Just as University officials begin to strategize for raising what would presumably amount to hundreds of millions of alumni dollars to help pay for two new residential colleges, a report released Wednesday said Yale failed to keep pace with many of its peers in terms of fundraising last year.
Yale fell from third to eighth place in dollars raised by universities in fiscal 2007 compared to 2006, according to a national survey by the Council for Aid to Education, although University President Richard Levin — and even the survey’s director — cautioned against drawing too many conclusions from year-to-year variation in the rankings. Stanford University topped the list, netting $832 million last year, more than double what Yale raised.
Nationwide, charitable contributions to colleges increased 6.3 percent, hitting a record $29.75 billion. But the $391 million Yale raised was almost 10 percent less than the amount the University received in donations the previous year, according to the survey.
That may seem to be a bad sign for Development Office officials hoping to raise millions for the new colleges in coming years, especially as the struggling economy threatens to tamp down donations. But survey director Ann Kaplan said, since they are more a function of the timing of gifts than declining alumni support, it is important to interpret the results in proper context.
“These numbers are not a very accurate gauge of how we are doing,” Levin wrote in an e-mail Wednesday.
The University is in the midst of its Yale Tomorrow capital campaign, which was publicly launched in September 2006 and aims to raise $3 billion by mid-2011. As of Jan. 31, the campaign had already netted $2.045 billion toward that goal, putting it a full year ahead of schedule in its fundraising, Vice President for Development Inge Reichenbach said Wednesday.
“So, we are not concerned,” Levin said. “We are well ahead of the projections for the campaign.”
Most large gifts are paid over the course of five years, Levin added, so a more telling figure is the amount in new gifts and pledges received in a year — counted as “fundraising activity” — rather than the dollar figure actually paid to Yale. Over the last three years, the University has exceeded $500 million annually in fundraising activity, “with neither an upward or downward trend,” Levin said.
The University is on track to exceed $500 million in activity this year, too, he added.
This projection is why Yale officials warned against reading too much into the survey. Over the last three years, Yale’s ranking has swung from 11th to third to eighth, even as the fundraising activity cited by Levin has remained stable.
Kaplan agreed with the University officials’ resistance toward focusing on the ranks.
“If you went from third to 30th, then there’s something going on there,” she said.
More interesting, perhaps, is what the survey will look like next year. With the sagging economy, universities might seem likely to struggle in continuing to raise record-breaking amounts of money, as was the case this year.
One effect of the economic slowdown, Kaplan said, is that benefactors who plan to donate stock at the end of this fiscal year could decide to postpone their donations until future years when the market rebounds — or, if they do donate now, the stock they give could be worth less than initially anticipated.
Still, she predicted that over the course of fiscal 2008, universities will post an overall increase in fundraising — though probably at a rate less than the 6.3 percent enjoyed last year.
Rae Goldsmith, a vice president at the Council for Advancement and Support of Education in Washington, D.C., agreed with Kaplan’s prediction of smaller but positive growth.
“Post-9/11, when we saw an economic downturn, we did see giving stabilize or even drop a little bit,” Goldsmith said. “So there is a cyclical nature to how these numbers relate to what’s going on economically. Typically, a small recession is not going to have a significant impact, but a major recession could.”
Reichenbach remained undeterred. “So far, we have not seen a slowdown in giving,” she said.
In this fiscal year, the S&P 500 has plummeted 9.5 percent. But Yale’s fundraising has actually soared, she said; the $344 million raised this fiscal year through January was a nearly 14 percent improvement over the $303 million raised at the same point last year.
Regardless of what the economy has in store for Yale and other universities, in 2007, America’s wealthiest universities hardly struggled to line their gilded coffers with new donations.
Overall, American universities raised more money than ever before. And the $7.7 billion raised by the 20 most prolific institutions last year accounted for a quarter of all contributions to universities last year, despite the fact the 20 schools made up only 2 percent of respondents to the survey.
That may be good news for the universities, but it does not necessarily come at a convenient time. In recent months, top universities like Yale, Harvard and Stanford have been assailed by critics, including some in Congress, for allegedly hoarding their riches while families struggle to pay tuition.
Stanford’s placement at the top of the rankings was a repeat performance as the university, which launched an ambitious new financial aid initiative Wednesday, has finished first in the survey for the past three years. Stanford’s relative success, Reichenbach said, comes from a number of factors, among them their investment in fundraising in recent years; their large alumni base; and their close ties with Silicon Valley, which has produced much wealth in the last decade.
Harvard, at $614 million, finished second in this year’s survey, followed by the University of Southern California at third with $470 million. Rounding out the top 10 were Johns Hopkins University, Columbia University, Cornell University, the University of Pennsylvania, Yale, Duke University and the University of California, Los Angeles.
The Yale Corporation will vote Friday to authorize Levin to direct the Development Office in preparing a strategy for raising funds to underwrite the construction of two new residential colleges, which Levin endorsed Monday. Preliminary projections placed the cost of those two colleges at no less than $600 million.