Monday, March 2, 2009

Stanford tops fundraising in spite of economy

Stanford receives $785 million in donations for 2008 fiscal year

Despite an economically turbulent 2008, Stanford ended the fiscal year as the top fundraising university in the country.

Stanford garnered $785 million in charitable donations, according to the annual Voluntary Support of Education (VSE) survey, released last week by the Council for Aid to Education. The University raised $135 million more than Harvard, which was second on the VSE list with $650 million.

The $785 million given in 2008 represents the third best overall fundraising year in Stanford’s history, surpassed only by the $832 million raised in 2007 and Stanford’s peak fundraising year of 2006, when the university received $911 million.

Martin Shell, vice president for development at Stanford, attributed Stanford’s success to its capital campaigns. 2008 marked the midpoint of The Stanford Challenge, the multi-year capital campaign announced by President John Hennessy in October 2006 that seeks to raise $4.3 billion over the course of five years.

“Response to The Stanford Challenge has been nothing short of remarkable,” Shell said.

Of the $785 million received, individuals — alumni, friends and non-alumni parents — donated $593.2 million, foundations provided $142.6 million and corporate gifts totaled $49.2 million.

The nearly 112,000 gifts Stanford received in 2008 will be allocated based on donor designation into annual expendable programs, construction projects, faculty positions, research programs and endowed funds. For example, Shell said, $50 million was earmarked for annual expendable programs like The Stanford Fund, the giving program that supports undergraduate education. The overall division of 2008 donations was $437.5 million for expendable support (including annual funds, research and facilities) and $347.5 million for endowed funds (including scholarships and financial aid).

Though they were the best in the nation, the 2008 numbers mark a 5.7 percent decline from the $832 million received by Stanford in 2007.

Ann E. Kaplan, director of the VSE survey, said this decline represents a decrease only when compared to Stanford’s peak fundraising year in 2006.

“When you peak like that, there’s no way that you can maintain the status quo,” Kaplan said. “What you end up doing is tapering off.”

Shell added that despite the 5.7 percent decline in funds from 2007, the 2008 fiscal year was not significantly affected.

“During July and August 2008, we did see a slowing in activity particularly in some annual giving programs and at certain gift levels,” he said. “We saw some decline in the total number of donors and dollars received via stock gifts, but many of these donors supported Stanford in other ways.”

However, with insecurity in the financial markets, Shell said, Stanford could see some delay in multi-year commitments from donors in the coming years, meaning less money for Stanford in the immediate future.

“Individual commitments made during capital campaigns often are paid over a multi-year period,” he said. “For example, if a donor decides to establish a new professorship in the history department, payments for that commitment can be phased over several years — traditionally five years or less. With financial market uncertainty, however, there could be some delay.”

With a volatile economic climate on the horizon, some are worried about fundraising’s future and its impact on universities. Giving comprises only five percent or less of Stanford’s total $3.5 million budget each year, explained University spokeswoman Lisa Lapin.

“With an operating budget the size of Stanford’s, fundraising support in any given year does not drastically affect the overall budget picture,” Shell said. “The importance of gift support, however, varies among specific units, departments, schools and programs.”

Kaplan, however, is worried about endowment values in the future.

“Capital gifts to endowments and buildings are quite sensitive to the stock market,” she said. “Larger gifts are very often made in the form of stocks or securities. So when the stock market declines, the tax benefit of making such a gift goes down. If you say you’re going to donate 100 shares of a certain stock, the value of the stock goes down, even if your intention is the same. So right now, the future doesn’t look too good.”

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