The Rules of Giving – What philanthropy can, and can’t do
By Stuart H. (Kip) Cobbett (Chair of McGill’s Board of Governors)
Given the large government cut to our operating budget, some in our community are wondering to what extent money from philanthropic gifts can help. Gifts of all sizes are an essential financial cornerstone for our University: a steady and dependable source of funding to fuel progress in research, teaching and community engagement. But while private giving plays a huge role in McGill’s excellence and success, very little of the funding can be used to make up for operating shortfalls.
Since our founding through a generous bequest from James McGill back in 1821, we have been very privileged to have many generous and committed donors, from established philanthropists to thousands of alumni sending us regular and much appreciated annual contributions. Donors give with very specific goals in mind. Benefactors exercise their values through giving, and beneficiaries, through the gift, help to put those values or dreams into action (a more educated or healthier society, for example).
There are two ways donors can give to McGill:
- Endowed gifts: This fund is intended to secure the University’s long term future. Thanks to generations of gift donors, McGill’s endowment fund has accumulated over one billion dollars. However, the principal of the endowment cannot be spent; instead, annual income is distributed at a pre-set rate determined by the University’s investment committee.
- Direct-spend gifts: A set sum, given as a one-time payment or in increments over a period of time, as specified by the donor.
So why can’t we simply take our donors’ generous gifts and use them to shore up our operating budget? The simple answer is that virtually all of the money we receive from donors, including funds from Campaign McGill, is designated by donors to a specific purpose of their choosing, aligned with McGill’s priorities and mission.
Generally, benefactors give to:
- Student support: to create new scholarships, bursaries, fellowships, and awards.
- Faculty support: to fund Chairs and recruit world-class professors and researchers.
- Academic and research programs: to support innovative teaching and research programs across our Faculties, schools and departments.
- Infrastructure: to improve the quality of teaching and research facilities and equipment.
Last year, philanthropic gifts of all types generated revenues of just over $87 million, and on top of that, $40.8 million was paid out from the endowment fund, all to support causes chosen by donors in support of McGill’s priorities. Although we cannot rely on philanthropic gifts to pay for our staff’s compensation, heat our buildings, provide security services on campus, or any of the other important areas affected by the $43.5 million shortfall in our operating fund, philanthropic gifts provide an absolutely essential and steady source of funding to guarantee that McGill is accessible to every deserving student irrespective of financial means; that we provide our students with an outstanding and rich educational experience; and that our core academic and research mission remains strong despite our current challenges.