Beginning next fiscal year, should a Yale donor give $1,000 to one of the 18 alumni sports associations, just $880 of that sum will directly fund the team that the association supports.
On July 1, 2012, the Provost’s Office began to extend its indirect cost recovery policy, which charges a 12 percent administrative fee to all gifts not restricted for capital projects or endowment funds, to all departments, including athletics. Officials planned to implement the change using a three-year transitional period in which there was no fee in 2012–13, a 6 percent charge in 2013–14 and the full 12 percent assessment in 2014–15. But according to Jim Millar, a member of the Yale Crew Association and president of the Yale Sports Federation, the University is now applying the 6 percent charge for two years, concluding this July, when the charge will increase to the 12 percent target. Millar, however, did not know the exact timing of the implementation, and University administrators declined to comment on the specific timeline of Yale’s gift giving policy.
“About four years ago, [University officials] reaffirmed that the long-standing policy regarding an assessment for indirect costs for expendable gifts should be applied in a fair and consistent way,” Deputy Provost for Academic Resources Lloyd Suttle wrote in an email. “Other than [assuring] that this policy is being applied across all schools and departments of the University, there is little I could or would wish to add.”
Annual giving from these associations is one of three methods by which teams receive funds for their operating expenses. Endowment returns, which are not charged an assessment, and institutional support from the University are the other two elements of team funding, according to Millar.
According to a letter that Director of Athletics Tom Beckett sent to athletics alumni in October of 2013, the rationale for implementing this 12 percent assessment on athletic donations was to ensure that the administrative costs necessary to sustain the full functioning of the University, such as support services, facilities maintenance and business operations, could be met.
Beckett’s letter noted that in the past, most gifts to athletics and a few other departments had been exempted from this “cost recovery policy.” As a result, the University planned to phase in the assessment over three years, which would allow departments sufficient time to adjust their long-range financial plans and ensure the policy is understood by donors, he stated.
Despite this explanation, an alumnus of the University, who wished to remain anonymous, expressed confusion about the reasoning for the charge. He noted that a smaller fee might be reasonable, but that 12 percent is excessive.
“This whole thing has a bizarre feel to it,” the alumnus said. “How do you get to 12 percent? No one has presented any justification for it.”
The increasing assessment comes at a time in which, according to Millar, alumni associations are currently looking to ramp up fundraising to wean their associated teams off their reliance on institutional support. This resilience in the face of fluctuations in other cash flows is indeed the rationale offered by Yale Athletics for donations: According to the 2013 Plan for Athletic Excellence, donating to athletic programs and helping to create team endowments helps athletic programs “thrive regardless of the economic climate.”
Each year, the president of each alumni association meets with the athletics department in order to set a target amount of fundraising for the year. These target amounts are based on history of support, size of the association, the program’s needs and the timing of other fundraising initiatives, said Alison Cole ’99, director of athletics development.
While Millar said that the Yale Crew Association’s targets for annual giving have been rising each year to move toward the goal of eliminating dependency on institutional funding, it has not seen a significant increase in its fundraising goals since the beginning of the assessment policy change, despite the reductions in amount received from donations through these administrative fees.
“The crews’ target amounts had large increases back in 2010-12 and have not increased significantly since then,” Millar said in an email.
Though a smaller proportion of a donation is now directly financing team expenses, Cole said, the assessment has done little to discourage giving to Yale athletics, or to keep team associations from reaching their target amounts each year.
Cole deferred all comments on the implementation of the assessment to the Provost’s Office, while Beckett was unavailable for comment. Cole did highlight a successful year in athletics fundraising as evidence that the existing assessment has not hampered donors’ willingness to give.
“Last year, we broke our annual fundraising record, with many associations seeing their all-time best numbers to date,” Cole said. “The assessment has not impacted our associations’ ability to meet their fundraising goals each year. I believe we are transparent with our alumni and they understand why the assessment is necessary. [We] partner with Yale to make sure that together we provide the best possible experience for Yale student-athletes.”
Yale spent close to $17.5 million on athletic teams in the 2014 fiscal year.