questionsdo you prefer donating towards the annual budget…

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1. people who use the term "Alma Mater" are usually too pretentious for me.
2. Considering what a college/university education costs, who on earth would want to donate money to them?

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What's a less pretentious term for "Alma Mater" then?

It doesn't have be donating to a college/university. I happen to like mine and support their mission, but there are other nonprofits/charities that are large enough to have endowments (schools just tend to be the majority).

My point being that if there's a charity or nonprofit whose mission you support, donating to their endowment will allow them to do good work in future years. On the other hand it means that they won't be able to use that money to do good work now. How do you balance that present need against future needs?

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I couldn't agree with @kamikazeken's second point any more. I have to pay $400 per credit hour to go to a school where my classroom is located in a hospital and the teacher is 110 miles away, so I learn via Skype, basically (it's a different program, but it's 99% the same thing). I'm unable to talk to my professors or even my academic advisors unless I'm willing to drive all the way down there, and even if I do, I'm treated like a second-class student because I don't live on campus. If they need cash from me, too bad, they've got all I'll ever give.

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I've always thought "school spirit" was a wierd concept. For me, going to universities (2 degrees, 2 universities) was a business transaction, plain and simple.

I mean, I don't go back to Wal*Mart after a completed transaction and give them any extra money to pay for their operating budget or fund an endowment, why would I do that for a university (or any other business, for that matter, and universities are certainly BIG business)?

I bought a product from a university, I did not enroll in a life-long subscription program.

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As a lifetime alum at two universities, I get to contribute a lot. Both are public, not private institutions, that is, non-profit. I look at it as a way to give back to institutions that helped me to retire early. Since the politicians in Florida have been searching for ways to cripple the public education system (cutting funds is one), I feel that contributing to their funds is a way to counteract that.
To answer the original question, if you are contributing a huge amount, give it to the endowment fund. If you are giving a few hundred per year, the annual budget is a good choice.
(No, I am not a former college professor, I was a software engineer)

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@olperfesser: Thank you for actually answering the question.

Most private institutions are also non-profit, and in fact are counted as public charities by the IRS (even Harvard with its massive $26 billion endowment). Even with tuition so expensive, most of the cost of education is still subsidized by endowment and donations. I figure that since someone else paid for a good portion of my education then it's in good faith to pay it forward.

A lot of arts and humanities institutions, like museums, orchestras, dance companies, etc., also operate the same way; they rely on a mix of revenue, donations, and endowment.