Harvard College Fund Budget Is Likely to Come up Short

In the budget letter he sent Faculty members last week, Dean Rosovsky called the Harvard College Fund "the crucial variable" in the Faculty's income next year.

But if the current status of that crucial variable is any indication, the Faculty's budget for this year and next year may be even more deficit-ridden than Rosovsky's letter indicates.

The Faculty makes up its annual budgets each spring from predictions of the amounts of its various incomes and expenditures; last spring the Fund predicted that this year it would take in $4 million in unrestricted income, slightly more than a tenth of the Faculty's unrestricted budget.

It is surprising that the $4 million figure made its way into this year's Faculty budget, given the Fund's performance last year.

The Fund predicted in the spring of 1973 that it would make $4.1 million in the following academic year, then proceeded to fall short of its estimate by a whopping 16 per cent, making only $3.4 million.

It now seems clear that the Fund will not make as much again this year as is predicted.

"It looks like they're on a trajectory that indicates if they equalled last year's performance they'd be doing fairly well," Robert E. Kaufmann '62, assistant dean of the Faculty for financial affairs, said yesterday.

Kaufmann said the Fund's budgeted figure for this year was "probably unrealistic" and blamed it on a lack of information last spring on how poorly the Fund was actually doing last year.

Peter F. Clifton '49, director of the Fund, said yesterday the Fund makes a great deal of money in December and would not speculate on whether the Fund will meet its income projection for this year.

Clifton, who began directing the Fund over the summer when its budget was already formulated, said the Fund's staff will "work harder" this year to meet its 16-per-cent projected increase in income.

He said the Fund's agents in major cities will start soliciting alumni contributions by telephone in January, three months earlier than they began telephone solicitations last year.

The Fund also has more than $2 million in outstanding pledges that Clifton said he hopes to collect this year.

However, the economic incentives for alumni to pay up on their contributions are not great this year because of the state of the stock market.

People who are making money on the stock market have to pay tax on their profits if they sell their stock. If, on the other hand, investors donate their profitable stocks to non-profit institutions like Harvard, their profits are not taxed and they can claim deductions on their own income tax.

But if investors' stocks are not making money, there is no tax incentive for them to give the stocks to Harvard.

The Faculty's estimate for the Fund's income next year is not yet final and is expressed in Rosovsky's letter only as a range between $3.5 and $4.5 million.

Assuming it will be a struggle this year to equal last year's $3.4-million figure, during the following year the Fund's income could well fall below even the Faculty's most pessimistic minimal estimate--and raise the spiralling deficit even higher than this year's