Resuscitating Dead Money

Last week Matt Reed (“Confessions of a Community College Dean”) lamented unused funds given by donors in his post “Dead Money.” He wondered what could be done about funds (especially scholarship dollars) whose restrictions make them impossible to use. If there were a topic most likely to ignite a rant from me, this would be it. If I were the Lewis Black of higher education, this would be the column of a million opinions.

If I thought I could, I’d lay down an angry, unhinged tirade right here, right now. Would Inside Higher Ed even allow the use of “fuck,” “fuckers,” “fuckery” and “fucking” in a blog post? I wonder. (If those words were changed to *&#! and other symbols, the answer was “no.”). I don’t even think an old-school Ed Anger Weekly World News wacko politics-laden rant would do the trick for me when it comes to this subject. Nevertheless, I’ll try to keep this clean if I can.

Nothing makes me madder than unused donations. Well, let’s just say it’s in my top 10 things in higher ed causing my wig to be flipped. You’d find it somewhere after discrimination, assault, harassment, maleficence in the workplace and somewhere before paranoid university presidents stuffing full-length puffy coats under doors for soundproofing, deans asking for logos, and students asking if what I just said is going to be on an exam. Why? Because leaving donations unused is unethical, unbelievable, unnecessary and avoidable.

I imagine a few of you might be asking in a snotty, high-and-mighty, can’t-be-bothered-to-talk-about-money tenured tone, “Who made you the Ralph Nader of charitable contributions?” After more than 30 years working with donors in every aspect of fundraising and conducting audits of somewhere near 1,000 endowment accounts, I’ll retort in my best Lewis-Black-about-to-have-a-thrombo-talking-about-Asheville voice (sans the F-words), “Call me a self-appointed activist, damn it. I don’t care. I’ve seen some shit.” More politely, I’ll say, “It’s my day job to unravel and overcome obstacles institutions face in spending donor-provided funds.”

Here’s the thing: there’s always been some elementary school teacher slowly investing pennies in the stock market, a cantankerous couple buying a 10-gallon vat of pickles at Costco and an older man hiding pants in the racks at Goodwill until senior day when he can get 10 percent off. They do these things to save their money and to be able to give it all away to some college or university when they die. I’ve seen more gifts come in from people like that than the superwealthy who buy yachts, estates for eight figures and ridiculously expensive $65 T-shirts from Jason Scott. Just knowing regular people give that many shits on a daily basis, so students, faculty, staff and alums have better opportunities, should be reason enough for employees and institutions to be the best stewards of contributions possible.

In his column, Matt talked about how restrictions on spending seem to be the reason for dead money, but there are other reasons, too, such as:

• Departments not knowing funds are available and/or being confused about which account is which. (This happens all the time with similarly named accounts. Imagine eight endowment accounts named Johnson. It is a real problem. Everyone needs to work on fixing communications and naming conventions.)
• An overworked employee toiling away decades ago shorthanded the restrictions so the information fit in a database that only allowed a certain number of characters per field. It’s never been fixed; now the entry has become “business office law.” (If I could go back in time, I’d chew out some program developers who created early databases and business systems. What were they thinking? Also, to the business office, please take a humility pill and realize you’re not always right.)
• An officious employee at one time or another in the past imposed restrictions never intended by the donor in order to create an “improved” and “clear” process to follow. (When I discover this type of nonsense, I close my office door to contain the expletives emanating from my mouth. Unraveling stupid, petty, controlling, shortsighted, clenching-sphincter idiocy is a royal pain.)
• A scarcity mentality whereby departments created their own restrictions because they’re afraid of running out of money. Fast-forward a few years, and people don’t know the difference between what the department fabricated and what the donor intended. (Spoiler alert: Donors give money because they want you to spend it. If you don’t spend the money, they think you don’t need it, and then they won’t give you anymore. It’s simple. Spend the damn money and ask for more money. OMG, people—you’re killing me.)

In summary, and in the vernacular, I would bet my left nut (if I had one) that there is available donor money that can be spent right now by departments. I’ve found and helped to release millions. The reason funds aren’t being spent has nothing to do with the donor’s original restrictions and more to do with miscommunication, misunderstanding, self-imposed restrictions and a breakdown of policies, procedures and workflows.

I have a very healthy bit of skepticism when people wring their hands and gnash their teeth about dead money. Whenever someone tells me some funds can’t be used because of the restrictions, I take it as a challenge to prove whether it’s true or not—as in, hold my earrings; we’re going to need to take it outside. I don’t believe it until it’s proven with evidence. (No, sorry, business office people, just because the criteria are listed in some spreadsheet doesn’t make it true. And, no, sorry, advancement people, just because some beloved long-serving alumni relations director said it doesn’t make it gospel, either.)

So, to finally answer Matt’s question about what can be done about dead money, here’s my advice.

First, you must ensure the funds are clinically and certifiably dead. Only then do you need to petition the courts to change the restrictions. In the words of Monty Python and the Holy Grail, it’s possible and probable for the funds to be “not dead yet.” Determining if the funds are dead requires research using appropriate research methods (i.e., primary sources) and conducted by a professional who understands contractual agreements, philanthropy, higher education, compliance and law.

And, please, dear Lord, someone explain to the president and the trustees that doing this sort of research cannot be done by a work-study student or student intern, who likely barely passed research methods and can only work four hours a week. Nor can it be done by the insipid employee that no one wanted to fire because they are a “nice person” and distantly related to a major donor and who is now relegated to work in the library, advancement or IT, where they theoretically “can’t do much damage.”

Researching and auditing accounts require thoroughly reviewing historical records (and not just some emails written last year or the ones some knucklehead haphazardly scanned into RaiserEdge, leaving out crucial pages). Also, I can tell you based upon experience that computer records can be wrong, very wrong. I’ve seen donor histories wiped into oblivion due to conversions to new platforms (Read: I loathe the 1980s rush to convert paper donor records to RadioShack computer programs. The words “blank fund code” are known to elicit F-bombs from me.) Untangling restrictions requires poring over handwritten notes on Hallmark cards and personalized stationery, typewriter letters on yellowed letterhead, and copies of thank-yous barely visible on onionskin paper. (Note: No one should ever be permitted to discard paper donor records.)

Auditing funds requires the tenacity of a truth-obsessed ABD Ph.D. candidate who is unafraid of getting filthy and cares little about the spiders, snakes, raccoons and rodents in the kind of storage building that someone from Facilities must unlock. Only by doing this will one know the original restrictions and if your funds are dead or if they are mostly dead (nods to The Princess Bride).

Bottom line: It’s worth the effort and investment to resuscitate dead money. Doing so not only releases badly needed funds but can also instill (and, if necessary, restore) donor confidence in your institution’s ability to be good stewards, hopefully inspiring more giving.

Also, don’t be too quick to believe it when someone says, “Oh, we can’t change the restrictions because we can’t find any living descendants of the donor.” To that, I say, “Horseshit.” In today’s information age, you can find anyone by doing a modicum of online research (just ask my ex-husband, eye roll). Not only can you find obituaries dating back decades listing kin, but you can also find where those relatives live and work. As my parents always said, “Where there’s a will, there’s a way.”

And, finally, a bit of advice to vice presidents for advancement and others overseeing the creation of gift agreements. One of the best ways to prevent dead money is to keep things as simple as possible regarding restrictions. When a donor or gift officer wants to overengineer the criteria and the process with a dozen requirements and steps, put on your big-girl panties (purchased out of town, of course) and just say no. Ask yourself, “What will it take to operationalize this gift?” and then make decisions that will facilitate responsible, effective and efficient spending. Future generations of students, faculty, staff and donors will thank you.