
There is nothing to stop private colleges from continuing to trade admission for massive donations, with or without legacy. Meanwhile, most alumni don’t donate nearly enough to their former colleges to buy admission.
If I was in the market for a college consultant and read this article, I would be crossing that company off the list. Our kids can right better than that.
6 Likes
Harvard’s endowment covers roughly a third of yearly operating expenses. The rest comes from tuition (21%), current gifts (9%), research (17%) and other (17%). Even with this, last year Harvard ended the year with an operating surplus of $400M.
So what @niceunparticularman wrote makes a lot of sense. It took Harvard 300+ years to accumulate an endowment of $50+ Billion. They are simply not going to discard legacy, at least not in the near future. Once the endowment covers more than half of operating expenses then it might make more sense. At least then they wouldn’t need to worry about tuition dollars.
Harvard’s dominance in the rankings is mainly due to its fat wallet. I don’t see them doing anything to sacrifice that in the near term. Even if all of their current donors stopped giving money, it would amount to a relatively small amount (~9% of operating expenses). But in the longer term it would make them less competitive to keep up with everyone else.
3 Likes
Implicit in your post is that you believe ending legacy would have a major impact on giving.
1 Like
To be fair, he does have somewhat of a point there.
It’s much, much harder to get Oxford alumni to donate money from a friend who works in Oxford’s development office.
Part of that is probably that the funding model is completely different so alumni don’t feel like there were others who ‘paid’ their way as opposed to government paying their way.
In any case, most donations at elite US universities come from a handful of donors every year.
The vast majority of donors donate a very small amount and a tiny minority donate big amounts.
So if Harvard is getting a $1 billion in donations in a year, most of that is from large donors donating >$10m.
2 Likes
There’s nothing to stop them from still admitting their kids even if they end legacy. Just like they will continue to admit kids of major politicians and CEOs, famous child actors, etc., regardless of legacy.
Both of my older kids started doing very small donations ($25/year) to their colleges immediately after graduating because they have been indoctrinated for years that alum to do that and their college friends are too. I guarantee you they are giving zero thought to doing this to increase the odds their hypothetical future kids have a better shot at getting admitted.
BTW, if most Harvard alum are giving because of legacy admissions, that’s not working out for most of them since more legacy kids are denied than admitted. Seems like a risky investment.
1 Like
What if someone offers to give a billion or so dollars to Harvard on the condition that it eliminates LD preferences in admissions? Would Harvard accept it on that condition? Would other schools that have LD preferences take that deal?
My D, who was fortunate enough to get into a top school (that has a healthy endowment) without any legacy hooks, gives to her alma mater for one simple reason: She appreciates the education she received. I give to my alma mater for the same reason - and I never had any expectation that my kids might attend (good thing, as they never entertained the idea).
2 Likes
At what age are people donating large sums to colleges? I feel that most of them have kids post the college application age.
1 Like
This is again underscoring the different forward-looking and backward-looking logic of legacy and donor admissions respectively.
If you want to get on a donor’s list, you are usually going to need to give BIG money. Most grads, even the ones doing quite well, are not doing THAT well.
But if your kid goes to your college and hits it big in life, maybe they will give BIG. And if not them, maybe one of your grandkids. And so on.
These colleges can afford to be patient, because their timescale is so long. And maybe most of the time, this won’t ever work. But if it works just a few times, then what is the cost of giving up a few slots each year to legacies with a point or two less on their ACTs compared to that BIG payoff?
Again, I don’t know if all that is actually true. I just think it is interesting that a lot of people sort of treat legacy admissions like it was backward looking, whereas as I understand it, it is more forward looking.
2 Likes