Colleges fear donor drop-off

Corporations expected to trim largess as economy sours

Intelligencer Journal

Published: Oct 24, 2008
17:58 EST

By MADELYN PENNINO, Staff Writer

Correction — The story below, posted on LancasterOnline Friday, incorrectly stated that Franklin & Marshall College matches monetary gifts made by corporations. In many cases when an individual makes a donation to the college, their employer matches the donation. Also, Elizabethtown College raised nearly $32 million over the past five years in gifts.

•••

Local college officials are waiting to see if the economic crisis will keep corporations from digging into their pockets and donating money.

Jerry Eckert, Millersville University's vice president of advancement, said it's too early to say how much corporate donations will drop, but he expects to see a decline by the end of the year.

"We haven't felt an immediate pinch," Eckert said. "But there's definitely been a slowdown. That's a worry to me."

In 2007-08, the school received $1.9 million in donations and pledges from 211 corporations in Lancaster, York, Berks and Dauphin counties, Eckert said. Its operating budget for the year was about $123 million.

David Beidelman, Elizabethtown College's vice president for institutional advancement and community relations, said he doesn't anticipate a decline in the number of corporations giving money, but donations may be smaller than in the past.

"Corporations operate much like a college endowment, where money must be spent," Beidelman said.

Elizabethtown receives between $1.4 million and $1.5 million from large corporations and foundations annually, including matching funds, Beidelman said. It receives another $40,000 to $50,000 from small businesses. The school's yearly budget is about $52 million.

Although there are restrictions on how corporate gifts can be spent, Eckert said most of the money Millersville receives is used for student internships, the purchase of classroom equipment and scholarships.

Over the past 40 years, recessions that last eight months or more have seen about a 1.9 percent drop in corporate giving, according to GivingUSA Foundation.

Donations are far from colleges' only financial concern. Due to the sputtering economy, Gov. Ed Rendell recently requested that the State System of Higher Education, which includes Millersville, forgo up to 4.25 percent of the money it was allocated for 2008-09.

That means the state system, which is expected to approve the request next week, will keep $21 million in reserves in case the state needs it. Millersville would be required to give up $1.6 million.

To offset costs, Eckert said Millersville is considering putting a freeze on hiring instructors. He said that could have a negative impact on the community.

"If you freeze teaching positions you possibly postpone the ability of a student to graduate and enter the job market because there is no one to teach a necessary course," Eckert said. "When a student does not graduate and enter the work force, there's no exchange of goods and services."

Eckert said school officials will make a decision on the freeze next month.

Beidelman is concerned that colleges may see a decrease in contributions from alumni, parents and other individuals. In the past five years, Elizabethtown College has raised almost $12 million through individual contributions, Beidelman said.

Overall charitable giving has declined 1.6 percent during recessions, according to GivingUSA.

To keep corporate donations coming in, schools need to communicate aggressively with donors, Beidelman said.

"I think we're at the point in the market where we need to make sure donors are aware of how important their support is in terms of internships and job and research opportunities," he said. "It's more than just a contribution."

Eckert echoed that view, saying schools must show corporations and foundations that their money is being put to good use.

"The university must show that they are good stewards of those dollars and dollars in general and are able to make progress without being excessive," Eckert said.

Franklin & Marshall College does not receive a large number of corporate donations, according to spokeswoman Dulcey Antonucci. However, as in the case of Elizabethtown College, corporate gifts are matched by the college, Antonucci said.

E-mail: mpennino@lnpnews.com