With ambitious Science Hill plans, college renovations and an expected boost in the financial aid budget to match Princeton’s new no-loan policy, the University will find itself spending hundreds of millions of dollars, shaving the top off an endowment unlikely to experience the extraordinary growth rates of the past five years. But officials announced a clever and aggressive way to keep money flowing into Yale’s coffers. Creating an incentive for prospective donors, Yale has adopted a policy now in place at Harvard and Stanford which allows alumni to lump their future charitable donations to their alma mater and to other institutions into one tax-exempt contribution.
Donors relinquish total control to Yale, but retain a say in how money is distributed. The University will even manage donations to other institutions as long as more than 50 percent goes to Yale. But the money will remain in the University’s hands, meaning more total assets that can yield higher returns for the endowment. That kind of flexible fundraising is smart planning as the development office looks ahead to a gloomy market.