Ever since tight finances prompted administrators to cut back on academic prizes in 2010, Yale has discouraged the creation of new prizes.

When the onset of the recession in 2008 tore a $350 million hole in Yale’s operating budget, administrators sought many ways to close the gap, including a decision to cap most prizes at $1,000 and channel the excess funds toward the general operating budget primarily for financial aid purposes. Though at the time, the prize cap announcement elicited outcry from students and faculty members alike, administrators and professors interviewed said the caps have not been lifted since and added that Yale continues to discourage donors from establishing new prizes.

“In a time of financial stringency, [prizes are] not the most effective way to use that money,” University President Richard Levin told the News. He added that administrators have “discouraged” the creation of new prizes because “in general, we have an awful lot of them.”

Associate Vice President for Development Eugénie Gentry said the Development Office seeks donor support based on priorities set by the Provost’s Office, and Deputy Provost Lloyd Suttle said the creation of new prizes is not a priority at this time.

“Yale’s fundraising priorities focus on supporting current programs, especially financial aid, not establishing new ones,” Suttle said. He added that he does not know of any plans to review or revise the cap in the near future.

Levin said that even before the cap, Yale had never solicited prize money, which donors had generally volunteered to give. He added that Yale’s policy toward prize money changed in 2010 when administrators told the Development Office to “discourage those gifts and put them in financial aid rather than single out specific students.”

In the months following the institution of the cap, some departments wrote letters to the Provost’s and Secretary’s offices, appealing the decision to slim down their prize budgets and arguing for the preservation of particular prizes that were going to be slashed or cut entirely. But Suttle said the prize cap was generally “enforced uniformly.”

Though not significantly impacted by the prize cap, the Economics Department has actively encouraged potential donors to support student research rather than establish new prizes since the cap’s implementation, said Benjamin Polak, who served as the department’s chair before his appointment as provost last month.

Polak said the cap hit older, humanities-oriented departments harder because they have accumulated the largest prizes. He added that the cap has been contentious because the prizes carry great significance in these departments’ cultures, and the larger prizes used to help students pay for graduate school or jump-start their careers.

“We lost, and the prizes are all capped,” English professor and the department’s Prizes Committee Chair Margaret Homans said in an email last week.

Still, professors were able to convince administrators to spare a handful of prizes that the policy had previously marked for elimination or significant reduction.

Linda Peterson, former chair of the English Department Prizes Committee, said she and Department Chair Michael Warner examined the state of every English prize after the cap. Through discussions with the Provost’s Office, they managed to save at least one prize that was “going to be either eliminated or made entirely honorific,” she said.

Math Department chair Yair Minsky said his department successfully appealed to reinstate some funding for the John Alan Lewis Prize. The name of the prize has been changed to the John Alan Lewis Summer Research Fellowship, but it is now worth close to $3,000, Minsky said in a Monday email.

But eventually, inflation will cause the reduced prizes to decline even further in value, Peterson said. She said she has heard no discussions about the implications of the cap five or 10 years from now when prizes of $1,000 will be worth less, though Polak said he is “pretty sure” that the Provost’s and Secretary’s offices will need to adjust the cap for inflation.

Administrators have also restricted the formerly common practice of splitting large prizes between students, professors said. Before the cap, the English Department had split some of the larger prize funds between five or six students each year, Peterson said, but Stefanie Markovits, another former chair of the English Prizes Committee, said the Provost’s and Secretary’s offices now “actually discourages” the department from splitting up individual prizes.

The DeForest Prize for senior math majors, an award that had increased in value to more than $23,000, used to be spread among 10 to 12 students before the cap, mathematics professor Roger Howe told the News in 2010. It was adjusted to give $1,000 each to two seniors after the cap, he said.

“The ground rule now is one winner per prize,” Peterson said. “You can understand the logic — if the prize language says ‘to the best senior’ or ‘for the best freshman composition,’ it shouldn’t be given to five people.”

Many of Yale’s older prizes, some of which were given as early as the mid-1800s, started out small but ballooned over the years because they were invested alongside the Yale endowment. In 2009, the total value of the Mathematics Department’s prize funds exceeded $70,000, Howe told the News in 2010. After the prize cap, the department awarded only $6,000, he said.

Suttle said prizes were reduced in March 2010 after administrators reviewed each prize’s indenture — a legal document in which a donor specifies how the money can be used. That spring, then-Connecticut Attorney General Richard Blumenthal investigated Yale’s handling of its donations. Suttle said the prize cap policy was “reviewed and approved by the Attorney General’s Office.”

Markovits said the English Department has gradually adjusted to the cap.

“I’m hoping that we will be able to continue to give out the prize money we were able to preserve when the budget cuts were made,” she said. “We’re optimistic that we’ve reached a new normal that will be preserved.”

Thirty-nine students received prizes from the English Department in spring 2012.