At Harvard, Money Goes Missing
Zach Seward reports in the Wall Street Journal this morning that "at least four major donations to Harvard, totaling $390 million, have been scrapped or put on hold since Mr. Summers announced his resignation in February."
The gifts included:
—$115 million from Larry Ellison
—$100 million from Mort Zuckerman to fund a neuroscience institute
—$100 million from Richard Smith, class of '46 and a former member of the Corporation, to fund a 500,000 square foot science complex in Allston.
—$75 million from David Rockefeller to fund undergraduate travel abroad
Seward writes: "The donor backlash could hamstring the university's plans for a long-delayed capital campaign. It also suggests that the internal debate continues over the resignation of Mr. Summers. Last month, wealthy alumni voiced their frustrations with the university's governing board for not standing by Mr. Summers during two private dinners at the Harvard Club in Manhattan."
A few thoughts.
This is obviously not good news for Harvard. But is it as bad as Seward suggests? I'm not so sure.
First, Seward is taking Ellison at his word that the withdrawal of his donation is truly related to Summers, and given that Ellison seemed to be going south on the gift well before Summers left, I'm not sure it's correct to attribute the loss of that money to Summers' departure. He is also taking Zuckerman at his word when, by all accounts, Mr. Zuckerman's media properties are not doing well. Zuckerman may simply not be in the mood to give $100 million just now.
Second, it's unclear whether those gifts are permanently withdrawn, or whether the donors in question just want to wait until a new president is chosen, as any large donor probably would, before allotting their money. After all, plans are on hold, priorities may differ—things are up in the air. Why write your check now, before enjoying the sumptuous pleasure of a new president kissing your ass?
Third, Seward's article would have been stronger if he had spoken to alumni who were withholding gifts
because of Summers and are now returning to the fold. Seward does note that the percentage of alumni giving dropped from 48 to 40% during Summers' tenure, but claims that "Mr. Summers's critics weren't donors on the same scale as those now withholding funds." I'm not sure what this claim is based on.
The piece would also be stronger if it took note of Summers' initiatives that are begun but not fully funded—the stem cell institute, for example.
But I'm sure that Seward is right and that there are some alumni, particularly older ones, who are pissed off about this whole thing—angry at the faculty, angry at the Corporation, angry at Harvard. (And we have all heard the rumors that, in private meetings, Larry Summers is stoking this anger with indirect criticism of the Corporation and the repeated suggestion that Harvard is scared to change.)
This shouldn't be a surprise; in fact, it's a direct corollary of Summers' leadership style. The former president consciously decided that he was not going to spend his time raising money in relatively small amounts—half a million here, a million there—but would target a handful of individuals for extremely large gifts. This was a fundamental break from Harvard tradition; Summers was essentially saying that raising participation numbers was secondary to landing a few nine-figure gifts.
From a pure financial viewpoint, in the short term, that theory may well be right. Whether in the long term it's good for the university—after all, alumni give because they feel invested in the Harvard community, and their gift furthers that commitment—is another matter.
Summers' approach to fundraising surely played to his strengths—connections with the super-rich and the ability to present a compelling vision of a scientific future—while downplaying his weaknesses: poor social skills, an inability to feign interest in anyone else, impatience, rudeness, contempt for those less important than he.
Nor was it unintentional, I think, that this fundraising approach also had the consequence of adding to Summers' own power. He could go to Mort Zuckerman and say, I want $100 million, and I want it for
x, which is a hell of a way of adding to the president's discretionary spending.
If these donors don't come back, then their gifts were more about their relationship with Larry Summers than their commitment to Harvard. And that, I think, would be typical of the Summers presidency from beginning to end.
