Some people are undoubtedly deluded enough to think that donating big bucks to their alma mater will mean an automatic "in" for their kids (in reality, legacy acceptances are a lot less common, as schools get stricter about their merit-based admission standards), but their gifts shouldn't detract from the meaningful donations. There are actually a lot of great reasons to give to your alma mater. A lot of universities (even the seemingly rich ones) do need the money. Even schools with big endowments are struggling to fund programs that benefit students (because a lot of that $ is restricted and/or goes towards paying off the university's debt). Schools need more unrestricted gifts (of all amounts) to offer, most importantly, scholarships to students who wouldn't otherwise be able to attend the college of their choice.

I agree. I go to a school with a high tuition price, and others tend to assume that it means everyone at my school has piles of money sitting around. One of the best pieces of advice I received when applying to college was to not be scared off by 'sticker price' because most people don't pay that anyway. Higher tuition and letting x number of students in because their parents donated money allows schools to turn tuition into a sliding scale, with more money available so everyone can pay what they can afford to pay.