Do huge university endowments attract donations?

The NYT’s Geraldine

Fabrikant had a long, loving profile of Yale’s David Swensen on Saturday

which says pretty much all the things you’d expect such a profile to say, including

how noble he is to toil away for a mere $1.3 million per year. I think he’s

just maximizing his own happiness:

In 1985, Yale recruited Mr. Swensen to manage its endowment. “I took

an 80 percent pay cut,” he recalls. “I was married, without kids.

I was worried that I would miss the money, but then I didn’t. So I worried

over nothing.”

Here’s the bit which jumped out at me:

Mr. Swensen’s track record and his growing cachet have helped Yale

attract donors who believe that their gifts to the university will be well

deployed…

Two years ago, Yale’s president, Richard C. Levin, brandished a chart

at a party celebrating Mr. Swensen’s 20th anniversary at Yale; during

those two decades, the university’s endowment had grown to $14 billion

from $1.3 billion. The chart showed a list of those who had made the most

significant financial contributions to Yale, and included names like Harkness,

Beinecke and Mellon. The name at the top of the list, however, was Swensen,

with a $7.8 billion contribution — Yale’s calculation of the amount

by which Mr. Swensen had outperformed average university endowments during

his tenure.

I’m fascinated by the idea that Yale’s gargantuan endowment ($20 billion and

growing) can actually attract donors. If I were approached by Yale

for a donation, I’d probably wonder how my few hundred or few thousand dollars

could possibly make a difference considering that the endowment is growing by

billions of dollars a year anyway. On the other hand, I can see the attraction

in giving money which will grow, rather than simply disappear once it is spent.

(Via Knobel)