St. Clair County Promise
Posted on March 4, 2008 by Randy Maiers
The final tally for total charitable giving in the U.S. last year isn’t available yet; however the numbers are likely to be around the $300 billion dollar level that Americans gave in 2006. Of that total amount, various religious organizations receive approximately 32% which is by far the single largest category of giving.
In second place again will likely be education, which in 2006 received about 13.9% or a bit over $29 billion in total gifts. With that kind of giving it’s easy to understand how many people question why the cost of a college degree keeps rising at rates far greater than inflation. The endowment at the University of Michigan was just over $7 billion at the end of last June, and while it’s the largest university endowment in Michigan, its far from the largest university endowment in the country.
While a lot of people, and I’m sure many readers of this Savvy magazine, continue to donate regularly to their alma mater which in many ways does in fact support education, a small group of families in Kalamazoo took a different approach. They wanted a greater and more measurable impact on their giving while simultaneously supporting education and economic development. Perhaps you’ve heard of their program? It’s the Kalamazoo Promise.
While we don’t know the names of the anonymous families that created the Kalamazoo Promise, what we do know is that students living within the borders of the Kalamazoo public schools are eligible for a complete, four-year scholarship to the college or university in Michigan of their choice. Estimates put the endowment at about $500 million which could provide annual payouts of somewhere between $20 million to $27 million to cover the costs of all of those full scholarships. Seems like a small chuck of change compared to the U of M endowment, but it’s impact has already been felt within Kalamazoo Schools and the City of Kalamazoo itself.
The purpose of this article though isn’t to report with envy on the status of the Kalamazoo Promise or what it means to economic development efforts on that side of the state. The purpose of this article is to ask, “What would it take to create our own version called the St. Clair County Promise”?
Perhaps it won’t surprise you to know that this very topic has been discussed at several meetings around town over the course of the last year. And it isn’t just people representing the philanthropic or education sector that are asking the question either. Organizations who strive to promote business and economic development also see value in a more highly education community along with the draw of a free college degree.
Throughout Michigan I’m aware of five or six other counties that are also exploring their own versions of the Kalamazoo Promise. None are likely to reach the scale of Kalamazoo, but many are promising, if smaller, in their own right.
In St. Clair County the discussions so far have been centered around the premise of guaranteeing at least an associate’s degree at St. Clair County Community College. What size endowment would it take to guarantee that every graduating high school senior could get an associates degree for free? Perhaps not as large as you might think.
Unlike the terms and conditions of the Kalamazoo Promise, a St. Clair County Promise could use its funds as “last dollars in.” That means students who are eligible for other sources of financial aid, such as federal or state programs, or even other local scholarship programs, would be required to use those funds first. That would leave a much more manageable number of students needing what would amount to approximately a $2,500 scholarship per year for two years.
An endowment of $25 million dedicated to the St. Clair County Promise could provide full tuition scholarships to approximately 500 students annually. Considering that a little less than 600 graduating high school seniors annually enroll at SC4, these projected numbers make a St. Clair County Promise at least feasible.
How could this community get to a $25 million endowment? Not through dinners or golf outings certainly. Yet it is an achievable number. Scholarships are the fastest growing program at the Community Foundation of St. Clair County, and we’ve never really made a concentrated effort to develop those funds. How many of you expect to have more than $1 million of net assets available through your estate? More than you might think. Do you value education? Do you value this community? Don’t be surprised if you start hearing more about a St. Clair County Promise in the near future.
