(FORTUNE Magazine) – Charitable giving is a lot like investing: you want to put your money where it can make the most of itself. That's precisely the problem with my alumni contribution. Yale has done so well with its own money that I'm no longer convinced it needs mine. Maybe I was looking for an excuse to cut Yale off, because my daughter didn't get in. But with a $4.86 billion endowment--up from $2.5 billion just six commencements ago--you have to wonder whether Yale is any more of a charity case than Bill Gates.

If Yale were a mutual fund, I'd be a buyer. A dollar invested there has returned 15% compounded since the early 1980s, and 16.7% in the 1990s. The manager has been nothing short of brilliant. His recent one-year gain--$1 billion--was bigger than Yale's entire endowment in 1982. But that's the paradox: The better the manager does, the less persuasive the requests for further assistance. This is also true of other status colleges and related nonprofits enriched in this bull market.

When it comes to attracting donors, status colleges have a big advantage over the ballet or heart disease, which most people don't get involved with until they're older. At Yale, they sign you up for a lifetime pledge before you graduate. At first, you think it's just the alumni fund, until you get a letter from the class gift fund. There, if you don't contribute, you feel as if you're letting down old chums, especially after you see their notes scrawled at the bottom of past-due notices. Fall further behind, and your phone number is turned over to undergraduate telemarketers.

I had brought my pledges up to date around my 25th reunion in 1992. The combination of old Whiffenpoof songs, alcohol, and the yearning for lost youth was a powerful donation enhancer. Also, by that time my daughter had decided to apply. Nobody has ever suggested that the finance office shares the donor records with the admissions office, but just to be sure, a parent tries to stay out of charitable arrears until the verdict comes down.

At our reunion dinner, it was announced that the class gift ($3.5 million) got a $10 million upgrade from Ed Bass of the Texas Bass clan. It was then I began to ask myself, What's the significance of my contribution, four decimal points to the left of Ed's? Three years later, in 1995, Ed's brother Lee gave another $20 million, but after months of hemming and hawing over details, Yale sent Lee's money back. I took this as solid evidence that Yale already had more money than it knew what to do with.

During this period, Yale went public with an ambitious plan to fix the buildings and give the gargoyles a face-lift--the perfect chance to put some of its recent windfall to work. Instead, it launched a $1.5 billion renovation campaign and asked the alumni to give once again. Alumni wallets are for touching; endowments are for growing.

The school's annual expenses are just shy of $960 million--for professors, erasers, food, snow removal, the works. Meanwhile, it brings in $950 million from tuition, government grants, etc., plus the annual 4% to 5% it extracts from the endowment for a living allowance. Yale says its budget will be balanced in 1997 and beyond.

If the endowment continues to compound at the present rate, the school will be sitting on a $25 billion nest egg by 2010. Or maybe the manager isn't always this brilliant, and the endowment compounds at 10%. In that case, the nest egg will be $13 billion, but what good will it do if nobody can hatch it?

Clearly, it's in Yale's best interest to save for a rainy day, which is how it defends the continuous hoarding and dunning in the face of its present prosperity. Calamities may occur, such as high inflation, depression, a revolt against high tuition, or large numbers of students abandoning the Ivy League for the Internet. Then the extra cash might come in handy, but how many rainy decades should the alumni be expected to underwrite with donations that could be going to equally worthy but less prosperous causes?

The Chronicle of Higher Education has identified 17 colleges whose combined endowments ($44.7 billion) are greater than the combined endowments of 422 other schools. Talk about billionaires hogging the wealth--the billionaire colleges have captured half. Education is like baseball, with a few rich teams hogging the spoils and the all-star talent. Is this the sign of a healthy sport?