University Development: Mind the Generational Wealth Gap

Temple University this month sent slogan-emblazoned beer coasters to its alumni as part of a new solicitation campaign. "When you invest in a Temple scholarship," an accompanying letter reads, "Temple Trustee Lewis Katz CST '63 will too. So indulge in the Young Alumni Scholarship Challenge." Katz will match any financial support alumni give, dollar for dollar, up to $200,000.

What indeed would stop someone from "indulging" in such a challenge?

The pitch may as well read, "Attention: young, educated binge drinkers. Baby boomer Lewis Katz is so much richer than you that he’s single-handedly giving as much to the alma mater as all you whippersnappers combined."

After Temple, Lewis Katz got his law degree from Penn State in 1966. Between 1967 and 2010, median income for people over 65 grew four times faster than it did for people under 35, according to Pew Social Trend’s Census data analysis; the number of impoverished people under 35 almost doubled during that same period.

It's easy to read this pitch as commentary on the generational wealth gap. And that type of thing doesn’t put me in a generous mood, personally.

GE Foundation introduced the first gift-matching program for ex-employees in 1954. The education sector soon caught on. Universities received around $80 million in donations through matching gifts in 1984, according to the Chronicle of Higher Education, though they offer no direct source for that number. A 2012 CAE survey estimates that U.S. universities and colleges received around $137 million in matching gifts that year.

To Temple’s credit, their solicitation coaster and accompanying letter clearly present the terms of their matching gift offer: not something donors can always expect. Eager to benefit from the rising popularity this type of donation has garnered, some fundraisers "call just about any giving opportunity a match or a challenge," writes Caroline Preston in a 2012 Chronicle of Philanthropy article.

Preston takes for example an e-mail solicitation from Mercy Corps, a disaster relief nonprofit. Each donated dollar, according the offer, "provides six times as much help for the families who need it most... so your $20 becomes $120." In reality, Mercy Corps depends on individual donors for 1/6th of their total income. No additional money is donated per individual gift.

Solicitors have also been known to fudge information regarding how much a campaign "raises from individuals... [versus] how much it gets from other sources."

So, praise Temple’s new solicitation campaign for its clarity and honesty. As the other 4,985 Temple grads, dropouts and I contemplate the $7.7 million we owe on defaulted Perkins loans, beer coasters are helpful.