Donations Open the Door to Top Colleges

Physician's Money Digest, June15 2003, Volume 10, Issue 11

Wall Street

Journal

Physician-parents are oftendisheartened by the stiffcompetition they encounterwhen trying to get their child into atop college. Hoping to gain anadvantage, some parents makedonations to a selective school.Duke University says it has accepted100 to 125 students annuallydue to family wealth or connections,compared to 20 a decade ago.According to a recent report, many other selectiveuniversities (private and public)also favor children of past andprospective donors.

DONORS VS LEGACIES

While a large donation does notnecessarily guarantee admission, itdoes put applicants on the prioritylist of the college's fund-raising ordevelopment office. At many universities,the names of these "developmentapplicants"are brought to theattention of the admissions office.Usually, the admissions office hasalready reviewed the applicants priorto this point without regard to wealthand, in some cases, may have tentativelyrejected them.

Development applicants are subsequentlyjudged by admissions ona lesser academic standard. In addition,the alumni office may alsoapprove an applicant whose parent(s) graduated from the university.However, admissions may stillturn down these students—a decisionthat is often final. Even whenturned down, development applicantsare often treated kindly bycollege officials and encouraged toreapply after a year at another collegeor prep school.

Besides development applicants(ie, children of prospective donors),alumni children—known as legacies—also have an edge over thecompetition for entry into selectiveuniversities. Because major donorstend to be alumni, the 2 categoriesoften overlap. Depending on theschool, the development and alumnioffices may either provide separatelists of priority applicants to admissions,or they may combine the listsof development applicants and legacies.The degree of an applicant'slegacy status depends on the family'spresent prosperity and past donations,as well as service to the college.

GAINING AN EDGE

It also helps if you are a generousdonor to your child's secondaryschool. Boston educational consultantMichael Spence says a 5-figuredonation could make that school'sdevelopment officer willing to alert auniversity to the family's philanthropictrack record. Joining the prepschool's board is also effective, as isbeing employed by or sitting on theboard of a corporation or foundationthat the university hopes will donate.

One

reason:

US News & World Report

Educational consultants say a 5-figure donation is usually enough todraw the attention of a liberal artscollege with an endowment in thehundreds of millions. Starting earlyis key, they say. Donating just $2500to $5000 annually, even before yourchild is old enough to apply, canmake a difference. Developmentoffices favor consistent givers. The rankings use the percentage ofalumni who donate as an indicatorof student satisfaction.

To gain an edge at an exclusivecollege, however, you will need tomake a significantly larger donation.It can take at least $50,000 withsome assurance that future donationswill be even greater, say educationalconsultants. At top-25 universities, aminimum of $100,000 is required.For the top 10, at least $250,000 andoften 7 figures might be needed to tipthe scales in your child's favor. If thatis more than you bargained for, youcan compensate by pledging stock ora portion of your estate through variousdeferred-giving arrangements.

Universities differ in their receptivityto students seeking to buytheir way into college. Some educatorsconsider it unfair that affluentchildren might edge out a moreneedy and academically superiorapplicant. However, attitudes canshift as new presidents or trusteesset a different tone.

In today's challenging economy,few colleges shun generous donations.College administrators atDuke and other universities assertthat tuition alone doesn't cover thecost of education, while donationsunderwrite scholarships, facultysalaries, and other expenses. Theyalso maintain that they admit onlystudents who can flourish. In fact,Duke plans to limit these types ofadmissions to 65 students this year,and fewer next year.

Journal

If you decide to donate to a topuniversity, notes the , youshould work through an intermediary.This person, perhaps a friend onthe college's board, can convey yourinterest in contributing to the developmentoffice. However, think carefullybefore making your decision.Your offer of a donation today willlikely invite a lifetime of solicitations.And, in many instances, students arehappier and more successful at second-tier colleges.