Wealth Gap growing Bigger Among American Colleges

Stanford University had an exceptional year for fund-raising in 2007, collecting $832 million in private donations. Harvard, too, reaped a bounty, with $614 million in gifts.

Those sums, detailed in a new report by the Council for Aid to Education, show that even as Congress presses wealthy colleges and universities to spend more of their endowments, they continue on a fund-raising streak that will widen the wealth gap in higher education.

In all, colleges and universities raised about $30 billion, 6 percent more than the previous year. But nearly one-third of that increase — $518 million — went to just 20 institutions.

Those 20 campuses raised a total of almost $7.7 billion — or more than a quarter of all giving to colleges and universities, the council said. The top 20 represent fewer than 1 percent of the nation’s institutions of higher education.

Four universities — the University of Southern California, Johns Hopkins, Columbia and Cornell — raised $400 million to $500 million each. Eight others drew $300 million to $400 million, according to the study, which is being released on Wednesday.

The numbers are sure to fuel the unease of those who argue that universities are turning into fund-raising machines, with university presidents spending more and more of their time cultivating donors, aided by development teams, consultants and marketers who scour alumni lists.

“It’s great that people feel connected with the colleges they attended and want be part of their long-term health and success,” said Cary Nelson, an English professor at the University of Illinois at Urbana-Champaign and president of the American Association of University Professors.

“But Harvard could buy and sell a number of countries around the globe,” he said. “It could pay the tuition of all its undergraduates, and its endowment would still grow. It is time for wealthy colleges and universities to begin asking themselves what their broader social responsibilities are.”

John Longbrake, a Harvard spokesman, defended the way the university uses its financial resources. “Harvard and many other universities make enormous contributions to our nation in research, scholarship, medicine and the arts due in large part to the resources we raise and invest,” he said.

At a time when federal grants and state support have not kept pace with enrollments, public universities also are jumping into the race for gifts and seeking to build endowments. One made the top 10: the University of California, Los Angeles, which received $365 million in private gifts.

Seven other public universities ranked among the top 20, including universities in Wisconsin, Washington, Michigan, Minnesota, Virginia and Indiana, and the University of California, San Francisco. They each raised $252 million to $325 million. Other public universities lag, though they are starting to pick up some of the fund-raising skills of the powerhouses. At the City University of New York, for example, donations reached $279 million last year, a 39 percent increase over the previous year and three and a half times the total in the 2002 fiscal year.

Officials at the wealthiest universities are unapologetic about their success, saying it shows that donors approve of their goals.

“These are large numbers,” said Martin Shell, vice president for development at Stanford, referring to the university’s donations. “But they are made up of almost 56,000 individual gifts, and that includes many people making $100 gifts and $10 gifts.”

Stanford’s $832 million in donations, which followed $911 million the previous year, reflected a $4.3 billion capital campaign announced in October 2006. Such fund-raising drives are typically periods when gifts rise significantly. Stanford also received some sizable bequests in the past two years, Mr. Shell said.

“Our donors hopefully are feeling very good about how we are making the absolute best use of their philanthropic dollars,” he said. “It is something we take very seriously. There are an unlimited number of very worthwhile causes and needs out there. We feel these needs are real.”

In the past year, some Congressional critics have suggested that colleges and universities should use more of their wealth to reduce tuitions. Many colleges say that their aggressive fund-raising and large endowments allow them to provide more financial aid and to substitute grants for student loans.

The donations were made in the 2007 fiscal year, which for many campuses ended in June.

The council said that 1,023 colleges and universities participated in the survey.

New York Times

By KAREN W. ARENSON

Published: February 20, 2008