A University’s endowment is a primary quantitative measure for purposes of national rankings, such as enrollment or sponsored research funding. UH must increase its endowment if it wants to achieve flagship status.
There seems to be some confusion about how an endowment is increased. One misunderstanding concerns the role corporations have in the increase. Generally speaking, soliciting corporations for endowment contributions is ineffective in the world of corporate philanthropy as it exists.
A University’s endowment, such as a savings account, is not to be spent. Rather, the interest generated by the endowment is what is spent. The endowment itself is intended to be preserved into perpetuity, ensuring the institution’s future prosperity.
Corporations prefer to make gifts to benefit immediate business needs. A scholarship may help them recruit the best students. A capital gift will allow them to name a facility and generate publicity. Typically corporations want to invest, not donate. They want to realize returns on their investments sooner rather than later. For this reason, corporations tend to support operating funds and programs in which their gifts will be put to immediate use and produce tangible results. Based on our relationships and conversations with companies of all sizes corporations prefer not to fund endowments as a rule.
Occasionally a company will disregard such a rule because the immediate benefit is too great to ignore. Such was the case with the $6 million ConocoPhillips gift to the University of Oklahoma. Part of that gift endowed scholarships and faculty positions, but in return the university renamed its geology program the ConocoPhillips School of Geology and Geophysics, an obvious benefit to the corporation.
The University of Houston must actively pursue donations from large corporations; however, those donations will typically be directed toward operating funds and programs. If a corporation offers to support the endowment, that option certainly will be considered.
In the end, individual donors such as alumni and community leaders represent the greatest opportunity for gifts to endowments because individuals tend to be more altruistic and have a university’s long-term interest at heart.
Regardless of the source of the contributions, an increased endowment is essential to making UH the state’s next "Tier 1" University.
Holdeman, the Executive Director for Corporate and Foundation Relations for UH, can be reached via [email protected].
