Claremont, Williams Mega-Gifts Finance Fight Against Ivy League

Claremont, Williams Mega-Gifts Finance Fight Against Ivy League
Bloomberg, Oct-22-07
By Matthew Keenan

Liberal arts colleges in the U.S. are attracting alumni gifts of $10 million or more at a record pace to finance their competition with Ivy League universities for the nation's premier students.

Williams College in Williamstown, Massachusetts surpassed its $400 million capital campaign goal in June. Vermont's Middlebury College is almost halfway to its $500 million target, the most ambitious yet for any liberal arts institution. Claremont McKenna College in California received a record $200 million last month from investor Robert Day.

Schools have grown savvy in reaching out to alumni for ``mega-gifts,'' Michael Schoenfeld, Middlebury's vice president for college advancement, said in an interview. ``There is a need, there is the competition and there is the capacity of donors who are able to make a gift like that.''

For colleges with less than 3,000 students to compete with larger Ivy League universities for talented high-schoolers, alumni must help fund scholarships, attract professors and improve campuses, officials at the schools said. Universities are also seeking record sums, with Stanford, near Palo Alto, California, aiming to raise $4.3 billion. Cornell University, in Ithaca, New York; and Columbia University, in New York City, each set $4 billion goals.

Middlebury has drawn $50 million from an anonymous donor and $23.5 million from Shelby M.C. Davis, founder of New York money manager Davis Advisors. The school, in the midst of a five-year campaign, assigns eight of 65 development employees to donors capable of giving $100,000 to $5 million each.

Just three officials, including President Ronald Liebowitz, solicit gifts above that amount. Volunteers such as Richard Fuld, chief executive officer of Lehman Brothers Holdings Inc. in New York, also help the school tap affluent donors. Founded in 1800, Middlebury has about 2,350 undergraduates, compared with 6,700 at Harvard University in Cambridge, Massachusetts.

Wellesley's Example

Wellesley College, the Massachusetts women's college founded in 1870 whose alumnae include U.S. Senator Hillary Clinton, set a standard for liberal arts fundraising by gathering $472.3 million in a campaign that ended in 2005.

U.S. colleges and universities gathered an all-time high of $28 billion in contributions in 2006.

When Williams President Morton Schapiro took office in 2000, he drew up a strategic plan that resulted in a 15 percent increase in faculty, a new student center and greater financial aid, said Steve Birrell, vice president for alumni relations and development.

``We had needs coming out of the strategic plan that were of a different magnitude than we could support with so-called normal fundraising,'' which doesn't involve specially solicited mega-gifts, Birrell, 65, said in an interview from the school's campus in Williamstown.

Signature Gift

Williams, founded in 1793 with funds bequeathed by Colonel Ephraim Williams, publicly opened its campaign in the fall of 2003, after two years of preparation. The 2,000-student school's drive reached $413.3 million last week, and will continue through next year.

The signature gift was $20 million for a theater and dance center by Herbert Allen Jr., chairman of investment firm Allen & Co. in New York. The 1962 Williams graduate has a fortune valued at $2 billion by Forbes magazine.

Unlike universities more than twice their size, liberal arts colleges don't have medical schools or other research facilities that draw corporate and foundation grants, said John Lippincott, 58, president of the Council for the Advancement and Support of Education. Smaller schools rely instead on a cadre of deep-pocketed alumni.

Williams Donors

``You certainly are not going to achieve that goal in a period of five, six or seven years by accumulating small gifts,'' said Lippincott, whose Washington-based group represents marketing, communications and fundraising officials from 3,300 schools.

About 85 percent of the Williams money came from 2 percent of donors, including seven contributions of $10 million to $20 million each, Birrell said. At Middlebury, officials say a ``rule of 76'' calls for 76 gifts that together cover 76 percent of funds raised.

Claremont McKenna, with about 1,150 students, started soliciting gifts in March 2006 and plans to go public with the campaign next year.

Day's Donation

The school, founded in 1946, received $200 million in September from Day, an economics major who started TCW Group Inc., a Los Angeles-based investment firm that manages $70 billion. The gift will support students specializing in finance, accounting and leadership psychology.

His donation followed a $20 million gift by the Seattle- based Bill and Melinda Gates Foundation to fund science scholarships.

George Roberts, co-CEO of Kohlberg Kravis Roberts & Co., gave $20 million in October 2006. Roberts, a 1966 graduate, is seeking $40 million in matching gifts from other donors to create endowed faculty chairs. His initiative is more than halfway to its goal, showing that a culture of philanthropy has taken hold among alumni, said Claremont McKenna President Pamela Gann.

`Big Partner'

``People feel that they can have a high impact at a liberal arts college,'' the 58-year-old Gann said. ``A $20 million gift goes a lot further here than at a research university today. I think that matters. People feel like, `Oh, I'm a big partner.' And you are.''

Colgate University, in Hamilton, New York, launched a $400 million drive in March, and plans to reach that goal in three years, after taking in $234.4 million already.

``Our alumni are prepared to make those kinds of commitments,'' said Murray Decock, 48, vice president for institutional advancement.

Colgate got $27 million from Robert Hung Ngai Ho, a 1956 graduate, and dedicated its 121,000-square-foot science center to him last month. The school, founded in 1819, now has about 2,700 students.

Daniel Benton, the chief executive officer of hedge fund firm Andor Capital Management, in New York, gave $25 million. The 1980 graduate issued Colgate a challenge, making his gift contingent on the school's finding contributors for at least $25 million more in chunks of $1 million or greater. In March, 19 donors stepped forward with $27.9 million.