🎓 Rethinking Endowments: Why University Presidents Should Advocate for Unrestricted Giving

In an era marked by enrollment pressures, shifting student needs, and economic uncertainty, college and university leaders must rethink how they use one of their largest financial tools — the endowment.

While endowments are often viewed as a safety net, too much of that capital is locked away in restricted funds, tied to specific purposes by well-meaning donors. This limits an institution’s ability to meet current and emerging challenges.

The Case for Reducing Restrictions

Restricted endowments are valuable, but they often create financial inflexibility. They may fund a named professorship or a specific scholarship, but they can’t be easily redeployed when a university faces falling enrollment, infrastructure needs, or unexpected budget shortfalls.

By contrast, unrestricted endowment funds allow universities to:

✅ Invest in strategic priorities

✅ Provide emergency financial aid

✅ Launch new academic programs

✅ Respond to unforeseen economic pressures

When donors give without restrictions, they empower institutions to serve students today and preserve long-term sustainability.

How Leaders Can Shift Donor Mindsets

University presidents and advancement teams can actively encourage a cultural shift in donor giving. Here’s how:

1. Tell the Story of Flexibility

Help donors understand that they can make the most significant impact by giving university leaders the flexibility to address evolving priorities.

2. Honor Unrestricted Gifts

Celebrate and publicly recognize donors who provide unrestricted funds. This signals to the broader community that these gifts are essential to the institution's mission.

3. Revisit Outdated Restrictions

Engage with long-time donors and their families to review existing endowment terms. Many donors are open to modernizing their gift agreements to support students better today.

Real-World Examples: Universities Doing It Right

Several leading institutions have made unrestricted giving a core strategy:

🔹 Harvard University integrated flexible giving into its capital campaign messaging, encouraging donors to support current-use funds that could be deployed quickly.

🔹 The University of Southern California (USC) made flexible, current-use giving a top priority during its $7 billion campaign, educating donors on the importance of adaptability.

🔹 Dartmouth College prioritized the Dartmouth Fund, which directs largely unrestricted annual gifts toward the institution’s most pressing needs.

These examples show that real change is possible when university leaders engage donors in conversations about financial flexibility.

At KDM Advisors, we work closely with higher education leaders to help them align financial strategy with institutional mission. We believe the time is now for presidents, boards, and advancement teams to rethink how their endowments are structured and how they engage donors in that conversation.

Unrestricted philanthropy isn’t just good stewardship — it’s a strategic imperative. Let’s help institutions build the financial flexibility they need to thrive today and tomorrow.

Interested in learning how your institution can unlock more value from its endowment?

📩 Contact us at kmaher@kdmadvisors.net to start the conversation.