MOTHER HUBBARD'S DOG

To the Editors of The Crimson:

The Crimson story speculating that "private support may drop by $30 million" this year needs to be put in further perspective.

Such a drop is not impossible, but nearly so. Certainly no one expects anything like it at this point.

Foundations are cutting back, but some of that has already happened. Further, a large portion of their funding is committed over a number of years which will sustain current levels of support, admittedly at the expense of new commitments. Corporations with continuing high earnings despite the state of their stock have shown no signs of reducing their contributions.

While current discussions in Congress do not improve the psychological climate for giving, there is no present reason to believe that federal tax legislation is going to change actual incentives for donating to higher education this year, although next year and the years beyond pose a substantial, but presently unquantifiable hazard.

The stock market is, of course, a real problem. At the time of a comparably deep descent in 1970, however, there was no drop in current giving. Rather, it stayed almost stable instead of producing its normal growth.

It should be noted that a substantial drop in private giving poses divided threats to the University budgets, only one immediate and the other long term. Over the years, private giving has been rather evenly divided between gifts for current use and gifts to capital (long term endowment), and the former tends to suffer less in a bad market than the latter. It was endowment giving which actually dropped significantly in the last market plunge.

Nonetheless, this market is worse, and we do have to be concerned. A sharp reduction in specific gifts for current use (the Harvard College and professional school funds and foundation gifts the most important among them) would have a disproportionate negative effect on our immediate budgets. Over decades, in good markets and bad, we have an opportunity to average out (and increase) gifts to permanent endowment.

All in all, a drop of $10 million in 1974-75 from budgeted estimates overall or a drop of $5 million in gifts for current use would be a real shock and problem enough without considering the horror of an overall thirty million dollar drop.

But the problem in the story is that by overstating a problem, it may give the problem less credibility than it deserves to have. Mother Hubbard's dog is hungry but not yet a wolf. Hale Champion   Financial Vice President   Chase N. Peterson, M.D.   Vice President for Alumni Affairs   and Development