NewHavenBIZ

18 n e w h a v e n B I Z | D e c e m b e r 2 0 2 1 | n e w h a v e n b i z . c o m F O C U S : A c c o u n t i n g focusing on the individual benefits of donations, COVID-19 has created a movement centered around giving for the collective good." Mary Alice Haddad, a professor at Wesleyan University and expert on nonprofits, traces the shift in emphasis to recent admissions controversies at top-tier schools and the Black Lives Matter movement. Yale was among the colleges implicated in the Operation Varsity Blues scandal, in which wealthy parents paid bribes to coaches to gain entrance for children. The Trump Department of Justice also accused Yale in 2020 of discriminating against Asian-Americans and white applicants in its admissions process. The Biden administration earlier this year dropped that discrimination lawsuit against Yale, which denied the allegations. Instead of focusing on benefits for their students, top schools instead are trying to inspire donors with their visions for social change, Haddad said. "There has to be a little bit more of a purpose to why anyone should give their hard-earned cash to a rich, elite university," she said. The capital campaign comes as Yale's investment portfolio saw a 40.3% net return for the fiscal year ending June 30, boosting the endowment by $12.1 billion in that period alone. Fundraiser challenges For Yale, its capital campaign launch in October was greeted by the expected controversy, in this case a protest by unions and city activists across the street from the launch site raising concerns about the school's wealth. Some alumni also grumbled online about the decision in the campaign's "silent phase" to rename Yale's drama school for Hollywood mogul David Geffen, who gave $150 million in June. The rechristening of an entire professional school for a donor was a first for the university in living memory and may entice more big- dollar gifts. Fundraising events to spur donations have also been impacted due to the COVID-19 pandemic, although according to the university's most recent tax form, Yale's two major fundraising events in 2019, the Blue Leadership Ball and Football Assoc. Golf Outing, lost a total of $180,065 due to high expenses. Even so, engagement with alumni remains an issue for all schools. "The way that most colleges make connections to their alumni is through those events — all that went away," Antonetti said. Nonprofits of all kinds are struggling, she added, trying to figure out, "How do you engage with your donors? How do you figure out who your donors are?" Tax implications One thing that won't likely dampen enthusiasm for giving to Yale's capital campaign and nonprofits in general in the near term is the tax code, although risks may arise in future proposals by President Joe Biden, Antonetti said. Many nonprofits had feared a decline in giving aer the 2017 boost to the standard deduction as part of President Donald Trump's tax plan, but most charities have reported little change. "I think they found that a lot of people gave money because they wanted to give money," Antonetti said of nonprofits. "e large donors will find ways." Another Trump tax change will likely hit Yale in the future — a measure setting a 1.4% tax rate on investment income for universities with endowments of $500,000 per student. Yale said in its most recent annual financial report that the measure's impact won't be known, "until further regulatory guidance is published," but Harvard has said it could face a $37.7 million tax bill, and Stanford, $42.9 million. Yale can look for encouragement to its neighboring institutions of higher education that have seen strong donations to capital campaigns in recent years. e University of New Haven wrapped up its four-year "Charger Challenge" campaign at the end of last year with $167 million, exceeding its original goal of $100 million. Fairfield University beat the goal of its most recent capital campaign by nearly $60 million for a total of $218 million by the 2018 close. e fundraising effort's success helped prompt the school's board of trustees in October to extend President Mark R. Nemec's contract through 2027. Local universities also continue to highlight major gis: Albertus Magnus College renamed its Academic Success Center this summer aer a $1 million gi in memory of Lillian Adley Germain, class of 1957. For Yale, key to motivating its givers moving forward may be translating its loy rhetoric into concrete goals and benchmarks, Haddad said. Donors want to see that their gis get results, she added. "Transparency is going to be a key feature of this," Haddad said. "If they're just funding the same things they always funded, it's really just a branding question." n Continued from previous page Mary Alice Haddad is a professor at Wesleyan University and expert on nonprofits. Yale's endowment growth over past decade Endowment Market Value 0 $5B $10B $15B $20B $25B $30B $35B 2011 2012 2013 2014 2020 2015 2016 2019 2018 2017 $31.2B Source: National Center for Education Statistics Yale renamed its drama school after Hollywood mogul David Geffen after he donated $150 million to the program in June. PHOTO | CONTRIBUTED

• Cover