A common theme across Inside Philanthropy’s pre-pandemic higher ed vertical was funders’ frustrating lack of support for the nation’s engine of economic mobility, community colleges.
According to the Council for Aid to Education, only 1.5% of the $43.6 billion raised by colleges and universities in 2017 flowed to two-year institutions, which serve almost half of the country’s college students. A search of 2018 higher ed mega-gifts reveals that 16 funders made one-time donations to four-year institutions that exceeded the $53.1 million in combined major gifts ($1 million and up) received by all of the country’s community colleges that same year.
Will the pandemic, which has hit community colleges especially hard, remedy this stark disparity?
News out of California provides cause for optimism. The Jay Pritzker Foundation, named after the founder of Hyatt Hotels, pledged $100 million for scholarships and emergency financial aid to the Foundation for California Community Colleges (FCCC) to be spent over the next two decades. It’s the largest gift ever made to a community college system.
“We believe community colleges are a great underutilized resource that can help close the widening education gap, income gap and make our country more equitable,” said foundation president and one of Jay’s five children, Daniel Pritzker, whose net worth stands at $2.4 billion. With a combined net worth of $29 billion, the Pritzkers are the seventh-wealthiest family in the U.S., according to Forbes.
As we’ll see, community colleges have been able to raise substantial amounts of money during the pandemic thanks to small donations. However, some fundraising experts worry that this support may wane once the crisis recedes. Or maybe not. Much like MacKenzie Scott’s $100 million infusion to historically black colleges and universities during the pandemic, the Pritzker commitment is a mega-gift from an established brand. It might finally help spur equity-minded funders to support community colleges in a sustainable way.
Chicago’s first family of philanthropy
Given the Pritzker family’s strong ties to Chicago, the Jay Pritzker Foundation doesn’t appear to be a prime candidate for a game-changing gift to California community colleges. Here’s a quick run-down of the family.
Family patriarch Nicholas Pritzker came to Chicago from Ukraine in the late 19th century. His descendants “have lived and worked in Chicago ever since, with each succeeding generation growing up in the tradition of giving,” said the Carnegie Corporation of New York after bestowing the family with its 2011 medal of philanthropy.
Jay (1922-1999), one of Nicholas’s three sons, was born in Chicago, attended the University of Chicago and Northwestern University, and built his business empire in the Windy City. After he passed away in 1999, the Pritzkers entered into a protracted feud to divvy up the family fortune. When the dust settled, 11 Pritzkers walked away with over $1 billion each.
Jay’s nephew, J.B. Pritzker, is currently Illinois’ philanthropist-turned-governor. In 2015, he and his wife M.K. gave Northwestern’s law school a then-record $100 million gift. More recently, the couple donated $4 million to the Illinois COVID-19 Response fund—$2 million personal and $2 million through their family foundation. J.B.’s sister Penny chairs the fund. The siblings also gave to the Chicago Community COVID-19 Response Fund.
Pritzker name, California focus
As Philip Rojc wrote in his 2016 overview of the family’s most notable philanthropists, while the family name may be synonymous with Chicago, some heirs, like Jay’s daughter Gigi and Anthony, the son of Jay’s brother Donald, have put down roots in Los Angeles.
Take I-5 north of out L.A. and in six hours, you’ll hit Kentfield, located 18 miles north of San Francisco. That’s where Daniel and Karen Pritzker call home. The couple are trustees of the Jay Pritzker Foundation, and a closer look at the foundation’s 2018 Form 990 reveals a penchant for Northern California-based organizations.
That year, the foundation awarded $12.2 million in disbursements for charitable expenses. Of the 35 grants awarded, 43% flowed to organizations in San Francisco or Marin County, followed by the D.C. Metro area, at 20%. Northern California-based organizations netted approximately half of the total funding, with the largest gift, at $5,500,000, going to the San Francisco-based Tides Foundation. The foundation only made two grants to Chicago-based organizations; however, one of them, a private coeducational preschool called Providence St. Mel School, received the second-largest grant, at $4,000,000.
Daniel is a 1981 graduate of Tufts University in Medford, Massachusetts, and earned a Juris Doctor from Northwestern University Law School in 1986. In 2004, the foundation created the Pritzker Challenge at Tufts to establish endowed or term scholarships for underprivileged minority students.
An important “close-up view”
Of course, none of this explains why the foundation made the largest gift ever to California’s community college system. The primary reason, according to Pritzker, is the simple fact that his daughter transferred out of a private school and took community college courses before enrolling at UC Berkeley. “She loved it, she enjoyed the professors and the kids, and she decided to stay and complete,” he said. “That really gave us an up-close view of what community colleges had to offer students.”
His daughter’s trajectory underscores a subtle but nonetheless encouraging aspect of the gift. Back in July, I spoke with Walter J. Dillingham Jr., CFA managing director of endowments and foundations at Wilmington Trust, about how community colleges can build endowments during the pandemic.
I asked him to comment on the theory that community colleges have failed to generate significant philanthropic support because they lack a deep bench of affluent alumni. Dillingham wasn’t convinced. After all, he said, many students go on to four-year colleges and do quite well for themselves. The problem is that these students often view themselves as alumni of the four-year institution rather than the community college. “It takes a special cultivation effort from fundraisers to remind them that they helped them take the next step,” he said.
As noted, the Pritzkers’ daughter went on to enroll at Berkeley. The family’s gift is a conscious and rare acknowledgement that a community college, to paraphrase Dillingham, helped her take the next step.
Achieving impact at scale
Other factors contributed to the Pritzkers’ gift. Daniel told EdSource’s Ashley Smith he and Karen spent decades focused on improving education globally and were inspired by President Obama’s efforts to promote community colleges nationally. The couple also read articles detailing how the pandemic was adversely affecting students at the California systems’ 116 community colleges.
In September, Chancellor Eloy Ortiz Oakley said the system was seeing a 5% to 7% enrollment decline, versus 4% for the overall sector. Fifty-seven percent of the system’s students reported they faced homelessness, food or housing insecurity. “Twenty percent of students in our system said they had been furloughed or laid off during the pandemic and half have reported that their income has been lowered,” Oakley said.
The Pritzker gift will allow the foundation to deliver grants to 34 community colleges in three regions that have the lowest percentage of adults with college degrees in the state—the Inland Empire, Central Valley and Far North—during the first five years of the grant. These colleges serve a combined 334,000 students.
The first year of grants will be $150,000 per college and may be used in full for emergency financial aid. The FCCC will administer the scholarships and aid for 20 years, giving up to $18,500 to an individual per year to cover their estimated non-tuition costs, including textbooks, transportation, housing, childcare and food. After five years, the system and the foundation will evaluate student outcomes and determine if there are other areas of the state or other colleges that could benefit from the funding, Oakley said.
Back-of-the-envelope calculations show that the Pritzker gift achieves the “holy grail” of higher ed philanthropy: impact at scale. For example, by providing a maximum $18,500 scholarship, the $100 million commitment can support 5,405 students annually. Cut that scholarship amount in half, and the commitment supports 10,810 students annually. Or by allocating $5 million a year—a rounding error for most major funders—the foundation can fully support 270 students annually. And so on.
These calculations underscore how a funder can generate maximum impact with a relatively small investment. This seems like basic stuff, but, as we’ve seen, data suggests that funders had other priorities before the pandemic struck, and explains why equity advocates were rightfully dubious about pledges like Michael Bloomberg’s $1.8 billion financial aid gift to Johns Hopkins University. That commitment will ideally benefit roughly 66 students over five years. (Sara Goldrick-Rab, a professor who studies higher ed at Temple University, felt “sick to my stomach” upon hearing that Bloomberg’s money was earmarked for Johns Hopkins rather than a community college.)
An encouraging—but potentially short-lived—uptick
Last December, I spoke with Carol Krumbach, the executive director of the Cerritos College Foundation, which had just received its largest gift ever, a $2.3 million bequest from John B. Smith of Paso Robles, California. She told me that community foundations were rolling out the requisite infrastructure and alumni relations initiatives needed to consistently secure big gifts. “Many community colleges in California were founded in the 1950s and ‘60s, so it makes some sense that we’re just now starting to see more realized planned gifts from alumni,” Krumbach said.
These efforts paid impressive dividends in response to an unexpected calamity. “When COVID-19 first struck in March and April, and the country locked down, we saw a pause in fundraising activity. It wasn’t a great time to be asking people for money,” said Kestrel Linder, co-founder and CEO of GiveCampus, a digital fundraising platform for non-profit educational institutions.
Yet beginning in early May, community colleges quickly made up for lost time. Linder told Inside Higher Ed’s Madeline St. Amour that community colleges have since outperformed all education sectors compared to last year, raising 47% more in the first nine months of 2020 than they did in all of 2019.
Brian Flahaven, interim vice president of strategic partnerships for the Council for Advancement and Support of Education, told St. Amor that “really, what was driving a lot of that was small donations.” However, “there’s certainly concern about whether those are sustainable. There may be increases now, but uncertainty is the enemy of giving.”
An anomaly or a “fundamental shift?”
The Jay Pritzker Foundation gift is a completely different beast, of course—no online crowdfunding and no small donors, just a classic nine-figure mega-gift, the kind of which had previously and exclusively flowed to four-year institutions. That alone makes the gift newsworthy.
A few days after the foundation announced its big commitment, Forbes’ Michael T. Nietzel wrote an interesting piece about high-profile funders showering “institutions that serve the most diverse and financially strapped students” with huge gifts since the pandemic struck, rather than the usual affluent suspects. This development, Nietzel wrote, “may signal an important shift in the aims of major philanthropists and their support for higher education.”
He cited the Pritzker commitment, the Harold Alfond Foundation’s $240 million investment in the University of Maine System, and a spate of big HBCU gifts from high-profile funders like Scott, Reed Hastings and Patty Quillin, IBM and Michael Bloomberg, who made a $100 million donation to four historically Black medical schools in September.
Nietzel then posits two logical follow-up questions. “Is this year just an anomaly, a temporary readjustment inspired by the pandemic and racial justice concerns? Or does it signal a fundamental shift in giving priorities, with major donors looking to invest in institutions that serve larger shares of low-income and minority students?”
If this trend ends up being a “fundamental shift,” we should expect the Jay Pritzker Foundation’s 20-year commitment to galvanize other equity-minded funders to provide community colleges with substantial support in the months and years ahead—which is precisely what Daniel Pritzker is calling for.
“Community colleges provide equal opportunity to pursue high-quality education without incurring crushing debt,” he said. “We believe education is the key to preserving our democracy and hope others will join in supporting community colleges across the country.”
