As universities feel the pinch of the recession, many of them are looking for sources of money to cover operational expenses. One important source is endowments. Universities love unrestricted gifts, because the money is theirs to use as needed to pay faculty salaries, financial aid, and other expenses. The reality is that most significant endowments are for a restricted purpose. For example, maybe the donor hopes that the money will be used to bring prominent speakers to the university. It might be that the donor enjoyed his experience at the college’s radio station and wanted to see it continue. Perhaps the donor gave expensive works of art for the university to display for future generations. By the way, these are real-life examples. See New Unrest on Campus as Donors Rebel, Wall Street Journal.
The donor’s intent is almost always expressed in writing, so what if the university needs it for another purpose? Should a university be able to use a restricted gift for an unrestricted purpose, or worse, should a university be able to sell the works of art or the radio station? If the university is in dire financial straits, it may have no choice; however, it should try to honor its benefactor’s intent. Donor unrest is never a good thing. You know the saying, “you should not bite the hand that feeds you”.
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