A ‘Philanthropic Pivot’ at California Lutheran

​When Steven Dorfman moved into a retirement village across the street from California Lutheran University, he’d never heard of the small California institution.

“I wandered across the street to find out what was going on and found out it was an interesting, good liberal arts school with a very strong school of management,” he said.

Dorfman, a former executive at Hughes Electronics Corporation, eventually pledged $6 million to the university for a new school of management building. The 2018 gift was an expression of his longtime interest in and support for higher education. He'd previously served as the Jerome C. Hunsaker Visiting Professor of Aerospace Systems at the Massachusetts Institute of Technology, and his daughter is an English professor at Allegheny College in Pennsylvania.

California Lutheran fast-tracked the project and planned to finish construction in 2021. Then the pandemic hit, and Dorfman had to decide whether to wait years to see the results of his gift, or spend it on something else. The university had already received $1.2 million of the $6 million pledge for the school of management building, but Dorfman chose to redirect the remaining $4.8 million toward student merit scholarships, entrepreneurship grants and an endowed professorship. Rerouting an already pledged gift is unusual, experts say, but California Lutheran hopes to use Dorfman’s decision as an example for other large donors whose ideal philanthropic outcomes might not be possible for the university to fulfill.

A portion of his donation, $1.2 million, will go toward renewable merit scholarships for the top percentile of students admitted to the school of management. The gift will cover most or all tuition for about eight students, said Lori Varlotta, president of California Lutheran. 

“Mr. Dorfman is very interested in using this money to attract the most promising business students out there,” Varlotta said. “He wants this to be a magnet for top performers.”

Varlotta said $3.6 million is slated to fund entrepreneurship grants for California Lutheran students and alumni, weekend start-up events for students, and the university’s New Venture Fair. It will also pay for an endowed professor of practice in entrepreneurship. Mike Panesis, director of what will become the Steven Dorfman Center for Innovation and Entrepreneurship, will be the first to hold the new position, according to a press release.

California Lutheran is “on the move,” Varlotta said. Enrollment has grown consistently over the past decade. The university has added, on average, nearly 100 full-time undergraduates to its ranks each year since 2009. The pandemic has slowed that trend; enrollment dropped to 2,804 this academic year from 3,078 in 2019-20.

The student body is also becoming increasingly diverse. California Lutheran is a Hispanic-serving institution, a federal designation for nonprofit colleges where at least one-quarter of full-time students are Hispanic. More than a third of California Lutheran students are Hispanic or Latino, 41 percent are white, 7 percent report two or more races, 4 percent are Black or African American and 5 percent are Asian.

Varlotta said the university began a period of growth and expansion at the start of the 21st century and used that momentum to create a short construction timeline for the planned school of management building.

“The university had so much good news propelling it forward that they created an extraordinary ambitious timeline,” she said. “The pledge came in 2018, and they actually thought at that point that they could finish the construction in the fall of 2021.”

Then the COVID-19 pandemic was declared last spring, and California Lutheran, like most colleges in the United States, was forced to close its campus. The university slowly reopened this fall, first offering all virtual courses and allowing a limited number of students on campus and later holding a handful of in-person classes. The university altered its instruction formats and safety protocols throughout the year as it followed ever-changing guidance from the state of California.

As the university reoriented its financial priorities, the timeline for Dorfman’s school of management building stretched on. At age 85, he worried he would not see the results of his philanthropy.

“It looked like the completion of the building was receding into the indefinite future,” Dorfman said. “I wanted to realize the benefits while I was still alive.”

At the same time, California Lutheran was looking for ways to financially support students more directly during the pandemic. Dorfman met with Gerhard Apfelthaler, dean of the school of management, and Varlotta, who had just been appointed to the presidency. They decided to reroute Dorfman’s gift toward student merit scholarships, entrepreneurship grants and an endowed professorship. Dorfman called this decision a philanthropic pivot.

“It was really great that Mr. Dorfman was willing to put his initial hopes and dreams about a glamorous project aside and to support the things that universities should prioritize most,” Varlotta said.

The university will continue to move ahead with the construction of the school of management building, but university leaders will instead ask local business partners to fund the project, which no longer has a target completion date.

Varlotta said university officials hope to work with other large donors in the future to direct gifts to student support programs.

“There is a plan going forward for donors that had originally anticipated a gift to go to X -- often a capital project -- might be repurposed for the more pressing needs of college affordability and the college experience right now,” she said.

Gifts are more likely to be earmarked for new purposes when circumstances change, said Amir Pasic, dean of the Lilly Family School of Philanthropy at Indiana University-Purdue University Indianapolis.

“Obviously, the pandemic is a huge change of circumstance,” Pasic said. “I think people have become much more conscious of the fact that students need help.”

The pandemic has raised donor awareness about student financial needs, Pasic said. Nationwide protests last summer against police brutality and in support of racial justice and economic equity also spurred conversations about educational access and student support, especially for nonwhite students and students from lower socioeconomic backgrounds.

Traditionally, large unrestricted gifts are less common than donations earmarked for capital improvement projects, endowed funds or other projects decided by the donor. But last year, colleges received several high-profile gifts for student aid. MacKenzie Scott, a philanthropist and novelist, gave more than $4 billion to 384 organizations, including 35 tribal and historically Black colleges. Reed Hastings, the co-founder and CEO of Netflix, and his wife, Patty Quillin, a philanthropist, pledged $120 million to be split between Spelman College, Morehouse College and the United Negro College Fund.

As for Dorfman, the gift to California Lutheran is likely not his last.

“My daughter was a good adviser, because at my age she’s going to be my heir,” he said. “She’s been a helpful adviser to me on how to proceed down this path, and I may do some more stuff for other schools.”