Navigating the new age of higher ed philanthropy
Amidst a period of significant financial strain, universities are increasingly looking to their alumni and donor bases for support. However, accepting and managing donations in higher education is becoming increasingly complex.
While philanthropy is crucial, there's extensive behind-the-scenes work involved in legitimizing and managing gifts, says Kimberly Macedo, a director at Baker Tilly specializing in higher education.
"Many institutions have evolved significantly in how they approach donations," Macedo says. "In the past, schools were often eager to accept any gift, even if it came with restrictions that might be difficult to use. Today, we see a much more strategic and thoughtful approach."
Several important things to consider before accepting a gift may include:
- Vetting donor viability: Assess whether a hopeful donor can fulfill a financial pledge. This can help the institution avoid reputational damage. Florida A&M University found itself in a scandal last year after it discovered a recent donation—touted as the largest single gift to an HBCU—was fraudulent.
- Proactive solicitation: Prioritize upfront conversations with donors to ensure their potential gifts align with strategic priorities.
- Evolving compliance: New regulations protect the sensitive financial information of online donors. Gift-giving through cryptocurrency is also becoming more common.
Institutions must always vet the intent of a donation and the reputation of the donor to ensure both align with an institution's values. This also extends to reevaluating legacy gifts, which requires institutions to reassess previous donations.
"Many schools have already been going back and looking at legacy gift agreements to figure out the next best use for them that would still be appropriate based on a school's mission and values today," Macedo says.
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