The Prize-Winning Proposal
GREATER opportunity for the further training of its high-school graduates seems to be the most imperative need of a city of a hundred thousand population already possessed of good schools, parks, playgrounds, swimming pools, golf courses, and an art gallery, but no college. A million dollars will not build, equip, and endow a local college, but it will underwrite a plan which will afford, to the local high-school graduates of the benefactor’s city, college opportunities elsewhere in the state greater than those they now enjoy.
To this end, then, let the benefactor cause to be incorporated under the laws of his state a non-profit organization without shares of capital stock, to be known as The College Savings Trust Fund Association. The charter should provide that the benefactor be the chairman of the board for life, and that the board be self-perpetuating. The benefactor should then make a declaration of trust in accordance with which he turns over to the association the million dollars he desires to dedicate to the welfare of his fellow townsmen.
The declaration of trust should contain the following provisions: —
1. That the benefactor reserve the right to revoke the trust at will.
2. That the association through its board of directors manage the trust estate and receive the income therefrom.
3. That the first claim against the income be an amount adequate to maintain the benefactor in his accustomed manner and to meet the special demands which business success begets.
4. That the remainder of the income, but none of the principal, be used to promote among the citizens of the benefactor’s city systematic saving for the college education of their children.
Through the machinery thus set up the association should accept a limited number of members upon application and upon a showing of worthiness and by virtue of a declaration of trust also on their part. The declaration of each member should contain the following provisions: —
1. That the association be the trustee.
2. That the child in whose behalf the saving is to be undertaken be the beneficiary.
3. That the member reserve the right to revoke the trust and that he grant the association the right to terminate it; in either case the member to receive in cash or in par value of United States Government bonds, at the option of the association, an amount equal to, but not greater than, the sum of deposits made.
4. That the member deposit ten dollars a month and no more, until the beneficiary enters college, but no lump sum in excess of sixty dollars and then only in case of delinquency deemed by the board to be unavoidable.
5. That to each ten dollars deposited by the member, and in consideration thereof, the association add ten dollars from trust fund income, but not from principal, and with these funds build up a deposit to the credit of the association at each of a selected group of colleges in the benefactor’s state, the size of the deposit so built up at each college to bear an appropriate relationship to the number of students from the benefactor’s city who have been accustomed to attend it, or are likely to do so.
6. That upon the entrance of the beneficiary in any one of the colleges so named the association establish a credit at the college in favor of the member equal to twice the amount saved by him during the saving period named in the trust agreement.
7. That the association authorize the college to pay the beneficiary’s tuition fees, laboratory fees, for his books, board, and room rent, and charge the cost against the credit so created, but that it direct the college to make no advances in cash unless specifically authorized by the board to do so.
8. That the association purchase group life insurance on the life of the member in an amount equal to twice his prospective savings, the association to be the beneficiary under the policy and in case of the death of the member, the beneficiary under the declaration of trust by the member to receive all the benefits which under the trust the beneficiary would have received had the member lived.
9. That the association deposit a stated amount per month with each of the local hospitals, or with any of them, under an agreement that they will furnish hospitalization, but not private medical attention, to the member or his beneficiary when requested by the board to do so.
A brief in behalf of this plan would recite the following advantages: —
1. The benefactor retains potential control of his estate, for he can revoke the trust. He can exercise as much actual control as he wishes, for he is chairman of the board of the association.
2. He retires from active business, but devotes his latter years to the welfare of young people. This is the best possible substitute for family ties.
3. He diverts income from the accretion of capital, of which he has no further need, and directs it toward a philanthropic purpose. He thus prolongs his feeling of current accomplishment.
4. He has a chance to try out his plan. If it does not meet with the popular response anticipated, he can modify it, or even abandon it altogether while he is yet alive, and formulate another.
5. The opportunities under the plan are open to many who are willing to earn its advantages, but to none who look upon the benefactor’s philanthropy as a chance to get something for nothing.
6. The group life insurance feature underwrites the purpose of the members, and the hospital arrangement is a health and accident policy which protects the earnings out of which is created the corpus of the fund necessary to the attainment of the purpose.
7. The plan creates a system of floating scholarships which follow the students wherever they go to college, for the association can shift its deposits from college to college.
8. The plan endows both colleges and hospitals, for it puts them in continuous possession of an unexpended balance of the association.
9. The plan is sound economically, for it is in accord with the inexorable law that the most effective way for a group to get what it saves for is to set its savings to producing it.
10. The plan is sound financially, for a good college’s promise to pay off a deposit in educational opportunity, its stock in trade, is safer than an equally good and equally honest bank’s promise to pay off a deposit with money. A good college’s promise to pay in education is as much to be relied upon as a good farmer’s promise to pay in corn.