This past weekend I had dinner and drinks with a couple of college buddies. The buddies are on my class reunion committee and as part of the organization of the reunion they are suppose to try to get their fellow classmate to donate to our school, but they had a hard time justifying why we should give money to our school. In part because as you may know Grinnell College our school has an endowment of around 1.67 BILLION DOLLARS*, while Beloit College, where I taught last year, has an endowment of about 100 million dollars. Another way to think about it is Grinnell could put its endowment entirely in bonds and have a return each year of Beloit’s endowment.
As an economist I want to know what is the additional impact of an extra dollar given to each of these school? I think at this point the marginal impact of the first $1 to Grinnell is that it helps our US News and World Report ranking as it counts % of alumni contributing. After the first $1 what is the marginal impact for a school like Grinnell with nearly 1 million dollars per student. My guess is a $1 given to Beloit will do more good.
Grinnell’s endowment per student is surpassed only by a few schools. Currently congressional pressure is coming on Yale and Harvard from Iowa’s Senator Grassley to spend that endowment or lose their tax exempt status (article). Alumni are doubtful as Yale may not Get Ben Stein's money. Grinnell has rebuilt or is going to rebuild about every building on campus. They could increase financial aid.
Later today I will send this entry to the alumni association of both Beloit and Grinnell , and ask what is the marginal benefit of my dollar? The best response gets a $200 contribution from me.
*** Update. My father asks if I can make the same offer to Ohio Wesleyan. Yes. Any small liberal arts college whose Alumni Relations staff makes an appeal to me is eligible. Grinnell and Beloit to have an advantage as I factor in my feeling for the University