The prosperity of the American economy during the last two years paid off big for investors, corporations and state and federal governments. The University’s slice of the pie wasn’t too shabby either.
During its fiscal year — June 30, 1997 to June 30, 1998 — the University collected more than $134 million in donations, the most ever. It joined hundreds of other universities and organizations nationwide that also reached new donation records.
The basis for the boom is simple: organizations like the University became richer because America became richer. Sharing their wealth, Americans donated a record $143.5 billion in 1997, up 7.5 percent from the previous year.
During the same period, major stock market indices like the Dow Jones Industrials Average and the Standard and Poor’s 500 were reaching new heights, making even the average investor feel like a Rockefeller.
“Capital campaigns and other donations are very much stock-market driven,” said Ann Kaplan, research director with the American Association of Fund-Raising Counsel, a New York consulting firm. For example, the NASDAQ composite — a major market index that tracks technology stocks — surged 23.89 percent while the University’s donations rocketed along with it to 25.7 percent.
With dark clouds looming over financial markets across the globe, Kaplan said it isn’t likely that donations in 1998-99 will be as large as in 1997-98.
However, one point Kaplan made to the contrary was that if markets do continue their decline, donating a chunk of money will be a wise choice for some. By writing a check, an individual or foundation is putting money to use that might otherwise get sucked down if the bottom drops out of their investments.
At the University, those within the Minnesota Foundation agree on the significance of the market’s role in peoples’ decisions to support the University, but they also argue that philanthropists and corporations give because they see their money being put to good use.
It’s been about 10 years since the University’s large capital campaign in 1988 when $365 million was raised to recruit and retain the best scholars, said Gerald Fischer, president and chief executive officer of the University of Minnesota Foundation.
“(Contributors) see now that there have been outstanding results,” he said.
But not everything in the realm of fund raising depends on the stock market and the economy. More often than not, people and foundations donate because they want to improve some part of the University.
“People want to take advantage of tax benefits, definitely,” said Brad Choate, president and chief executive officer of the Minnesota Medical Foundation. But, he said, that’s only part of it.
“They’re interested in curing cancer or the invention of a new pacemaker.”