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Saturday, October 21, 2006

Trump U.



'The[se] are ... very wealthy institutions, with endowments that in most cases run into the billions. Stanford, for instance, has an endowment of around $15 billion, making it the third largest among universities, behind only Yale and Harvard. (Harvard’s astounding endowment is now nearly $30 billion.) And of course if you’ve ever visited Stanford — with its fantastic medical complex, its professional-quality athletic facilities, and its gorgeous campus — you know that what is most striking is not how much Stanford seems to need, but how much it already has.

All of which made me wonder: does Stanford — and Yale, and Brown and N.Y.U. — really need to raise ever more billions to add to the billions it already has? Or is this an example of fund-raising run amok, a case of the rich getting even richer — just because they can?

“I like to say that if this campaign ends up only being about $4.3 billion, we will have failed,” said Martin W. Shell.

Mr. Shell is the vice president for development at Stanford — i.e. the chief fund-raiser — and he was making the case that the sum of money the university was trying to raise, eye-popping though it is, was far less important than the way the school planned to spend that money.

The list of goals for the Stanford Challenge is undeniably impressive. .... It is hard to criticize any effort to raise money that might help cure disease, and far be it from me to try. ... [But] at least some of these initiatives dovetailed with issues that were already on the minds of potential donors. For two years before the introduction of the capital campaign, Stanford was raising money during what’s called the “silent phase,” talking to donors, gauging the market and getting a sense of what alums and others might be willing to fund.


... These competitive pressures among the elite universities have led to an odd result — or at least odd when you think how competition normally works. Competition normally causes prices to go down. But ... in the case of the nation’s most prestigious universities, competition actually causes prices and costs to rise because the ever-upward spiral of bigger salaries and better facilities and all the rest of it makes the running of the university that much more expensive.

One thing that surprised me was that so few people in the world of higher education seemed bothered by this. Whenever I asked about the high cost of tuition — and why these campaigns and huge endowments didn’t stop the relentless annual tuition hikes — I was told that tuition only covers about 60 percent of the cost of education, and besides, a great deal of money raised in capital campaigns went to financial aid. (Stanford tuition is currently $32,994, with room and board adding another $4,796.) Those students who are paying full freight — and their parents — have certain expectations about the kind of facilities they will have access to, the professors who will teach them, the computers they will use, and the schools are raising money in order not to disappoint. “They are responding to market demand, in which parents and students select the fanciest, most luxurious, best-equipped schools — and everyone wants their tuition discounted,” Mr. Lombardi said. The money raised in capital campaigns helps the elite institutions market themselves.

There is no question that the rise of the elite American university is one of the great success stories in modern life. In their own way, they are global leaders. The competition among them have made them all better. But it has also drained talent and money — and made life more difficult — for all the hundreds of universities that do not rank, in the public mind, with Harvard and Stanford and Yale. These other universities are the schools that educate the vast bulk of American college students. They can’t conduct $1 billion fund drives. And so, ever so slowly, they are falling behind. That’s not Stanford’s fault, or even Stanford’s problem, but it can’t possibly be good for the country.

One other thing about capital campaigns. Whenever I asked anyone involved in one whether they were trying to trump someone else’s campaign — whether, that is, the amount of money they were trying to raise was itself a form of competition — I was told that nothing could be further from the truth. Robert M. Berdahl, the president of the Association of American Universities, told me flatly: “You don’t have a capital campaign because one of your peers is having one. It is about the university’s need for resources.”

But then, a few days ago, something happened that made me wonder about that claim. Cornell got wind of what I was reporting, and a public relations executive sent me a series of e-mail messages trumpeting its own capital campaign, hoping that I would mention it in this column.

So here goes. The campaign will be announced Thursday in New York, and though the executive wouldn’t tell me its size, she strongly implied that it would be right up there with the big boys.

The Cornell campaign, she wrote me, would establish “a new Ivy lead in the ‘race for the top dollars.’ ” Competition, indeed.'



--nytimes--