Radcliffe, Inc.

In many ways, Radcliffe disappeared in 1977.

Presidents Bok and Horner that year signed an agreement giving Harvard the tuition money and the responsibility for educating undergraduates. This ended Radcliffe's 98-year history as a private women's college with close historical ties to Harvard, whose students paid it tuition and got a Radcliffe diploma.

In the new Harvard-Radcliffe structure, Radcliffe students, who had gradually won many Harvard privileges over the two preceding decades, officially became Harvard students too. Gender-blind dormitories, admissions, and instruction were now the norm.

What remains of Radcliffe today, then, boils down to its money, its 38 buildings, its bureaucracy and several women's studies programs, institutions and fellowships. Its identity endures in the way it manages these corporate affairs--particularly in overseeing its $54,339,000 endowment and raising funds from its pre-1976 alumnae.

Like most organizations of its size and wealth, Radcliffe uses outside managers to invest its money. With direction from a trustees' investment policy committee, which meets nine times a year, the four managers specialize in fixed-income investments, growth stocks, blue-chip stocks and other special investments.

Although Radcliffe is less embroiled in the South African divestiture controversy than Harvard, the women's college has taken ethical concerns to heart in the investment of its $51 million (excluding property) endowment.

Radcliffe's investment in companies who do business in the apartheid regieme amounts to only 2 percent of its endowment, a tiny fraction compared to the 19 percent of Harvard's $2.3 billion endowment. Radcliffe Treasurer Louis Morrell estimates that Radcliffe has a total of $1 million invested in companies operating in South Africa, including Baxter Travenol, Eastman Kodak, and Schlumberger.

"We spent a lot of time on South Africa last year," says Morrell, pointing to a lengthy ethics report that the Radcliffe Advisory Committee on Investor Responsibility submitted last year to the executive board of the Radcliffe trustees, which must approve all investment decisions.

The Advisory Committee, formed three years ago to research the ethics of companies in which Radcliffe owns stock, does not make investment or divestment recommendations. A separate Investment Policy Committee oversees where the endowment goes.

Instead, the Advisory Committee develops long-term policies for voting on shareholder resolutions, says Karen M. Morrinsey '85 of Dunster House, the undergraduate member of the six-person trustee committee.

"When the committee abstains or votes against a company because it hasn't kept its word or has violated the Sullivan Principles, we submit a letter to the executive committee of the Board of Trustees," explains Massachusetts Supreme Court. Associate Justice Ruth I. Abrams '53, the committee's chairman. And while the committee does not necessarily have the final say on how the trustees will vote on a particular resolution. "They haven't rejected one of our letters yet," she adds.

This year the committee will turn its attention to issues of companies who manufacture nuclear weapons, committee members say, although the they will do the bulk of their work in the spring when prosy resolution votes are mailed to shareholders.

Harvard has its own 12-member Advisory Committee on Shareholder Responsibility (ACSR) which serves basically the same role as Radcliffe's advisory committee. Although South Africa-related questions make up-only a small portion of the issues addressed by the ACSR, they have attracted the most attention.

Last spring, for the first time ever, a plurality of the ACSR--which is made up of four students, four faculty and four alumni voted to call on Harvard to divest its stock in companies which to business in South Africa. However President Bok and the four members of the governing Corporation's Committee on Sharcholder Responsibility prepared reports this fall attacking divestiture and defending Harvard's position of "constructive engagement." According to that theory, the best way to fight against the racist apartheid system is through pushing American companies--through proxies and "intensive dialogue"--to improve opportunities for Blacks.

Radcliffe's endowment has increased about $20 million in the last 10 years, but it has moved in large swings according to the tickle winds of the stock market. For example, the fund rose 50 percent during the bull market of 1982-3 but slipped 3 percent the very next fiscal year.

That heady up and down movement creates headaches, Morrell says, because the trustees count on spending a certain percentage of the total endowment each year--lately 7 percent. If the account grows by more than that figure, Radcliffe is safe. But if the endowment grows less than 7 percent or even falls--as it did during the most recent year--the college must eat into the principal of the account.

Harvard's endowment is about 46 times larger than Radcliffe's and accordingly. Harvard has much more complex investment strategy. While Radcliffe pays four outside managers in New York, Boston and San Francisco to keep its coffers full, Harvard sports a 70-member, in-house investment stall of its own, the Harvard Management Company. Under the leadership of Walter M. Cabot '55, president of the company since it was formed in 1974, Harvard constantly shills its $2.3 billion among stocks, bonds and other investments.

With a yearly budget of about $6 million, the management company costs Harvard substantially less than an outside investment service. And it has generally kept up with or surpassed the overall performance of stock and and bond markets. In 1982-3, the management company scored $700 million in gains for Harvard, but last year it lost $100 million.

In fundraising Radcliffe also maintains independence from Harvard. The Radcliffe College Fund annually solicits some 11,500 Radcliffe alumnae through the class of 1975. Last year it brought in close to $1 million in unrestricted funds, says Director of Development and Alumnae Affairs Cecily O. Morse '62.

For alumni after the classes of 1976--the first year that Radcliffe students received a significant part of financial aid awards from Harvard--the colleges established the Harvard-Radcliffe Fund Office, a joint fundraising office under one director. Doris S. Cochran-Fikes. The Holyoke Center office solicits both men and women graduates since 1976, and the money goes into a joint pot. A certain part--usually 10 to 15 percent--is credited to Radcliffe, which it in turn hands over to Harvard for women's financial aid. In 1984 this sum totaled $1.4 million, roughly 60 percent of Radcliffe's gift income. Under a joint agreement, the dollar sum increases by six percent each year.

To meet this annual financial aid obligation, Radcliffe first uses funds restricted for scholarship use (like Radcliffe's percentage of the Harvard-Radcliffe Fund) and then dips into the Annual Fund to make up the difference. At most one-third of the Fund's donations go for financial aid.

The remaining two-thirds goes "wherever" we need it." Morse says, adding that Radcliffe tries to use extra money to start new women's programs. Surprisingly, much of the money used to support existing programs like the Bunting institute and the Radcliffe Seminars comes from donors who never went to Radcliffe-Morse estimates that as much as 25 percent of Radcliffe's 8000 donors are not alumnae.

The joint fund drive last year raised roughly $89,000. Of that total, Radcliffe was credited with $8600, or 9.7 percent, corresponding to the percentage of the total financial aid awards to women in the class of 1988, Cochran Likes said.

Regional Harvard Radcliffe club benefits, local alumnae fund drives and private benefits brought in an additional $100,000 last year. These smaller fundraisers, coupled with the annual drives and unsolicited donations, pushed Radcliffe's gifts and grants income over $2.5 million mark last year.

Radcliffe also maintains a five year Century Fund, which at its close in December 1983, had raised $10 million. A lot of this money paid for construction of the Quadrangle Recreation and Athletic Center.

Morse says the tenor of the Radcliffe Fund's pitch to alumnae is adamant, that "a Harvard education is not perfect, and women need to have more of a part of it." She adds that Radcliffe is "the only part of the University that is really focusing on women that's not a criticism of Harvard, but we do have a vested interest in women.

"We are quite invested in the idea that the world and education are for men and taught by men," she adds, explaining why the annual pitch to alumnae begins by reminding them that "Women are first and foremost at the college [Radcliffe]."

But more than two thirds of Radcliffe's $30 million annual budget goes straight to Harvard, to cover women's tuition, room and board, and financial aid. Although Harvard reserves a portion of the room and board money for the Radcliffe-owned Quadrangle Houses, Radcliffe still has final approval on capital improvements that cost more than $100,000, each as the upcoming renovation of North, Cabot and Currier Houses.

In addition to the money budgeted to pay for women's education. Radcliffe gives Harvard rent-free use of its buildings.

The $5 million remaining is channeled back into Radcliffe to support its administrative staff, fundraising efforts, 38 buildings, and assorted program and facilities.

For example, the college boasts the foremost women's studies resource in the country--the Schlesinger Library on the History of Women in America, as well as the Bunting Institute, one of the nation's four largest post-doctoral programs.

In addition, the college runs a Radcliffe Seminars program, a Career Services office, the Murr., Center for women's research, and other smaller programs.