Orracle and Family

Orracle and Family

Wednesday, October 24, 2007

Does This Gift Keep Giving?

We often see where individuals or estates give very large gifts to nonprofits or colleges. Just today, a couple gave 60 Million to St. Thomas University which can be viewed in the following story. http://www.startribune.com/462/story/1506010.html. This is the largest donation to a Minnesota university ever surpassing the previous high of $50 million also donated to St. Thomas.

There are stories of the numerous people that win the lottery that become bankrupt not long after their large windfall.

Do the nonprofits do the same? Will St. Thomas have to raise tuition or start a big fundriaser in 5 years?

I recall a large gift given to Como Park Conservatory in Saint Paul some years ago. Within months of the gift, a large construction project began, adding a large new area to the conservatory. Did Como shoot the whole wad on one project or did they put some away for a rainy day (or hail-y day with tons of broken windows on the conservatory ceiling)?

It would seem that an institution that probably was not rolling in the cash up to that point would want to have the terrific interest as a residual source of money to maintain the great Como facility. A modest facility could have been built with the remainder earning interest. I should confess, that may very well be the case with the Como situation. From the outsider's view of the annex, it would seem they spent all they had.

If the money donated was specifically earmarked to a project, building or stadium, full allocation is warranted. Often, these gifts are simply nothing but a donation.

Now we look to universities. $110,000,000 between these 2 gifts! What will a relatively "rich" system do with that money? Build something all at once? Provide financial assistance to students that deserve a school like St. Thomas but could never afford? The StarTribune story indicates that the "lagest part" of this fund raising goal is to provide financial assistance to students of the future. This donation is part of a larger fund raiser.

Assuming this is true, and St. Thomas allows this money to give and bless for years to come, it clearly makes the generosity of these individuals much more monumental than the even the initial donation. I hope St. Thomas makes good on their word with this windfall of money and more importantly that other entities follow their example.

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The ORRacle!

The ORRacle!