Higher ed, higher goals
Cornell University is going all-out this week.
Thursday features a news conference in New York City with the mayor. On Friday, 1,000 volunteers and wealthy alumni such as former Citigroup chairman Sanford “Sandy” Weill will be back on the main campus in Ithaca, N.Y., for an elaborate dinner. The menu: a salad that includes wild mushrooms and sweet vermouth cheesecake; marinated beef tenderloin; and, a hazelnut Godiva chocolate tart with minted raspberry sauce.
Cornell should more than recoup the bill. The festivities are kicking off a campaign to raise $4 billion.
It’s a jaw-dropping sum that exceeds the size of any university’s entire endowment 20 years ago, and all but about 15 today. To hit the target, Cornell President David Skorton will have to raise more than $1.6 million every day for the next five years.
But $4 billion isn’t even the biggest campaign announced in higher education this month. Stanford and Columbia just announced campaigns of $4.3 billion and $4.0 billion, respectively. Yale and the University of Virginia recently announced $3 billion campaigns, and 24 universities are officially trying to raise $1 billion or more, according to The Chronicle of Higher Education.
The campaigns come at a time when college is more expensive than ever. Just Tuesday, a national report found college price increases again outpacing inflation. Tuition, fees and room and board at Cornell run $43,707 this year, though it promises aid for any student who needs it and will use some of the campaign money for more scholarships.
“We have a lot of wonderful things to do with the money,” Skorton said in a telephone interview this week. Of the $4 billion target, he said: “I hope we’re going to blow right by that.”
They probably will. Cornell has already raised about $1 billion. Universities don’t announce campaigns until they’re confident they’ll make it, though sometimes they extend the typical deadline. UCLA stretched a recent campaign to a decade to reach $3 billion.
Multibillion-dollar campaigns have transformed how elite universities raise money. The traditional prodding at homecoming cocktail parties is supplemented by data mining and marketing consultants. Cornell’s fundraising staff numbers 125. Some schools pay top rainmakers $200,000 or more.
The goal is luring the big fish. Nobody gets to $4 billion in tens and twenties. Colleges still solicit small donations from young alumni, but that’s largely to increase the odds that alumni who strike it rich will already be in a giving habit.
“We have to have transformational gifts,” says Charles Phlegar, who heads Cornell’s fundraising. “Fifty million, $100 million — in that range — and we will certainly have that.”
Typically, 80 percent of a college’s fundraising comes from 20 percent of the donors, says John Lippincott, president of the Council for Advancement and Support of Education. That ratio gets even more lopsided with the biggest campaigns.
Some find the whole language of “campaigns” puzzling. Universities are always raising money; “campaigns” are just artificial start and end points. Typically, they involve a two-year “quiet” phase, for lining up top donors and securing about one-quarter of the goal. After that, the public phase typically lasts five years.
Still, the process is valuable. Fundraising campaigns — like political ones — force the participants to articulate their priorities and values. That’s important because such campaigns often spark questions about whether the concentration of wealth at the richest universities is good for the public.
A 2005 Associated Press analysis of the then-47 colleges with $1 billion or more found they held nearly two-thirds of the endowed wealth in American higher education, but educate fewer than one in 25 undergraduates. Those endowments are built with indirect public subsidies — tax-deductible donations and tax-exempt bonds.
“There is greater public concern about, why are they doing this when they’re charging such high tuition,” said Cornell economist Ronald Ehrenberg. “It’s absolutely incumbent on the universities when they go out and seek this money to show they are using it for socially important purposes.”
Cornell, which is partly public, is in fact fairly poor by Ivy League standards. Skorton said he hopes the school will someday replace loans entirely with grants for low-income students, but can’t promise that even with this $4 billion.
The other priorities are recruiting top faculty to replace retiring baby boomers, and updating aging buildings.
The money won’t “sit in some long-term investment pool somewhere just so we can reach an arbitrary level,” Skorton said, reeling off a series of research initiatives in areas like medicine and Third World development.
“Philanthropy should be spread around. But we should get our share because we’re one of the places that’s really turning the crank and changing the world.”
Officials at poorer schools envy Cornell’s wealthy alumni base and access to sophisticated financial advice that produces better investment returns. But most say they don’t begrudge Cornell its donations. Different colleges fish in different pools; Cornell’s gain is usually not another’s loss.
Other colleges are busy with their own campaigns, which have fewer zeros, but are often comparable for their size. Mount Holyoke is announcing a $300 million campaign this weekend.