Peterson says his primary concern is ensuring that gifts to the University are sufficient to "make sure this place doesn't atrophy." There is less concentrated inherited wealth than in the past, he says, but there is still plenty of "new wealth"--wealth that Harvard must find new ways to tap.
When you think of a Harvard fundraising drive, you usually envision a group of wealthy alumni gathered in a major northeastern city, smoking cigars, sipping Chivas and signing checks for enormous sums of money with dramatic flourishes of their gold fountain pens. While this image may have been partially accurate in the past, current fundraising efforts are increasingly diverse and complex, involving not only alumni but major corporations and occasionally foreign sources.
Dr. Chase N. Peterson '52, vice president of alumni affairs and development, oversees the fundraising aspect of Harvard's finances. Peterson, who left his medical practice to become Harvard's dean of admissions before joining the Development Office in 1972, says that although he is involved in fundraising efforts for numerous special projects, his primary concern is ensuring that gifts to the University are sufficient to "make sure that this place doesn't atrophy." Peterson says there is less concentrated inherited wealth than in the past, but there is still plenty of "new wealth,"--wealth that Harvard must find ways to tap. Although the University continues to rely heavily on concentrated giving--in a typical drive 10 per cent of the donors contribute 90 per cent of the money--Peterson says Harvard is attempting to create a "broader network of alumni, friends, informal, and formal contacts."
Last year, the Harvard College Fund initiated the area class agent plan as a part of this effort. The Fund, which is part of the budget of the Faculty of Arts and Sciences rather than a branch of the Development Office, previously had class representatives in only eight major cities. The rest of the country was divided into more than 450 separate regions, with an agent responsible for contacting all the alumni in the region regardless of their College Class. The new plan divides the country into 14 regions, with a representative from each Class in each area. Alumni are therefore contacted by a member of their own class, adding a more personal element to the drive. Peter F. Clifton '49, executive director of the Fund, says the new approach has proved very successful. Last year the Fund raised $5.45 million, exceeding both 1975's total of $4.85 million and its goal of $5.25 million. Clifton says this year's drive is "in pretty good shape--we're already $500,000 ahead of last year."
All the money the fund raises goes directly into student-oriented activities. Clifton says over 50 per cent of the money goeas into scholarship funds, while the rest helps finance House activities including the salaries of senior tutors, athletic programs and other student activities such as the Loeb.
The Fund is particularly important as a "make it or break it" component in the Faculty budget, and has been a key factor in reducing the Faculty's deficit from $2 million in 1975-75 to $249,000 in 1975-76, Dean Rosovsky says. Some College financial officers have said they are dissatisfied that the College must rely so heavily on such an uncertain source of income, but for now, the Fund forms a rather major part of the Faculty budget.
Peterson must raise money to meet current costs as well as funds to cover long range construction and special projects throughout the University. Unlike many other schools such as Princeton, Yale and Cornell Universities, Harvard does not run a single major fund-raising drive lasting several years. Instead, Harvard conducts an ongoing series of mini-drives, focusing on special projects like the athletics complex, the Kennedy School and the Center for Earth and Planetary Physics.
Although two consulting firms are presently studying the feasability of switching to one consolidated drive, Peterson says he doubts the University will make the change. Harvard raises as much money or more than other universities, "without making a lot of noise about announcing a five year $300 million drive. We just go on as we are." Through the Development Office and its mini-drives, Harvard raised an average of approximately $54.2 million annually in each of the last ten years, an amount slightly greater than those other schools raise in their major drives.
Fluctuations in the national economy and the stock market naturally affect giving to Harvard. "Bad times dry up sources of money and frighten people," Peterson says. But he adds that an efficient fundraising system should be able to overcome these trends. With the right "psychological" as well as economic strategy, Harvard can "largely ignore economic fluctuation. We plan in the good times so that we can survive the bad," he says.
Although most grants that come from neither government or foundation sources are given by alumni or other private individuals, corporations also contribute a substantial amount. In four of the past five years, corporations contributed approximately $6 to $7 million annually. The exception was 1973-74, when a $2.5 million gift from several Japanese corporations to the East Asian studies program boosted the total to $9.4 million.
Although corporations, like individuals, can take a tax deduction on their gifts, "nobody makes money on a gift," Peterson says. He feels corporations have the same basic motives for giving that individuals do. While the individual may be concerned with "doing something immortal" for the alma mater, Peterson says that if corporations are going to exercise power, giving money to an educational institution is certainly a "benign" way to do so. Corporations may feel "obligated to support institutions which provide them with technology and people."
Peterson says he does not believe the University compromises itself in its dealings with corporations such as Continental Oil who endowed a $1 million chair at the Business School, or foreign countries such as Korea. "Buying off doesn't happen. Donors have no power to appoint a professor, to tell him what to study, what to publish," he says. Once they make a gift, although the University is obligated both "morally and legally" to adhere strictly to its terms, it is final. "They can't get their money back," he points out.
Gifts or financial arrangements with foreign countries have sometimes come under particular scrutiny, but Peterson says that as long as Harvard is not restricted, the benefits usually outweigh the drawbacks. He compares these grants with the situation a black student sometimes faces. "Shouldn't he take a fellowship to finance his education even if the money originally came from a fortune originating from slave exploitation?" he asks. Peterson believes he should.
In 1975, the Korean Traders Association (KTA) gave Harvard $1 million for East Asian Studies. Peterson says the money is needed if Americans are to lessen their "ignorance" about East Asian culture and he stresses that there are "no strings attached" to the grant, adding that if he were not confident of this, he would oppose the gift. The KTA is not part of the Korean government, he says, but an organization like the Chamber of Commerce. Besides which, as long as there are no restrictions, Peterson says he'd "take money from (Korean President) Park himself."
But Gregory Henderson '44, an associate professor at the Fletcher School or Law and Diplomacy at Tufts University and an expert in Korean affairs, says it would be naive to think there is no Korean government involvement in the grant. Although Henderson doesn't believe Harvard should reject the grant, he says, "all Koreans engaging in international trade must belong to the KTA. To belong, they must be cleared by the Korean CIA... The KTA is, in every but the most purely formal sense, an agency of the Korean government."