The Fund Falls Behind

In his annual budget letter in November, Dean Rosovsky called the Harvard College Fund "the crucial variable" in the Faculty's income for next year.

But the Fund does not look like a safe place to rest the Faculty's financial hopes for the time being.

The Fund's troubles are directly recession-related, and they hurt the Faculty's ability to gather crucial unrestricted funds.

It gets its money from alumni, in cash or, frequently, in stocks, and its cash problems are obvious: with the recession, alumni have less money to give to Harvard. But the stock market plays a part in the Fund's woes as well.

When the market is up, alumni can donate profitable stocks to Harvard and use the profits as tax write-offs because they are gifts to a non-profit institutions. When the market is down, however, as it was most of this year, people who give stocks to the Fund are doing so on a pure loss basis.

Thus the Fund has had a problem of getting pledges of stock contributions from alumni who then delay paying up in hopes that their pledged stocks will turn a profit and help them out on their income tax.

The Fund usually takes in from $3 to $4 million a year, making up about a tenth of the Faculty's unrestricted budget; this year, its staff started to work early and concentrated on soliciting in key cities and collecting the millions of dollars in uncollected pledges in an effort to raise more money.

The recent upturn in the market is a hopeful sign, and this week should be a very good one for the Fund. But after falling 16 per cent short of its estimated income last year, the Fund still has a great deal of ground to make up.

The Fund's problems are not Harvard's worst financial headaches--foundations and the government, certainly, bring in more money. But the fact that it, along with everything else, has been drying up of late shows the depth of the financial crisis even alumni are giving less to Harvard.