As Financial Crisis Strikes Big Donors, It May Further Delay Capital Campaign

Harvard fundraisers are closely monitoring the impact of the financial crisis on donations as they prepare for a capital campaign with a tentative launch of 2011, Vice President for Alumni Affairs and Development Tamara E. Rogers ’74 said in an interview Friday.

The long-delayed campaign—once slated for a 2006 or 2007 launch—could be pushed back further if the ongoing crisis causes University fundraising to falter, Rogers said.

“We will continue to plan a campaign with a possible launch date of 2011,” Rogers said. “That date isn’t set into stone because so much depends on what happens right now.”

Earlier plans for a capital campaign were delayed amid controversy over remarks of then-University President Lawrence H. Summers about women in science and pushed back further due to his resignation in 2006 and the period of interim leadership that followed.

Harvard’s last campaign, completed in 1999, reaped $2.6 billion ($3.2 billion in today’s dollars), then the largest total in the history of higher education.

The return of permanent leadership last fall with the installation of University President Drew G. Faust gave hope that the capital campaign would finally get off the ground.

But now, Rogers said, Harvard is closely watching the markets and gauging impact on its donors to see whether a 2011 launch still “feels realistic.”

“We are accustomed to cycles,” Rogers said when asked about the impact of the financial crisis on Harvard fundraising. “But this is actually unprecedented, we have not seen something quite so widespread and uncertain, so the answer is I actually do not know.”

She added that Harvard could be more affected because it “has been very well represented in the financial services industry,” though she said she did not know the percentage of alumni working in that sector.

Following a year-long slump, financial markets have nose-dived in recent weeks as a series of financial shocks have hit Wall Street, including the failure of Lehman Brothers, the government takeover of mortgage giants Fannie Mae and Freddie Mac, the largest government bailout to date, an $85-billion loan to the American Insurance Group, and most recently, the failure Washington Mutual and its subsequent takeover by federal officials in the largest bank failure in U.S. history.

Amid concern that the crisis could prompt a severe recession if left unchecked, Congress is preparing to pass an unprecedented $700 billion bailout plan intended to bolster confidence in faltering U.S. financial institutions.

As the crisis continues, Rogers said, alumni are still trying to assess the impact of recent events.

“They are mostly saying now, ‘Wow, this is unprecedented,’ and are reluctant to prognosticate,” she said.

Although financial markets have stagnated for over a year, Harvard has not experienced a drop in fundraising. The University recently announced its second-largest fundraising total in history for the year ending June 30, though Rogers noted there tends to be a delay between economic turmoil and effects on philanthropy.

Across the country, other universities are grappling with the question of how this crisis will impact fundraising, said Elizabeth Crabtree, president of the Association of Professional Researchers for Advancement.

“We’re all trying to answer that question right now for our individual institutions,” said Crabtree, who is also director for prospect development at Brown.

But Crabtree expressed optimism about long-term prospects for fundraising in higher education.

“I have done a lot of studies over 40-60 years of giving,” Crabtree said. “One of the things that is absolutely true is that philanthropy in the U.S. is incredibly resilient.”

Still, she said, schools could begin to see donors shy away from multi-year gifts or request more time to meet their pledges in the face of economic uncertainty.

Crabtree said she didn’t expect many changes in strategy for university fundraisers, though she cautioned some tweaks might be necessary.

“If you’re planning an event at Lehman Brothers,” she said, “you might not be doing that right now.”

—Staff writer Clifford M. Marks can be reached at cmarks@fas.harvard.edu.