Last year, our foundation established what we called the President’s Strategic Fund at a small private university.

I wanted to understand what kept the president up at night. Was it a faculty appointment? A promising academic program? A recruitment opportunity that couldn’t wait until the next budget cycle?

The university was navigating a difficult enrollment environment. Some established programs were contracting, while others offered opportunities for growth. Leadership needed to respond quickly, but departmental budgets and approval processes didn’t always allow that.

So we made the grant unrestricted.

No advance proposals. No approval of individual expenditures. No instructions about which departments should receive support.

We wrote the check and stepped back.

Our only request was an analysis at the end of the fiscal year explaining how the money had been used and what the university had learned.

What happens when you remove the bureaucracy?

Opportunities rarely follow an organization’s budget calendar.

An outstanding faculty candidate becomes available. Student interest in a program increases. A recruitment campaign needs additional money just as prospective students are making enrollment decisions.

The president understood those competing demands better than we could from a foundation office.

He knew which departments needed an additional infusion of funding, which priorities could wait and when stability should take precedence over growth.

We wanted him to exercise that judgment without having to seek our permission.

The results surprised us

At the end of the fiscal year, the president shared his analysis.

One recruitment initiative particularly caught my attention. A relatively small additional investment allowed the university to continue a marketing campaign when its original budget was nearly exhausted.

According to the university’s report, the campaign helped attract additional students and generated substantial projected tuition revenue.

Other expenditures supported faculty recruitment, new academic programs and curriculum development.

Some investments produced measurable results quickly. Others would take years to demonstrate their full value.

A new professor might strengthen an academic department, develop courses or attract students over several enrollment cycles.

The report also revealed which opportunities the president had prioritized and which he had decided not to pursue.

That was particularly valuable. We weren’t simply learning where the money went. We were beginning to understand how leadership made decisions when resources were limited.

Accountability doesn’t require control

There’s an important distinction between unrestricted funding and funding without accountability.

We deliberately avoided requiring proposals or expenditure approvals throughout the year. Those requirements would have introduced delays and shifted decisions away from the university’s leadership.

But we did want to understand what happened.

Which opportunities had the funding made possible? Which investments had worked? What remained uncertain? And what could we learn before considering another commitment?

The year-end analysis provided that opportunity.

It also reminded us to distinguish projected revenue from actual financial returns. Additional tuition is encouraging, but educating additional students brings costs that must also be considered.

I didn’t expect every investment to succeed. I wanted the university to have the freedom to respond to opportunities and the willingness to examine the results.

Trust leadership, then learn together

This experience has reinforced something I believe donors should consider more often.

A restricted grant may be appropriate when a particular program needs defined support. But sometimes the greatest value comes from giving an experienced leader the ability to respond to circumstances that neither the organization nor its donors could have anticipated.

The President’s Strategic Fund allowed the university to move quickly, avoid unnecessary bureaucracy and allocate resources according to its changing needs.

And the president’s report gave us insight into the decisions we otherwise might never have understood.

For donors, the lesson is practical. Before attaching another set of restrictions to a grant, ask whether the organization’s leadership already knows where additional resources could make the greatest difference.

If you trust that leadership, consider providing flexible capital and agreeing on a reasonable period to review what was accomplished.