ALLISON SCHRAGER | THE MICROPHILANTHROPIST | December 10th 2007

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Should you give $300 to one school, or $100 to each of three schools? Allison Schrager says it makes more difference than you might expect, taking into account the effect of your donation on others ...

Special to MORE INTELLIGENT LIFE

THE holiday season comes, and with it parties and receptions given by every employer and every school on my curriculum vitae since the age of 14. Never one to say no to an open bar, I made the rounds this past week.

I was impressed to find that a high-school classmate had established an $8 million scholarship fund for African children. What a way to give! The still-young man in question had a large trust fund of his own. But how can the rest of us make a contribution to education—those of us whose current "endowment" is just a hair larger than our next credit card statement?

Let's say my aim is to extend high-quality education in the direction of the less fortunate, so that they can have the same opportunities I did; and that I would like, for sentimental reasons, to channel my charity through a school I attended myself. My main choice would lie between my secondary school, a small, New England boarding school; my undergraduate school, a public university in the UK; and my graduate school, a large, ivy-league, research-oriented university in America. Which is the most worthy recipient?

My secondary school started its indoctrination early, and has invested diligently in fund raising. We were told throughout our years there how important it was to give, no matter how small the donation. The development office carefully tracks my whereabouts. Their mailings asking for donations have always managed to find me, despite several years in Europe and never once updating contact details.

I do see my secondary school as a worthwhile cause. Contrary to the perception of wealthy elitism, the boarding schools of the American northeast provide many academic scholarships and an excellent education. Scholarship students in my class went on to great success and now give back to the communities from which they came. Supporting such an institution seems to be an efficient and effective way to do good.

My British university invites me to wonderful parties, but asks for nothing. Reflecting the traditional British reliance on state funding, this university's endowment, though the third highest in the UK, is smaller than that of my American secondary school. The development office faces challenges, among them the British cultural taboo against asking too directly for money. Students, once turned alumni, do not expect to be giving back.

From my undergraduate days I remember buildings in disrepair, cheerful but poorly paid professors, and limited access to good journals. I value the education I received, and I know how much better it might have been with more resources.

My ivy-league graduate school was much wealthier, though still poorer than its American peers. I had access to the best resources and the best professors in my field. I received a fellowship as a graduate student that yielded a scholarship and a meagre income.

Top American universities engage in an arms-race for star professors and graduate students funded by endowments. My graduate school might seem to have least use for my small donation—but, on the other hand, the return to me would be most obvious. Donations enhance the university's ability to compete, raising the prestige of the institution, and increasing the value of my degree.

In sum, I find each school worth supporting. But, as a small donor, how I can make the greatest impact? Is it better to give $100 to each, or $300 to one?

You might say it makes no difference. You don't cover much of a scholarship for $300, any more than you do for $100.

But it does make a difference, and there is a clear answer. I should give something to each school. Because the fact of my giving may be worth as much, if not more, than the amount that I give.

A good development office tries to foster a sense of competition amongst classes. Donating any amount counts as "participation", and higher participation rates are flaunted to other classes to stir their generosity.

Wealthier donors can be prevailed upon to match donations of younger donors, sometimes contingent on participation levels. My $100 donation may bring in $50 or $100 in matching money—and perhaps more still, if it moves another donor to act.

I may not be rich, but I can flatter myself that I am serious and thoughtful, and recognised as such. On that basis, my gift of even $100 can help signal to others, including others with more means, that the cause is worthwhile—and, that the reputational rewards from giving are worthwhile too.