REPORT of the Arts and Sciences Development Committee Introduction The Campaign for Columbia, the fundraising effort that has been underway for over ten years, reached its formal conclusion on December 31, 2000. The total funds raised is, by any measure, impressive: in excess of $2.5 billion was received for current use and endowment (excluding Presbyterian Hospital). The rate of receipts also climbed dramatically, growing by more than a factor of two on an annual basis from the first half of the Campaign to the second. In the early phase of the Campaign, however, faculty members were particularly skeptical of the successes proclaimed by the University Office of Development and Alumni Relations (UDAR) and the Central Administration, not least because the putative $2M per week rolling in did not seem to be having a significant effect on their lives or on the institution they saw around them. It is fair to note, however, that a final accounting for Phase I does show $184M in new endowment for the Arts and Sciences, and a total of $6.5M in gifts for capital projects. Nonetheless, as the second phase of the Campaign began, the ECFAS thought it would be helpful to set up a small faculty committee to monitor UDAR's progress toward meeting the specific fund-raising goals of the Arts and Sciences. The Committee's current membership includes Richard Bulliet, Henry Pinkham, Bob Jervis, and David Helfand. It meets two or three times a year with a group of UDAR and Central Officers including Dick Naum, Vice President for UDAR, Derek Bellin, Executive Director of UDAR, John Masten, Executive Vice President for Finance, Scott Norum, Vice President for Budget and Financial Planning, and David Cohen, Vice President A&S. The Committee has, in its faculty members' view, represented a model for the free exchange of information between the Faculty and the Administration. The presentations provided by UDAR have been exemplary for their completeness and comprehensibility; all requests for additional information have been met fully and promptly. We believe the data we have been given have allowed us to present credible reports to the Faculty and have provided for informed expression of concerns that have needed highlighting, both for the duration of the Campaign and, as we do here, for the future. We provide herein our final report on the Campaign and a summary of the priorities which we believe should guide fundraising in the immediate future. Overall Campaign Results Phase Two of the Campaign, the segment that concerns us here (and which we refer to hereafter as "the Campaign"), ran from June 1995 through December 31, 2000. While final accounting is not complete, the numbers reported here are accurate at the 1% level, and no significant adjustments are expected. The overall goal for the University was $1,000.000,000. The total amount raised was $1,510,783,437; thus, there is every justification to declare the enterprise a success. This total includes irrevocable pledges but counts them only once, and does not include unrealized bequests or other "soft" commitments to provide funds to the University. Thus, while all these dollars are not currently in hand, we believe it is a real total which can be used, for example, for budget planning. The goals for the three major components of the University were articulated as follows: Health Sciences $330,000,000, Morningside Professional Schools $256,500,000, and Arts and Sciences $350,000,000. The amounts realized were Health Sciences $589,274,192 or 179% of the target, Professional Schools $413,123,712 or 161% of the target, and Arts and Sciences $283,039,083 or less than 81% of the target. In this simplest of analyses then, it is clear that the high priority given to the Arts and Sciences as the heart of the University was not fully translated into fund raising success by the Campaign. In all fairness, these targets and achievements should be judged in light of the history of fundraising in these three divisions of the University. The goal for the Health Sciences was only 3.3% above what had been achieved in Phase I of the Campaign, and the other professional schools set a target $24M below what they had previously raised. In contrast, the Arts and Sciences goal was 15% greater than what had been achieved in Phase 1 (and $85M -- more than one quarter of the total -- was from a single donor). While the higher A&S target is easily justified, both in terms of the needs of the Construct and its relative priority within the institution as a whole, it is fair to characterize the A&S target as ambitious with respect to historical performance. It is also fair to note that all such goals have a certain degree of artificiality. For each segment of the University, the target figure can be broken out into several components: endowed professorships, endowed financial aid, capital projects, current-use unrestricted funds (including current-use financial aid dollars), and a final category orginally labelled "Unanticipated Expectancies", and now somewhat more transparently called "Endowed and Current-Use Funds for Research and Ongoing Programs". The targets in the first four categories represented ambitious extensions beyond historical giving levels, but were designed to fulfill critical unmet needs identified at the start of the Campaign and were used in planning future budgets. The final category has far less specificity, and the goals assigned were largely designed to make the totals for each division of the University consistent with the Central Adminsitration's stated priorities. Since these funds in general do NOT meet core priorities such as endowment funds for chairs and financial aid but rather represent the initiatives of individual faculty and departments to support research and underwrite other projects, we think it is most reasonable to assess the Campaign results excluding this category\footnote{Originally, receipts in this category did have implications for the A\&S budget, in that the 6\% tax on departmental endowment spending was incorporated into the five-year budget plan, assuming the Campaign goal would be met. However, when it became apparent the goal would not be met, these assumed revenues were systematically scaled back in projected budgets such that, exposure to the shortfall in the current and future fiscal years is minimal}. Removing this last category, the goals and results are as follows: Segment Goal Funds Raised % of Goal Health Science $ 89,000,000 $120,650,695 136% Professional Schools $196,900,000 $223,373,204 114% Arts and Sciences $222,500,000 $208,714,889 94% Thus, while again the Health Sciences and Professional Schools both exceeded their goals, and the Arts and Sciences fell short, the discrepancies in both directions are considerably narrower. Further information concerning the other two segments is available upon request, although we think it unecessary to explore the details here. Rather, we focus on the Arts and Sciences targets by category and school in order to help assess budgetary impacts and to inform priorities for the future. Arts and Sciences Results The Arts and Sciences total goals and realized funds are as follows: Category Goal Funds Raised % of Goal Endowed Professorships $75,000,000 $45,643,550 61% Endowed Financial Aid $43,000,000 $44,551,500 104% Capital Projects $68,000,000 $62,841,368 92% Current-Use funds $36,500,000 $55,678,471 153% We begin with the good news on current-use dollars, which are derived primarily from the annual fund drives for each of the constituent schools. All five schools exceeded their targets, with the GSAS annual contributions up to over $1.5M per year, General Studies raising 167% of its target, and the College exceeding its goal by more than $10 million. The improved infrastructure to support Annual Fund solicitations is clearly a major achievement of the Campaign, and can be expected to yield a permanent increase in funds to each of the Arts and Sciences schools. It is important, however, that attention to this significant revenue stream not flag; it is also crucial that school budgets not reflect anticipted continued growth lest funds be allocated before they are even raised. For example, essentially all of the enhanced revenue from the Campaign period have already been incorporated into annual budgets and spent. The significant facilities improvements and additions to the campus over the past five years are a visible sign of the Campaign's fruits. Given that projects not included in the original 1995 goal were added over the last few years (e.g., the Hamilton renovation), the Capital projects result can also be counted a success. The only remaining unfunded project is the naming gift for the new Broadway dorm, and there is reason to be hopeful that this will soon be secured, closing the final gap with the Campaign goal. On endowed financial aid, the ambitious overall goal was met, although the results across the Schools are uneven. Over $29,000,000 was raised toward the College's target of $20,000,000, clearly a major success. General Studies also exceeded its more modest goal of $3,000,000 by nearly 10%, and SIPA, with the same target, raised over $3.5 million. The School of the Arts, however, fell substantially short of its $2 million goal, taking in only $763,000, and the Graduate School, with a very ambitious target of $15,000,000 garnered only $6,700,000 (although very large bequest already committed will achieve the current goal when it is realized). The GSAS total still represents a significant improvement over past performance, but it is clear that graduate financial aid must remain a top priority if we are to implement successfully the ambitious School enhancement program that has been underway for the past several years. The historically poor performance of raising funds for substitutional faculty chairs is a principal cause of the heavy tuition-dependence of the Arts and Sciences, and the consequent precarious nature of its annual budgets. In the first phase of the Campaign which lasted nearly 7.5 years, 32 A&S chairs were raised, but far from all were either substitutional or fully funded. In response, the most recent phase of the Campaign set a target of 50 fully funded and fully substitutional chairs for the Arts and Sciences. Throughout our Committee's tenure, we have expressed concern that progress toward this target was insufficient to meet the goal. This assessment has proven to be correct: only 32 chairs have been raised as of December 31, 2000, leaving a shortfall of $30,000,000 in this crucial category. With a 5% endowment payout, this would produce an annual $1.5M gap in the Arts and Sciences budget. Given the conservative budgeting practices of the current A&S administration, the immediate impact is considerably more muted. As we have reported earlier, it was assumed endowment dollars would be received on five-year schedules for all endowed chairs; thus, the full shortfall would not be evident until 2005, and additional chairs raised between now and then will further diminish the budgetary damage. Nonetheless, the impact is significant. As important, the failure yet again to address fully this core A&S need leaves us heavily dependent on tuition, and more vulnerable to external shocks to the budget. We have been assured at our most recent meeting with the administration that they remain committed to the goal of 50 chairs and are confident it will be met shortly. A total of 23 solicitations for fully funded chairs are said to be in progress with an average expected time frame of nine months and an anticipated success rate of 80%. While this would (curiously) lead to precisely 50 chairs within a year of the end of the Campaign, the record of performance on this issue leaves us skeptical. In fact, only seven new chairs were raised in the last eighteen months of the Campaign, a rate lower than that in each of the previous four years. Agenda for the Future The Campaign for Columbia has raised a large amount of money. More than $101M has been added to the Arts and Sciences endowment over the past five years. Perhaps even more important, UDAR and the school Annual Fund operations are much stronger than when the Campaign began. However, it is clear from the results presented above that more remains to be done. The priorities to us are clear: graduate student financial aid and faculty chairs. While some of our peers are announcing $200-300M graduate financial aid endowments, we are raising just over $1M per year; it will take a long time (in the astronomical sense of long) to catch up at that rate. Qualitative change is required. We are encouraged to hear in this regard of the strengthening of the Foundation Relations office as UDAR reorganizes for the post-campaign period, and that three additional full-time fundraisers have been added to the staff soliciting A&S gifts. It is clear, however, that additional changes are needed in the culture of fundraising at Columbia if we are to sustain a competitive Graduate School. Furthermore, it is essential that the priority of raising endowed chairs be articulated unambiguously to those responsible for doing so. Many faculty members are more than willing to assist in this effort, but the responsibility for developing prospects and generating the gifts clearly lies with UDAR. We urge in the strongest terms that in the ongoing re-tooling for the post campaign period, every major decision be examined in light of its impact on these clear priorities for the future.