Last September, Harvard publicly launched a $6.5 billion fundraising campaign that seeks to position the University for the future amid the many challenges facing higher education.
The campaign is expected to support an array of programs, initiatives, and physical spaces, from renovated Houses to construction in Allston, from enhanced financial aid to an emphasis on innovations in teaching and learning, from an expanding School of Engineering and Applied Sciences to strengthened arts and humanities.
The public launch came after an initial “quiet period” during which the University raised $2.8 billion in gifts and pledges. President Drew Faust recently said that the total has now surpassed $3.7 billion, leaving the balance to be raised over the next four-plus years.
Leading the campaign are nine co-chairs and three honorary co-chairs. Among the co-chairs are five members of Harvard’s two governing boards, the Harvard Corporation and the Board of Overseers, who have a unique vantage point from which to assess both the campaign’s progress and Harvard’s needs. They are Harvard Corporation members Paul Finnegan and Joseph O’Donnell, Overseers Diana Nelson and Gwill York, and James Rothenberg, who as Harvard’s treasurer serves as a member of both boards.
The Gazette recently spoke with those co-chairs to get an update on the campaign since its September launch.
GAZETTE: We are all aware of the global financial pressures of the last several years. Can you help us set the financial context of the campaign? What are the financial pressures that are at work in higher education and that specifically affect Harvard?
JAMES ROTHENBERG: I don’t think any of those are a secret. At one level, the government’s funding of research is certainly under pressure. That is a significant challenge for most research universities because the government has been a growing source of scientific research funding over a long period of time.
The second issue that I think is not as well understood is the impact from regulation. Whether it’s documenting research grant numbers, whether it’s just all the paperwork you have to file, it creates an enormous cost to the University.
The third big issue is the current level of tuition, room and board, plus related costs. We’re at a level now that the notion that you’re going to get a lot of incremental net revenue out of tuition growth is probably in the past, especially given our strong commitment to generous programs of financial aid.
And finally, it would not be a great assumption to say that rates of return on the endowment — anybody’s endowment — will match the period from, say, 1982 to 2000. So you have a set of pressures on most of the major revenue lines of the University and also the cost pressures of all of this government regulation.
GWILL YORK: The way I look at it is that each generation has to support research and education, and make sure there are resources available to discover new knowledge and then disseminate it.
So, in a way, it doesn’t really matter what the global financial pressures are at any given time, there is still this obligation, this responsibility. The obligation only grows when there is pressure, because there’s even greater competing demand for limited resources.
I’m sure that through the Web and other digital technologies, we have cheaper ways to preserve and access knowledge. But teaching, learning, and creating new knowledge are always going to be very expensive to do at the highest levels of quality. And there’s never enough knowledge. It’s not like we’re running out of things to know about and to learn.
GAZETTE: Can you talk about the endowment’s role in the University’s financial picture? What do you say to people who think that Harvard’s endowment is plenty big already?
DIANA NELSON: If we look at the headline on the endowment, it is a breathtaking number, but the actual story is a lot more complex.
Harvard has enormous breadth and depth. We have many Schools doing great work in addressing problems in society, work that has real benefit, and that has global application, and it costs a lot to do that work.
The endowment over time has had a strong return on investment. But we can’t expect that to continue forever. It is also not just a big pool of unrestricted money, but rather composed of thousands of different funds, many of which are limited to particular uses, according to the wishes of the donors.
I would encourage people to ask, “What is the impact of dollars invested in the endowment? Is Harvard a good steward of these dollars?” If the answer is yes, then there are places where, given the scope of the University’s work, and its benefits to our students and to society, new endowment funds can have a great positive impact.
JOSEPH O’DONNELL: I get that all the time [the comment that the endowment is big enough], because I do a lot of fundraising. And you might want to give money to local chapters [of other charities]. My son had cystic fibrosis, so I have a perfect reason to want to give money to the CF chapters. And I do that, but I give more money to Harvard, because I realize that what the people have in common who are changing the world in science — in cystic fibrosis and AIDS and diabetes and cancer — is that many of them were educated at Harvard or are doing their research here.
So I’m still going to support my local CF chapter, but I’m also going to give to Harvard and this amazing place will continue to educate young people who will become leaders in their professions.
PAUL FINNEGAN: The endowment is a critical part of Harvard’s well-being. It provides about 35 percent of the operating budget on an annual basis, but it’s not a piggy bank. It’s supposed to be forever, managed in a prudent fashion to provide annual distributions and maintain its purchasing power.
At the same time, people should understand that it represents the cumulative total for all our Schools and museums and the library, and so forth, and a great deal of the endowment is restricted in terms of how it can be utilized. So yes, it’s large, but it’s not something that can just be utilized at will, without consideration for the long term and equity across generations.
GAZETTE: President Faust, in her speech during the campaign kickoff, said that higher education is undergoing a “seismic shift” and being challenged to reinvent itself. What do you see as the distinctive challenges facing higher education, and how do they affect Harvard?
FINNEGAN: First of all, higher education in the United States is regarded as the best in the world, but I don’t think any institution can be complacent, no matter where it currently stands. History is filled with examples of organizations that had a pre-eminent position and were not able to maintain it because they didn’t adapt, embrace change, and challenge themselves to do better.
Harvard has to be prudent and make investments to maintain our position. Higher education is definitely a global industry, and there are new competitors, new challenges, new opportunities. The playing field is shifting.
One pre-eminent question in higher education today is how to assess the value of the experience. We all benefited enormously from a liberal arts education, but there’s debate today about the role of the humanities. A liberal arts education has been a very important part of who we are as individuals, but there are folks out there asking serious questions. We have to keep making the case for why that kind of education matters so much.
The emergence of online learning is also central. I think Harvard has approached it in a very prudent way, using it to enhance the classroom experience for our students and at the same time thinking about how to share an excellent education with the world. That is a very practical and creative approach to online learning, but there are still lots of hard questions ahead.
ROTHENBERG: For the last 30 years or so, Harvard and many of the major universities didn’t have a real sense of being resource-constrained. We were able to build facilities, attract new faculty, and keep growing.
Now we cannot do everything that people would like, so we have to make choices. And when you go from an environment where there wasn’t much pressure to make choices to one where you have to make choices, that’s a major shift in attitude, and it takes time to adjust.
In addition, the competitive environment in which Harvard sits is changing. The Singapore government wants to develop scientific research capabilities. CERN in Switzerland competes for scientists with money funded by governments. The Chinese will spend a great deal of money for education. Those are just a few examples. The big new investments in higher education abroad are presenting an interesting challenge.
GAZETTE: The campaign includes a variety of priorities and broad themes. Can you talk about one that you think is particularly important not just to the institution, but to you personally?
NELSON: House renewal is really important to me. I find it particularly compelling in an era when our students are spending a lot of their lives engaged with technology. It makes it all the more important that we create places that are about face-to-face human exchange, community, living with somebody with a totally different background, having meals with professors and other students.
We have an incredible history of excellence and of ideas, but we also have an incredible history of place. So the common spaces being created — a student center, renewing the Houses — at the same time as we explore the power of technology, I think that’s very, very important.
I’m also very happy that the campaign includes the theme of meaning, values, and creativity. As we talk more and more about technology and science and engineering, I believe the arts and humanities are absolutely critical and essential to our lives. I hope their value is fully recognized, because I think there can be a sense that the humanities are under siege. This is a core part of the Harvard experience. It’s something to champion and protect.
An overarching idea is that of “One Harvard,” which can sound glib, but I really see Drew being effective in creating a sense of collaboration and common purpose across the University and in setting priorities, enacting transformational change.
Harvard has always had and continues to have extraordinary strength in each of its Schools. “One Harvard” draws on and multiplies those strengths, as so many of the intellectual and societal challenges in the world require knowledge, analysis, creativity from many different Schools and disciplines. It amplifies the University’s power to create and deliver new knowledge to and for the world.
So beyond the campaign themes, there’s the envelope in which they’re all being conceived and delivered that I think is compelling.
O’DONNELL: I was a product of the largesse of a lot of people who came here before me. Everybody, even those who were not at Harvard on scholarship, benefited from people who previously built the buildings, left the endowment, and basically funded this place over what’s now almost 400 years.
Without financial aid, I never would have had the opportunity to go to college or to business school. I had a fellowship at the Business School and a scholarship at the College. So, when I’m fundraising, my personal favorite is financial aid so we can continue to bring in the most outstanding students.
GAZETTE: At a personal level, what motivates you to serve as one of the campaign co-chairs? Why this as opposed to something else you might do with your time?
YORK: Well, the way you asked the question implies limits. And yes, all of our time is limited, but I feel like my effort is not.
As my children have grown and I’ve gotten more effective in my work life, I have much more bandwidth to give to others. That’s how I’m wired, to give; maybe it’s because I’m from Cleveland. If I have more time, I want to give it to communities and institutions and people — one on one — that I care about. I’m really privileged to have been asked to be part of this campaign.
FINNEGAN: Well, I went to the College and the Business School, and both were wonderful experiences that had a big impact on my life. I have terrific relationships from College. I wouldn’t be in the private equity business today if it wasn’t for my education at Harvard Business School.
Through continued involvement in the Harvard Alumni Association and the Overseers and now the Corporation, I’ve gained a greater appreciation of the University as a whole. [My wife] Mary and I now view ourselves as citizens of the whole University. In addition to the College and the Business School, we’ve gained an appreciation for many of the other Schools, including the Ed School, where Joe O’Donnell and I are honorary campaign co-chairs, the School of Public Health, the Radcliffe Institute, and the Kennedy School. And those just happen to be the ones we’re close to. Every one of the Schools does extraordinary work.
It’s a magnificent collection of Schools. There’s no place quite like it. No matter what your philanthropic concerns or your interests in general, Harvard offers an array of opportunities to pursue them.
GAZETTE: What’s your sense of how alumni and others are reacting so far to the campaign?
O’DONNELL: How about spectacularly? Beyond my fondest expectations. I think it’s a funny thing about campaigns, because you start talking about not just parts of Harvard but the whole University, and people say, “Wow, I didn’t know that,” and things ratchet up on their own. I think you’ll be seeing a number of very large gifts that will set the bar even higher. So I have complete confidence that we will achieve our goal.
ROTHENBERG: First of all, I have been surprised and impressed at how many people have a sense of wonder and awe and commitment and respect and fond memories of Harvard, and how many of them have been willing to translate that into significant gifts. And that has been very rewarding.
I know that Drew Faust feels the campaign has received an extraordinarily positive reception wherever she’s gone on campaign outings and meetings. She has found people coming out of the woodwork who are interested in Harvard, are willing to participate, and who want to be closer to the University.
One thing Harvard has is an incredible international reach. I think this campaign is going to have a broader international engagement than the last one. It’s been very rewarding, and I think our alumni and friends have been very responsive.
GAZETTE: How do you see the campaign’s larger purposes, beyond the obvious aim of raising money to support the University’s near-term priorities and needs? How can the campaign help position Harvard well for the long term?
FINNEGAN: I look at the campaign as an investment in the future of this remarkable entity we call Harvard. It’s a magnificent investment. It has been for years and years and it will continue to be. The campaign is about backing the leadership of the institution and believing in the impact Harvard can have, based on what the institution did for each of us, and based on what we see Harvard folks doing in the world.
The College is, in many ways, the heart of the University, and House renewal is absolutely critical. It’s so important for undergraduate education — not just in terms of a place to live, but in terms of the whole College experience.
The role of Allston for Harvard’s future is so important, as is online learning, innovative teaching and learning, a whole range of particular programmatic investments.
O’DONNELL: Because of the campaign, each of the Schools — whether the Ed School, Law School, or B School — has separately looked at short- and long-term prospects, at developing faculty, at how to attract the best possible students, at their space needs, and took a position on where they want to be on all those elements. I think without the campaign, developing that long-range vision and planning to bring it about doesn’t happen in quite the same way.
NELSON: I really believe that the campaign is an opportunity for us to engage and re-engage broad numbers of alumni and, beyond that, people who care about higher education and its impact. To me, the campaign won’t be successful if all we do is raise the dollars we have to raise.
It’s also about the connection, the engagement, and the responsibility to sustain that commitment. We can have an even larger impact when we have people who really care about Harvard’s work, who want to disseminate the knowledge we develop, and who want to sustain a commitment to a particular type of research or inquiry.
GAZETTE: When people ask you, “Why should I give to Harvard?” what do you say?
YORK: Give to Harvard for the future you want to see. When I give time and financial resources to Harvard and to other organizations, I’m taking care of the communities that I care a lot about and that I belong to. When I’m asked why I should give to Harvard, I say it’s like taking care of a family relative who took care of you. And, I hope it doesn’t come off as Pollyannaish, but a little support from everyone is really important.