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Comment by LegitShady | Hacker News Reader

This is a little bit ridiculous. There is no connection between alumni donations and capital investments except decisions that university leadership chooses to make. The issue isn't the donations, its the university leadership thats choosing to make large capital expenditures. The donations could go to other things and do go to other things. Any blame you're putting on the donations actually belongs to the people running the university. Blaming unwise spending on donations without mentioning who is making those decisions as the root of the issue is ridiculous.

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> There is no connection between alumni donations and capital investments except decisions that university leadership chooses to make.

Not (always) true. Direct example with Carnegie Mellon - David Tepper was upset the business school (his alma mater) was appearing to fall behind in recruiting, so he donated ~100m but tied it to the business school getting a new building/quad. Total cost to the university was well north of 200mil; and their hands were functionally tied in how it was spent.

Yes, I know this is an outlier and yes, university leadership could have said no - but you're risking pissing off a doner who's given 100m+ over the years and will likely continue giving (and you know Tepper will continue guiding further capital expenditures as he sees the need).

Those are all decisions the university leadership made. David Tepper (?) doesn't run the school - the university leadership decided to make those decisions to get the money. They could have said "this isn't sustainable", and their hands weren't tied.

"Your $100m gift will cost us $200m, we can't accept it as currently stipulated".

All university leadership decisions that they failed on.

yeah way easier to blame the donor for his pesky asks

What risk in there in pissing off the donor if the donor's gifts all cost you at least that much? If someone offers me $100 million but conditions it on me spending $101 million, it doesn't really matter how upset they get with me because I was never going to come out ahead in that deal anyway.

Now also called the Tepper School of Business!

I think you're referring to small incremental donations while their person you're replying to is referring to the giant "you must name a building after me" ones.

Naming a building after someone doesn't have a financial aspect.

If a gift requires further spending later and the overall benefit is net negative, its up to the university to negotiate terms or turn it down.

It's all university leadership failing to steward their university.

It means a new building. And are you saying that if admitting a legacy kid or taking a restricted donation is net negative they shouldn’t do it? They just need to know in advance if the future donations from the family will be worth it? How simple!

Again if a gift will create a big long term financial obligation that will end up making it a net negative, it is obviously the role of leadership to choose whether to implement it or not.

Taking into account fictional future donations and communicating with donator and explaining the issue is called negotiation. Being convinced to make bad financial decisions in fear of losing a donator is again, a failure of leadership.

If someone offers you $10 if you spend $100 later you're better off not taking it, even if you could have bought something with that $10. That basic financial stewardship is the role of university leadership to deal with. They failed.

> university leadership that's choosing to make large capital expenditures

SUNY Binghamton recently received a private donation of $60 million, with a rule from the person donating it had to be spent on a new baseball stadium. Do you think the university leadership should have declined the offer?

If it costs more than $60 million to build the stadium, sure.

What good is a $60 million donation if it costs you $100 million on something you weren't going to buy in the first place?

Because now you have a $100M stadium that you only paid $40M for. That stadium generates revenue. You just need to make sure the numbers work

This is lower tier D1 baseball in the Northeast, so revenue is going to be minimal.

> You just need to make sure the numbers work

The entire point of this thread is that universities aren't doing that, because they're accepting $100 million donations with quarter-billion dollar lifetime price tags tied with them.

How often does anyone donate millions of dollars with no strings attached, especially to a university?

If someone offers you $5m and in return you have to spend $25m, you can choose not to go -$20m by just not accepting the $5m under the terms proposed. Thats fiscal leadership.

Another option in this case is to find other donors to make up the rest. Maybe one can have the largest lecture theatre named after them, or the street renamed, or choose the art, etc.

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