Economic Downturn Threatenes Fundraising Future

As a recession tightens its grip on New England, the University's long-awaited multi-billion dollar fundraising effort faces a future marked with uncertainty.

At one time primed to kick off next fall, the fund drive was pushed back a year, primarily due to the ongoing search for a new president. Now, worsening economic conditions throughout the nation threaten to further delay the fund drive.

According to one Harvard administrator, who requested anonymity, an extended recession would make an already ambitious undertaking--higher education's largest ever--all the more difficult to achieve.

Yet Vice President for Finance Robert H. Scott says he thinks the economic malaise will have little effect on Harvard's proposed fundraising effort.

"Most fund drives have some great years and some less-great years," Scott says. In multi-year fundraising efforts, he says, the economy will have its ups and downs. The current economic problems may already be gone by the time Harvard embarks on its drive, Scott adds.

Still, some analysts say economic pressures, at least in the foreseeable future, are here to stay. At the New York-based Council for Aid to Education, which monitors higher education fundraising efforts, Vice President and Treasurer Robert M. Jordan says the small giver, in particular, may be discouraged by the recession.

"All other things being equal, people are feeling their jobs are at risk," Jordan says. "Yes, it does hurt."

But beyond individual responses, the recession will be less likely to affect the giving attitudes of the major capital funders, those who give in the millions of dollars, Jordan says.

Comparing Notes

Looking at other schools and their current campaigns, Scott says he is encouraged. For instance, the vice president says fundraising at his alma mater, the Massachusetts Institute of Technology (MIT), has not been stunted significantly by the economic environment.

MIT, Scott notes, announced its fund drive on the day the stock market crashed in 1987, and "they have done very well" in their efforts.

"I think that's the most dramatic example there is," Scott says. MIT is $556 million along the way to their goal of $700 million, according to Glenn P. Strekle, vice president and treasurer for the school.

And at Cornell, where a $1.25 billion campaign was launched last October, fundraising officer David R. Dunlop agrees with Scott's assessments.

"We launched our campaign realizing that the economy was not strong," Dunlop says. "In any six or seven-year cycle there are going to be economic upturns and downturns."

The five-year Cornell effort, currently standing at $424 million, is "a little bit ahead of schedule," Dunlop says.

Negative Effects of the Recession

Although the Cornell campaign is moving forward successfully, Dunlop acknowledges the recession's pull.

"There are some people who are having to postpone their [giving] decisions," he says. This situation is particularly prevalent among those donors whose jobs are most affected by an unstable economy, he adds.

The sentiment that giving will be harmed by the recession is also evident at Brown University, which will soon be launching a $400 million campaign.

"When there is economic uncertainty, as there is at the moment, that is not a good climate for giving," says Sam F. Babbit, senior vice president for development at Brown.

In addition, Babbit says, the recession may force the university to tighten its budget. Just this fall, in fact, Harvard's Faculty of Arts and Sciences, citing economic malaise, decided to trim its budget by up to 6 percent in many departments.

"I think Brown and everybody else... will have to restrict their programs," Babbit says.

As at Cornell, fundraisers at the University of Pennsylvania say their campaign has yet to suffer greatly from the recession's blows. "We haven't detected any slowdown in giving because of the economy or the war so far," says Frederick C. Nahm, Penn's vice president for development and university relations.

But despite continuity, Nahm says the numbers of long-term givers have declined somewhat, a condition which he attributes to present economic uncertainties. And Nahm predicts that if the recession continues, there will be a more significant impact.

Given the inflation that often accompanies a prolonged tightened economy, Nahm says, wavering givers may be less likely to contribute.

In the period between 1974 and 1975--years marked by a recession and high inflation rates--higher education was critically hampered in its funding efforts, Nahm says.

Although many fundraisers across the nation all say their campaigns are going well, one Harvard administrator says Columbia University has not fared so well under the economic strain.

Columbia, he says, is having "major difficulties" in its recently-begun fund drive.

But Fred Knubel, Columbia's director of public information, says his figures do not indicate such a problem. As of December, the school's progress was very encouraging for the five-year, $1.15 billion campaign, he says.

Some development officers nationwide say that the war in the Gulf may also have a negative impact on fundraising efforts. Harvard's Scott, however, downplayed that concern.

"I don't think the war is a factor of any kind, in anything," Scott says.

But at the other universities already amid mammoth campaign efforts, the war is a more immediate threat. "I can't imagine there being a positive effect from the war," Dunlop says, speaking of Cornell's drive.

Dunlop says the war can evoke in people a heartfelt concern for humanity, and that "it's hard to focus on other values that enrich life," such as education. For this reason, he says, potential givers may ignore the needs of higher education.

Strekle of MIT says, "I don't know anybody who thinks the war has helped."

At Brown, Babbit says he is unsure about what the effect of the war might be. He points to the improved stock market as a short-term positive result, but his greatest concern is how the conflict might affect the economy in the long run.