I’m probably not the best to ask, as I’ve only donated small amounts to where I went to university. For me, it‘s mostly emotional, in that I have really good memories of both my undergrad and graduate universities. I’ve mostly chosen to do so when there’s a particular program/initiative that I care about raising funds.

Universities essentially have trust funds - it's the money that alumni and others have given over the years to the university. The university then invests that money to grow but also uses it to finance things like financial aid.