Post-Summers, Large Gifts in Limbo

For $1 million, a donor can have his or her name attached to the new Laboratory for Integrated Science and Engineering building. Endowing the Northwest Science Building costs $5 million, and the south wing of the Center for Government and International Studies runs a benefactor $750,000.

The endowments on these soon-to-be Harvard landmarks have been shopped around for months, but in the wake of the resignations of University President Lawrence H. Summers and Dean of the Faculty William C. Kirby this spring, some people involved in fundraising at Harvard are worried that the buildings may remain unnamed a little longer.

Interviews with almost two dozen major donors and prominent alumni over the past two weeks suggest that the resignations and the resulting tumult in the University have slowed the momentum of Harvard’s fundraising machine, with some alums and administrators worrying that the instability at the top of the University has led to the delay or even the withdrawal of significant gifts that had been under discussion.

Those familiar with fundraising have indicated various reasons for donors’ hesitation to give what the University calls “transformational” gifts—an endowment of large magnitude, such as a building or other ambitious project—under the current interim administration.

Several suggested that the reluctance was merely a natural result of the transitional period following any major leader’s resignation. Other donors expressed great frustration over Summers’ ouster and reluctance to donate to a university where the faculty can seemingly force out a president.

Yet another camp of alumni, critics of Summers, suggested that his resignation could spark donations.

But to many donors who were excited by Summers’ agenda—a plan that includes a major expansion into Allston, a focus on undergraduate life and teaching, and an emphasis on research in the life sciences—the key question is whether his vision for the University will continue to influence its next leader.

Given the widely-held belief that the agenda of the president has become the agenda of the University, an overwhelming majority of donors and alums contacted by The Crimson say they believe that fundraising will not be affected in the long-term.

Harvard is an institution that transcends individuals, they say, and its fundraising effort—“a machine that’s such a well-oiled juggernaut,” in the words of one major donor—will not suffer despite the recent unrest.

LOST IN TRANSITION

Summers’ resignation in February means that the start of the University’s multi-billion-dollar capital campaign, slated to be the largest in the University’s history, awaits the selection of a permanent president to assuage donor uneasiness.

Campaigns are the University’s most powerful tool for raising large sums of money for capital expenditures at the University. The most recent capital campaign, which ended in 1999, raised $2.6 billion.

“As at most not-for-profit organizations, the very largest gifts are generally made when there is a senior leader in place,” writes Donella Rapier, the University’s vice president for alumni affairs and development, in an e-mail. “During periods of transition donors typically don’t think it’s the right moment to announce a very large commitment. As a result, some gift discussions that have been under way will likely require more time as a result of the leadership transition.”

Harvard Provost Steven E. Hyman, who has been criss-crossing the country fundraising on behalf of the University, echoes Rapier’s suggestion that leadership transitions are off-putting to donors.

“If you’re going to make a very large gift, you actually do want to know who the permanent president is. [Alums] say that, very directly, in a business-like way,” says Hyman, who has taken three trips to the West Coast recently and schmoozes alumni in New York almost every week. “Which is, ‘Keep talking to me, I’m very interested in what Harvard is doing, but I have to meet the new president, to make sure that that person enthusiastically supports the University’s agenda with respect to whatever the area of donation might be,’ which is a perfectly reasonable stance.”

Kenneth G. Bartels ’73, the president and CEO of Paxton Properties, a New York-based real estate investment firm, and the fundraising chairman for his Harvard graduating class, says that while he doesn’t think the recent turmoil will have a long-term negative impact on fundraising, he isn’t surprised at donors’ reluctance to give during the transition period.

“It would be completely inappropriate to continue a [capital] campaign before a new woman or man is in place as president,” Bartels says. “They have a definite part in shaping it, and it’s not surprising that this affects people’s decisions—no one was thinking otherwise.”

A ‘SHALLOW INSTITUTION’?

But for some donors outraged by what they perceive as Summers’ ouster, even the installation of a permanent president may not be enough to return them to the table.

Donor James B. Davis ’75, the founder of Practice Management Information Corporation, an independent publisher of medical coding and compliance products, wrote in an unpublished letter to The Crimson in February that Summers’ resignation was a “disgrace.”

“My estate plan had bequeathed several million dollars to Harvard,” he wrote. “Based upon what the faculty of Harvard has done to Mr. Summers, I have removed Harvard as a beneficiary of my estate. I am recommending the same to other friends and associates.”

“So the radical feminists and PC police win, and Harvard and its students lose,” he added. Similarly, Richard A. Holt ’64 wrote in another unpublished letter to the editor that he would no longer be donating to Harvard, protesting Summers’ ouster.

“The resignation of Dr. Summers indicates to me that Harvard has become a place where vigorous debate, examination of unpopular ideas, and critical thinking are less valued than political correctness, where courageous leadership is not to be preferred over extreme caution to avoid offending anyone,” he wrote. “So be it. Henceforth, when the alumni fund solicitors call, I shall not donate so much as a penny to this shallow institution.”

Lewis M. Schneider ’56 wrote to his classmates on an online forum on the Post.Harvard website that he was “furious” about the resignation. Schneider wrote that he will be making a token $1 contribution to his class reunion gift, and encouraged others to join him.

Byron R. Wien ’54, the chief investment strategist at Westport, Connecticut-based Pequot Capital who has served as a member of the executive committee of the Committee of University Resources (CUR), an advisory group of major alumni donors, says that he also refrained from donating this year as a result of the resignation.

“The fact that [Summers] is no longer there is discouraging to some,” says Wein, who has previously endowed a professorship at the Business School.

OUT OF THE WOODWORK

But Summers’ departure may serve as an inducement to other donors to open up their checkbooks.

Data released by the University in November of last year show that the alumni participation rate in the Harvard College Fund reached a 16-year low of 40 percent.

Michael B. Alexander ’73, who founded an independent film distribution company, says that while any effect Summers’ resignation would have on fundraising would be “on the margins,” his alumni friends who had been critical of Summers would now be more open to donating with him gone.

“I know a lot of people who were sitting on the sidelines because they were unhappy with Summers and what he was doing,” says Alexander. “The last several years I’ve threatened not to give money myself—although I’ve always broken down and given money. But ironically I believe that Summers leaving and the transition is going to be a boost to fundraising, even now, or when the new president is appointed.”

BANKROLLING IDEAS

Despite the resolute resentment of some disgruntled alums, many donors say they are still willing to invest in Summers’ vision, even if he is not the one who is realizing it.

Richard M. Cashin ’75, the former president of Citicorp Venture Capital and a current managing partner at New York-based One Equity Partners LLC, writes in an e-mail that he thinks the agenda is more important than the individual sitting in the president’s office.

“It may matter who the salesman is, but it’s mainly the plan that attracts the money,” writes Cashin, who also served on the executive committee of the CUR.

Bartels says that he expects the University to select a new president who will continue to press for Summers’ goals.

“Of course it is a very ambitious agenda,” Bartels says. “But I’ve come to believe in the months since the resignation that [Summers’] agenda is really Harvard’s agenda. I’ve actually come to believe that it is a very widely-felt, widely-backed set of goals to be working towards.”

Summers, in an interview with The Crimson several weeks ago, agreed that in the long-term, the agenda is more important than the individual.

“Ultimately, and in the long-run, Harvard is much bigger than any individual. Harvard’s success in fundraising will have to do with the importance of the programs that it undertakes and its ability,” he said. “Harvard’s strength in fundraising has to do with the fundamental importance of its mission and the excitement of the programs that it undertakes.”

The University administration acknowledges the importance of sticking to Summers’ talking points, though Rapier also gives some credit to others for those ideas.

“A number of alumni, as you likely know from reading various published editorials, have expressed dissatisfaction with President Summers’s resignation,” says Rapier. “We have assured our community, however, that President Summers’s agenda was shaped by many individuals at the University and will move ahead largely intact under a new administration.”

Pitching this agenda to alums will be the task of Rapier and her administration under the incoming leadership of Bok and recently-appointed Interim Faculty Dean Jeremy R. Knowles. Despite their reputations as prodigious fundraisers, the two men are not expected to focus on fundraising in the short time they are back at Harvard.

INSTITUTIONAL MEMORY

Peter J. Solomon ’60, the founder of the New York-based Peter J. Solomon investment bank and another member of the executive committee of the CUR, says that he doesn’t expect big donors’ gift-giving levels to change.

“Harvard’s alumni are very loyal and recognize that no matter who is president, the University needs money to continue to fund financial aid and to support research and continue to be the best it can be,” he writes in an e-mail.

Paul J. Zofnass ’69, the founder and President of Environmental Financial Consulting Group in New York, says he has similar sentiments.

“I don’t think it has any affect on donation,” he says. “And my reasoning for that is that all of us who have a little bit of gray hair have seen at least half a dozen presidents and recognize that Harvard is far bigger than any one individual or any one president. Any ill feeling on the part of alumni or folks who gave money shouldn’t have any effect.”

Sidney R. Knafel ’52, whose $26 million gift endowed the Knafel Building, part of the Center for Government and International Studies center, says that his own level of giving would not be affected by the shake-up.

Michael C. Murr ’73, whose donation for an athletic center endowed the Murr Center, writes in an e-mail that administrative turnover is just one of many factors affecting fundraising.

“The fact that Harvard presidents come and go has far less impact on the donor pool than the general economic environment,” says Murr, who also served as a member of the executive committee of the CUR. “My own suspicion is that robust stock markets and high faculty morale are the key long-term elements to fundraising.”

—Staff writer Reed B. Rayman can be reached at rrayman@fas.harvard.edu.