It's Not as Simple as It Looks

Keeping the Alma Mater In the Black

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."

Harvard also signed at least $1.5 million worth of contracts with the Iranian government since 1974. Harvard will help the Iranians with several urban development, health and educational projects. Critics of the Iranian government cite repressive internal policies as a reason for careful consideration of any involvement cooperation or agreement with the Iranian government. Peterson, referring to a $400,000 contract to help plan a graduate research center in Iran, the only Iranian contract with which he has been involved, says the question is "not whether I approve of the government but whether this university project is possible, whether the project itself would benefit or harm the Iranian people, not necessarily the Iranian government." Peterson suggests that the university and the presence of Americans whose free speech will be ensured by the terms of the contract--the Americans' salaries are in escrow, and they will get the money no matter what they say--will further rather than harm the cause of free speech in Iran. The whole venture will help "open up the minds in the country," Peterson says.

Rosovsky says all unrestricted grants to the University--from individuals, corporations and foreign sources--are examined before the Harvard Corporation accepts them. Although Rosovsky would not give specific examples of cases where the University has rejected a grant, he says situations have arisen in the past where gifts were refused. A gift designed to propagate certain ideological viewpoints or from a country that discriminates against certain people would not be accepted, he says. It is for those reasons, for instance, that the University has decided to decline to work with projects in Saudi Arabia, where Jews are not admitted.

Fundraisers and development officers must deal with the effect of changes within the University as well. Clifton feels that Harvard's termination of Reserve Officers Training Corps (ROTC) program had a discernible effect on many alumni, particularly those from classes which served in either World War I or II.

Alumni who are veterans or who watched their classmates die in the war "feel very stongly about civilian influence on the military. They feel that without ROTC, Harvard cannot provide this," Clifton says. He adds, however, that these alumni were a minority and had little effect on overall fundraising. In addition, he says sometimes they decide to give to the Fund anyway when they learn that ROTC is available to Harvard students through cross-registration at Massachusetts Institute of Technology.

Changes in the format of Harvard Magazine, an alumni publication may also affect donations to the Fund, Clifton says. "Alumni need to feel they belong to a chronolgoical experience, not just four years," Peterson adds. The magazine will go free of charge to all alumni on alternate months. When the magazine does not publish, the Fund will send out a small pamphlet called Forum. Forum is not a fundraising appeal, he says, but a brief, more personal profile of a member of the faculty. Five or six times each year, the Fund will also send out a "flat, outright appeal," he says. Recent alumni surveys showed that 83 per cent of the alumni felt "quite favorable" about their experience here and only 5 or 6 per cent were "really anti-Harvard." But, Peterson says, the problem remains in getting many of these potential donors to give, even a small amount. Presently only about 32 per cent give to the Fund annually.

Gifts to the Fund range from $1 to $100,000, Clifton says. The largest gift given by a single living individual through the Development Office was between $10 and $15 million, Peterson, who did not have the exact figure, says. The donor wishes to remain anonymous, he adds. Several bequests in this range or even larger have been made in recent years, Peterson says, such as the Mallinckrodt gift which matures in 1984 at a value in the $20 million range.

Equal access admissions is unlikely to greatly effect fundraising, Peterson predicts. Clifton disagrees. Clifton is concerned with short term cash gifts more than long range investments or gifts for capital construction and his donors are primarily male Harvard graduates--Radcliffe has a separate alumnae fund. As more women enter the College, there will obviously be fewer men entering and thus fewer male alumni in the future to give to the fund. Clifton would like to see an additional House built in the College so that the school can accommodate more women without decreasing the number of men. But no alumni outrage against equal access has shown up in giving patterns. Although an occasional alumni writes an angry letter about how "Radcliffe is using up Harvard's" endowment, or that "Harvard is a men's school," Clifton says they are mostly "crazy stuff" and not representative of alumni sentiment. However, Susan F. Lyman '36, chairman of the Radcliffe Board of Trustees, said earlier this year that Radcliffe's $2 million drive for a scholarship fund fell $700,000 short of its goal, partially because of equal access.

Another way to minimize the drop in Harvard alumni giving could be to merge the Harvard and Radcliffe fundraising offices. Although Harvard and Radcliffe senior Classes gave a joint gift last year for the first time, creating the Harvard-Radcliffe Fund, and soliciting donation from over 40 per cent of the Class which will value $80,000 in four years. But Clifton does not foresee a merger of the Harvard and Radcliffe College Funds for "at least ten years, if then." This year's graduating Class will also give a joint gift and Clifton thinks the new Harvard-Radcliffe fund will continue to operate.

Peterson does not deal exclusively with Harvard graduates. Women's roles are changing: one cannot predict what the long range effect of this will be, he says. If alumnae revert to a traditional "nurturing" role, rather than going into business and other professions, they will have occupied spaces in the University which--from a fundraiser's point of view--would have been more financially lucrative for the University if they had gone to men. However, Peterson says he's "betting that women will be active in the business world. If we're wrong then we're reducing the number of people who can support Harvard to a critically low figure." He emphasized, however, that he did not anticipate that women would revert to their traditional roles, nor would he urge all Harvard alumni to go into work in corporations or other businesses that will provide high incomes, so they could give huge gifts to Harvard.

"We don't need everyone to be a future corporation leader," he says. As long as Harvard can get enough financial support to survive and grow, "we can enjoy the luxury" of seeing alumni in the non-corporate world, "who can go and write an esoteric book that will add a great deal to human knowledge but will never sell more than 20 copies."

Recruiting financial support from young alumni is another problem Clifton faces. In response to this difficulty, the Fund set up special councils, meeting in 14 major cities to meet with alumni from recent classes and find out how to reach them. Although Harvard fundraisers do not generally expect 20-year-olds who are in graduate or professional schools or paying off debts from college to give huge grants, they would like a better response from this group than they are presently getting. Part of the problem, Clifton believes, is that they "have an image of Harvard College Fund as a Fort Knox that has lots of money and does nothing with it." He hopes the Council program will show participants how gifts contribute to undergraduate life.

Fundraisers are optimistic about Harvard's financial future. Peterson says private educational insitutions are "a social experiment in many ways. I think it's an experiment that can continue to work." Last year, with increased giving and an improving national economy, the endowment reached a record value of approximately $1.4 billion. Maybe Peterson's optimistic forecasts will come true.CrimsonFung Lam