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Harvard may reorient its long-term fundraising strategy to focus more attention on unrestricted funds rather than earmarked gifts, University President Drew G. Faust said in an interview last week, giving voice to a policy that has become increasingly important in the midst of the recent economic downturn.
Confronted with harsher financial realities over the past year, University officials repeatedly stressed the importance of raising flexible, current use funds in order to support key priorities, such as financial aid.
And in light of the positive donor response, Faust said that the University’s call for unrestricted giving may evolve into a permanent strategy.
“Harvard even in good times hasn’t put enough emphasis on unrestricted giving,” Faust said. “Our donors tended to want to endow particular activities—it’s just how the process was structured as it evolved.”
Unrestricted funds raised over the past year have been used to support various initiatives including classroom reconstruction at the Graduate School of Education, new scientific equipment for the Molecular Cellular Biology Department to further human genetics research, and financial aid at the Kennedy School.
The University’s chief fundraiser Tamara E. Rogers ’74 said yesterday that though Harvard had already begun focusing fundraising efforts on current use money before the recession, market pressures gave these concerted efforts “extra impetus” and direction, most notably in the Faculty of Arts and Sciences.
FAS posted a 38 percent increase in unrestricted gift receipts available for immediate use—from $24 million to $33 million—over the past fiscal year ending June 30, 2009.
In contrast, fundraising levels across the University fell by 8 percent over the last year, a result Rogers attributed to the global economic crisis and described as “inevitably disappointing, but not surprising.”
Rogers said that she believed Harvard’s donor base understands the importance of flexible funds to support “critical priorities,” thereby rendering such a strategy sustainable in the long run.
“Our donors are sophisticated philanthropists,” Rogers said.
But some alumni may harbor an inherent suspicion of supplementing a pool of unrestricted University money—a “slush fund,” as Mark A. Hissey ’84 called it in an interview this spring.
“They want their money to go to things that they really cared about,” Hissey said, defending donor prerogative in the allocation of funds, even in the context of a donor base that viewed Harvard as “very responsible” with its use of resources.
In addition, a strategy that emphasizes unrestricted gifts may not have staying power in the long-run, philanthropy expert Kathleen D. McCarthy said, given that soliciting unrestricted or current use funds tends to be more difficult when the urgency of raising money to maintain core activities dissipates.
“It might be a harder thing to pitch when the economy improves,” said McCarthy, director at the CUNY Center for the Study of Philanthropy. “In flush times, you’re going to have more people who want to leave their own personal stamp on the gift.”
—Staff writer Athena Y. Jiang can be reached at email@example.com.
—Staff writer June Q. Wu can be reached at firstname.lastname@example.org.
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