A couple of minutes before 9:00 a.m. on Sept. 30, an email was sent to nearly 300 Yale employees on the ninth floor of 157 Church St. The email was from their boss, Yale’s Vice President for Development Joan O’Neill. Expect another email shortly, it said, and expect big news.
At 9:01, University President Peter Salovey sent an email to all of Yale. It announced a $250 million donation. The gift, for the construction of two new residential colleges, came from mutual fund billionaire Charles Johnson ’54. It was the largest in Yale’s history.
Most of the development staff knew that a large gift was coming in — an approximation of the sum had been billed into last year’s financials. But they did not know the exact amount or name of the donor until the rest of the University did. Knowledge of the donation, which had been in the works since at least last winter, was restricted to a small group of development staff and high-level University administrators.
In fact, the gift was the project of one man in particular: former University President Richard Levin. Over the course of his tenure, Levin built a strong friendship with Johnson -— in part over their mutual support of the Johnson-owned San Francisco Giants — and helped solidify the billionaire’s commitment to giving to the University. Last Monday’s gift is the result of that relationship.
As president, Levin worked closely with many of Yale’s most generous donors as he spearheaded a university-wide push to further fill Yale’s coffers. During the 2011-2012 fiscal year, the development office brought in $543,905,260 in gifts — this year’s total, given a $250 million boost, will likely be far higher. Approximately 95 to 99 percent of this money comes from the top group of donors, said O’Neill. This cohort represents one to five percent of all who give.
Large gifts support some of the most vital aspects of Yale. The Yale Alumni Fund, an unrestricted pool from which the University can draw for whatever it needs, frequently underwrites financial aid, facilities renovation, teaching and research. Other donations, of which Johnson’s is a notable example, are given with specific intent, such as the renovation of Bass Library or the creation of academic programs like Grand Strategy.
The Levin administration convinced donors to part ways with $1 million, $5 million, or $100 million. But did all that money translate into undue influence?
Under Levin, the administration developed a strong base of alumni donors, with whom Yale’s senior administrators maintain relationships. In doing so, Yale has aligned donors’ visions to its own. And so, for the last 20 years, the answer was an unequivocal no.
157 Church, 105 Wall
Eli Yale. John Sterling. Edward Harkness. Paul Mellon. These names scaffold our lives here: we walk through, under and over them daily.
“If you think about the history of Yale, it’s always been this way, going back to Eli Yale himself, whether he classifies as a major donor or a principal donor or a cosmic donor” said Professor John Gaddis. “There’s always been this tradition of giving.”
Ed and Sid Bass. John and Susan Jackson. Stephen and Denise Adams. Whitney and Betty Macmillan. Edward Evans. Charles Johnson. They have not altered Yale in the way that those four Olympian donors did, when the institution was smaller, less complex and easier to redefine. But these more contemporary names frame our time at Yale as well.
No gift appears out of thin air — it has to be coaxed and shaped by the university. The development office is ultimately responsible. You can hear O’Neill’s conviction in Yale’s mission when she talks about the 26 years she’s spent at Yale. From her office on the ninth floor of 157 Church Street you can see the names: Harkness tower, chief amongst them.
O’Neill’s staff seeks to build relationships, the objectives of which are threefold: convince the donor to give as much as possible, convince the donor to put few restrictions on the funds and then convince them to come back, this time with an even larger check.
The office “tracks” about 300 donors. Most employees are responsible for a set group who give repeatedly and generously. But just how much is generous? The simple answer is $100,000. According to O’Neill, aside from reunion and annual giving, there is little organizational emphasis on seeking out gifts less than that.
Above that threshold, two major donation groups split the office: “major gifts” — up to $5 million — and “principal gifts” — where the sky’s the limit. Within each cohort, development staff work in geographic regions, although all the staff are based in New Haven. Each regional cohort is also assigned a small part of New York state, the source of a tremendous proportion of Yale’s donations.
O’Neill says that about 250 of the donors are considered “major” while 60 are “principal,” but the distinction is permeable. If the development staff member does a good job, a donor with enough resources will eventually make the jump from major to principal, in which case the staff member often stays with them.
“Could you see yourself doing something that would be truly transformational?” O’Neill said the development office asks its donors. “For some people our role is to help them see how they could do that.”
But for many of Yale’s most important donors, the office they interact with is not at 157 Church Street, but 105 Wall, Woodbridge Hall — the office of the president — Warner House or other administrative buildings across campus.
It is in relationships between Yale’s most generous donors and senior administrators that most large gifts are born. They originate in conversations over cocktails and dinner at alumni events, phone calls and one-on-one meetings.
“Typically, Peter or I or Mary talk to them,” Provost Benjamin Polak said. “We always ask what they’re interested in supporting and we’ll say the ideas we have and make it a conversation.”
But while the administration’s approach appears uniform from the outside, different administrators find themselves at different points on the development learning curve. Polak is a fast-talking Brit and, like Levin, a former chair of the economics department. Still, he admitted that fundraising can be difficult for him.
“Peter and Mary are both masterful at this and I’m still learning, and Development is teaching me,” Polak said. “They hold my hand a fair amount and teach me how to do things, give me pointers on what I did right and did wrong afterwards.”
Polak’s worry about this initial insecurity makes sense. In the long run, getting donations has everything to do with personal relationships.
Music School Dean Robert Blocker got to know Stephen and Denise Adams during his first year at Yale in 1995. In 2005, the couple anonymously gave $100 million to the School of Music, at the time the University’s largest-ever donation. Blocker said the idea for the donation grew slowly and with the help of a series of administrators.
“I’ve always felt that everyone at an institution is a development officer,” Blocker said. “We all have a stake in this that’s really important.”
These relationships with donors take place primarily with administrators. Professors, or those directly benefited by the money, work with the administration on what to do with a gift, but don’t know exactly how many shared cocktails it took to get there.
Professor John Gaddis, the co-director of the University’s Grand Strategy program, which was also supported by a gift from Johnson, couldn’t pin down the details of how exactly Levin got that gift.
“We only have the barest inkling of the work that goes on in that regard,” he said.
Did the Grand Strategists have a plan?
Another Johnson donation, given together with Nicholas Brady ’52, secured Grand Strategy’s future, but the program didn’t always have financial independence.
When Professor John Gaddis came to Yale in 1997, all he had was a quirky idea. He rallied professors Paul Kennedy and Charles Hill to help him build a class of students competitively culled from every corner of the University to study, and practice, the art of statecraft. It would run January to January and with a summer component.
Today, the prospect of a penniless Grand Strategy may seem silly. Few programs at Yale can rival the cultish devotion the course receives. No other class has attracted as much sustained national attention or fueled as widespread a copycat spree. Grand Strategy seems as firmly anchored in Yale’s collective psychic life as Freshman Screws and President Salovey’s moustache.
But what is now the class’s strength was orginally a bar to its continued stability. Grand Strategy is stubbornly interdisciplinary. Gaddis, Kennedy and Hill insisted on a broad focus, and defied the University’s practice of distributing funds by department.
“When there are ideas [like Grand Strategy] that are not confined to or based in an established department, then they have got to look for money, because the departments aren’t going to fund them,” professor Hill said. “They’re going to have to fund themselves.”
At first, the program had no endowment. According to professor Gaddis, start-up funds came largely from foundations. But Gaddis didn’t mind that the program started without the administration’s guiding hand.
Levin, he said, “never had a vision that said, ‘We will create a Grand Strategy program 10 years into my presidency.’ The vision was more to leave room for faculty to experiment, to keep an eye on collaborations that work and, where they have proven they can work, find ways to support them.”
World events threw that waiting period into fast-forward. Following the tragedy of 9/11, the need for international security and leadership programs like Grand Strategy fell into sharp relief.
The course instructors had originally planned to run the course every other year. But “the mood of the country, the intellectual scene, was such that we couldn’t not do it every year,” Hill said.
And, as its profile grew, many alumni began to perceive Grand Strategy as the revival of Old Blue values.
“We attracted the attention of old Yalies,” Kennedy said. “This had been what they studied in Yale in the thirties and forties, and had disappeared in favor of social studies and history-from-below … They saw this as a kind of resurrection.”
The program went down especially well with two Yale College alumni. One of them was Charles Johnson. The other, Nicholas Brady, had been Secretary of the Treasury under President Reagan. In 2006, the two made a combined donation of $17.5 million as a “wasting endowment” to finance the program — then in its sixth year — for an estimated 15 years to come.
The program’s three founders offer slightly different stories of how this gift was finessed. Together, their versions combine into a Russian doll of social connections, a sort of X-knows-Y-knows-Z. If we accept the metaphor, then one thing is clear: President Levin was the doll that held it all together.
“What happened is that President Levin very carefully watched what we were doing, without saying anything, and once he was satisfied that this had legs, then he began talking to donors without our knowledge,” Gaddis said. “We’d say, ‘Please, Rick, raise some money for us,’ and he’d just smile.”
Perhaps it’s fitting that, as in real-world diplomacy, the gift negotiations had multiple tracks. Levin may have been the only one talking money, but he wasn’t alone in the conversation. Professor Hill was acquainted with Brady from their time in government under the Reagan administration, when Hill was working in the State Department and Brady was running the Treasury. Hill told Brady about the Grand Strategy program, and Brady pulled in his old friend and golf buddy, Charles Johnson.
And then there’s another layer: former University Secretary Sam Chauncey ’57, a Yale legend credited with pulling the university through the mayhem of the 1970 New Haven Black Panther trials. Kennedy said it was Chauncey who sat in on the class and later infected Brady with his enthusiasm for the program. Now it is Brady, as one of the program’s benefactors, who sits in on the occasional Grand Strategy class.
But for all that investment, Hill said Johnson and Brady are “entirely hands off.” And Gaddis confirmed that when Brady handed over the check, he did so with only one condition: “Teach common sense.”
Courtship and quarrels
The university’s work bringing in major gifts has created successful programs and buildings, but when the few give so much, it’s easy to imagine them having undue control. It’s up to Yale’s administration to makes sure that gifts align more with Yale’s goals than the desires of potential donors.
Legal contracts and cocktail conversations aside, O’Neill said out-of-line priorities are unlikely to come up in the first place because most major donors attended Yale, and specifically Yale College, themselves. An alumnus of Yale College is far less likely to want to give $50 million for an undergraduate business program — well outside the university’s liberal arts ethos — than someone who did not spend four years in New Haven, O’Neill said. One with a several-year-long relationship to senior administrators would have an even better idea of what would be relevant.
“If you have no connection to the University but you’re tremendously wealthy and generous, it may take more time to figure out how Yale works,” O’Neill said. And these connections pay off: “We raise much more money from alumni than a lot of our peers.”
A more common challenge for the development office is ensuring that gifts conform not only to the University’s current priorities, but also to its future plans. Developing the direction for a gift is a constant back-and-forth — donors often want to see their money fund a particular thing, or aid in a particular university initiative. For Yale, though, the best donations are those with the least of these restrictions.
In the 19th century, donors endowed research on hot air balloons and professorships that focused on railroad engineering. Those funds, many of which have grown over the years, pose a major challenge to the University: how can a gift legally intended for a thing that is no longer relevant be used now? Polak says that lawyers can be creative — that gift for hot air balloons, for instance, might be used to study space travel.
An institution with the lifespan of Yale, 312 years this week, has to think about how it will fund itself not just now, but in some distant future. The Yale of 2113 will be fundamentally different, just as the Yales of 1913 or 1713 bear little resemblance to today’s university.
“We want the indentures to be written as broadly as possible. Suppose someone gave a gift in 1750. We want that gift to still be appropriate in 2013 and we want to describe the gift, particularly if it’s an endowment gift, so it can be relevant forever,” Polak said. “That’s a challenge.”
The university never wants to be stagnant, which has led to the recent creation of gifts with self-limiting mechanisms. The Brady-Johnson endowment for Grand Strategy, for instance, is wasting, meaning that it will draw down to zero over approximately 17 years. Because of budgeting, though, the fund will likely last for 24, according to Kennedy’s estimates.
By the time that endowment expires, Kennedy says, Brady, Johnson, Gaddis and himself will most likely be “pushing up daisies.” And, as Gaddis says, “it’s healthy for a program to reconsider itself every few years.”
By planning this way, the University won’t have to figure out what to do with an irrelevant gift 100 years from now, because the money will have long been spent. But the question of what is relevant sets off heated debate among Yale faculty.
Despite Levin’s 2000 commitment to invest $1 billion in Yale’s sciences, a large number of the science faculty feel ignored by the development process. Sidney Altman, a Nobel-prize laureate in Chemistry and former dean of Yale College, bemoaned the lack of attention his field receives from donors.
“Nobody’s raised any money for us for a long long time,” said Altman. He called the situation “hopeless” and believes that Salovey’s presidency will make no difference.
In an email to the University Monday, Polak announced plans to build a new biology building. But, the email said, he did not expect it to be gift-funded, which means the university must borrow to complete the project.
Some parts of the University may be wanting for funds, but the administration occasionally turns away gifts that just don’t work.
In 1995, then-president Levin returned a $20 million gift to Lee Bass, a relative of Ed and Sid Bass, four years after he gave it to Yale. The original intent of the gift had been to create an intensive one-year program in Western civilization, which at the time many compared to Directed Studies. For three years, the program’s creation moved slowly. But in late 1994, it looked as though the program was finally near realization.
And that’s where Yale and Bass hit a roadblock. Bass wanted to oversee which professors would teach in the program, a condition that then-University director of public information Gary Fryer called “simply unheard of” in the Yale Herald at the time. Discussions quickly broke down, and Levin sent Bass his check back.
The “Bass fiasco” as it came to be known, was a major embarrassment to the University only two years into Levin’s term, evidencing a failure in the development process. Nearly 20 years later, he says it is his single largest regret from his time at Yale.
“It worked its way to an endgame in which he made an unreasonable demand on us,” Levin said at the News’ 135th anniversary celebration in Apr. 2013. “I really screwed up there.”
A new sheriff in town
Over 20 years, former President Richard Levin built up an astounding series of relationships with donors. Yale has Levin to thank for gifts that expanded financial aid, renovated the University’s facilities and expanded its international presence. And Yale students, regardless of how they feel about the new colleges, can look to Levin as the source of the Johnson donation.
But University leadership has shifted. Levin, although he still has relations with donors, is now in a volunteer role and transferring his contacts over to Peter Salovey. Polak is now provost, and Dean Mary Miller’s term is nearing completion — whether she will stay on as Yale College Dean is uncertain.
Salovey has occupied his office in Woodbridge Hall since Jul. 1, but he has been focusing on fundraising since well before then. All of the senior administrators and deans interviewed for this article described the transition to Salovey as smooth. As provost, dean of the graduate school and dean of Yale College, Salovey gradually gained fundraising expertise. Levin groomed him for his new job over the last five years, and he no doubt picked up some of the former president’s talent.
Right now, O’Neill says, Salovey is spending time getting to know donors — a tough task given his commitment to being more visible on campus. He often leaves on Sunday night — when no one will miss him — for development trips to alumni across the country, returning to campus within a day.
When Levin came into office 20 years ago, relations with alumni could not have been much worse, and development suffered as a consequence. Over two decades, though, he reshaped University giving, which in turn allowed him to reshape Yale.
Unlike his predecessor, Salovey will inherit a stable Yale when he dons the President’s Collar on Sunday in Woolsey Hall. In the months and years to come, it seems unlikely that he will act much differently from Levin in the fundraising realm; Salovey is a student of Levin and Levin’s model works.
The ultimate question, then, is what he will do with all that money.