Donated buildings: Show Me the (Operating) Money

Mills College (a prestigious women's college in Oakland, Calif.,—that is, a prestigious college for women, some of whom actually become prestigious themselves) is building a new LEED Natural Sciences Building. (Is it legal to build a natural sciences building that is not LEED?) The building, which is supposed to be completed in 2007, is being built with a generous gift from the Wayne and Gladys Valley Foundation, which has put up a lot of hard earned money in the form of a "Challenge Gift." That means Wayne and Gladys put up a big chunk of change, but not all of the construction funds. "Challenge Gift" is a donor-leveraging concept that requires a lot of other people to pony up an equal if not greater amount of cash if construction is to get any further than a foundation and structural frame.

So where does the Estate of Eileen Mitchell Gibbs come in? Well, Eileen (and I wish she were here to read this) donated a building maintenance endowment to cover ALL (I repeat, ALL) of the on-going maintenance costs—forever! If you are in the know, you know that this is no small donation, especially in the case of a science building.

Whose name do you think is going to be on the building? Thirty years from now, who do you think will have made the biggest financial contribution?

One solution is to have no name on the building—that would be the fairest. Or all names—the Wayne, Gladys, Eileen Natural Science Building (or for short, The WAGILEEN Building—I actually live on a street that got its name in this manner, so I know it can be done).

But the point here is not about names. It is about donated buildings and generous but possibly ill-informed or short-sighted givers (I am not referring here in any way to Wayne and Gladys) who give money to build buildings that have their names on them, but give not one iota of thought to the high, year-after-year costs into infinity and beyond that maintaining their gifts are going to suck out of the recipient institutions. These donated buildings become like Trojan Horses that, once in place, disgorge scores of little budget-eaters who gobble up money until the day those buildings are torn down.

The rough numbers are that it takes a $20-million maintenance endowment to support a $20-million building.

I suggest a naming system for donated buildings to indicate whether or not the building came fully funded with its own maintenance endowment (The John Smuggleware Premium Science Building), or just bare-bones with no financial provisions made beyond dedication day (the John Smuggleware Regular Science Building). Why not? After all, the donation solicitations I receive from my alma maters give the option of being a big, "Chancellor's Inner-circle" giver or just a regular, "Friend of the School" giver. So why not building donors?

So, there you have it—maintenance endowments (and new naming schemes to help that to happen) or Trojan-Horse gifts that suck the life out of operating budgets. The choice is yours.

Your success stories of raising maintenance endowments will be enthusiastically received.

Meanwhile, you might want to anonymously forward this opinion piece on to your next building donor.

By Steven L Westfall, Ph.D., President, Tradeline Inc.

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