e. On duty. No spring break.
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Well make no mistake about it. This is a spectacular gift that will enable the university to re-activate plans to gut renovate the West Union, Page and Baldwin -- plans that had to be postponed because of the financial meltdown that cost fully 30 percent of all the wealth that Trinity College and Duke University ever accumulated.
But the announcement has more holes than good imported Swiss cheese, and aside from letting out a cheer at this moment, we do not have information needed to properly assess the gift.
✔Question one: Unlike the announcement of $75 million from The Duke Endowment (henceforth, we shall use the insider’s term TDE) for the Financial Aid Initiative in 2005, Monday’s press release did not say if the $80 million is above and beyond what TDE would normally be giving the university. The issue is whether this is just a public relations gimmick, packaging money that James B. Duke directed be paid to the University, or if we have a genuine addition from funds Mr. Duke left for use at the discretion of TDE trustees.
(TDE is a separate charity based in Charlotte with many beneficiaries, Duke University getting the lions share. It is frequently confused with the university because both had the same founder. To make matters worse, the university has its own endowment. And TDE invests its money right along side Duke University’s in one pool. Got it?)
✔ Question two: While Mr. Brodhead walked off with a $10 million check, unlike the Financial Aid Initiative where the announcement said the total would be paid over three years, there is no schedule for the installment payments that TDE will be making. Thus it is hard to ascertain if this is a break in the freeze on major capital gifts that TDE imposed on itself after it too lost a third of its money, or merely a commitment to be dribbled at the University in the future.
✔ Question three: It is also very curious that when the $75 million for the Financial Aid Initiative was announced, Mr. Brodhead also had $25 million in pledges from other donors. FC has this interpretation: it is still proving very hard for Duke University to raise capital funds, even for such high profile facilities as the Union, Page and Baldwin which present numerous naming opportunities. If we cannot sell these, what happens when we need money for a power plant, a parking garage, a road or new pipes?
✔ Question four: You have to wonder who decided that the Union, Page and Baldwin would be the highest priority -- among all the construction projects the university has had to shelve. Unfortunate answer: this decision was made behind closed doors with no stakeholder input. FC does not oppose the choice of the Union, Page and Baldwin -- indeed they are reasonable and vital -- but wishes the voices of students, parents, faculty and alumni had been incorporated. And if a different set of projects emerged, surely Mr. Brodhead could have influenced the TDE trustees to support them.
✔ Question five: You have to wonder too why the announcement was made on Monday after Spring Break began, when students whose experience at Duke will be so profoundly impacted are absent. FC interpretation: this is just another example of the administration’s disconnect with stakeholders. (The PR people did not put the Chronicle atop the situation either; it was approximately 10 hours after the event that the newspaper caught up with the news that FC broke around noon.)
✔✔ And so in the summer of 2012 or soon thereafter, there will be major disruption on West Campus. With the Union out of commission, thousands of people will have to find other places to eat. One idea in the works: tents on the main quad. Ultimately, the new Union will emerge not as a feeding station, but as an integral part of the education experience, with meal-times contributing substantially to the culture.
For Page Auditorium, there are two issues: will the auditorium, which has a capacity of only 1200 as well as a stage inadequate to mount major productions, be expanded and thus become a competitor for the Durham Performing Arts Center which opened in November 2008 and has already stolen several events traditionally held at Duke?
And then there is the possible re-naming, as Duke is sure to seize the opportunity presented by such a high profile facility to grab additional gifts from donors who will want to be memorialized; Page carries the family name of the first Trinity College alumnus who gave his life for his country in World War I (as well as the name of his uncle who was an ambassador) and FC puts the administration on notice that any tampering with this honor will be dealt with severely.
✔✔ President Brodhead hinted at a ceremony in the deserted Great Hall that this gift will be one cornerstone of a new, very large capital campaign. Typically such campaigns have about 25 to 33 percent of the money in hand during the “quiet” phase before a public splash is made. And it is very rare indeed for a press release to be issued during the quiet phase without announcement of the larger goal.
36 other universities are raising $1 billion or more right now. Stanford is aiming for just over $4 billion, and Columbia, with awesome success in raising $4 billion, is about to jump over Stanford and claim bragging rights for the biggest jackpot in the history of higher education.
There are tricks to all this of course: one way to make a campaign seem larger is to drag it out over more years, and to include money that otherwise would flow to the University. Thus, Princeton’s rather modest fund drive at the moment is largely phantom -- bolstered by funds that alumni traditionally give to the Annual Fund in any event.
There was also a gimmick in Duke’s last two major fund-raising drives. Nan Keohane’s spectacularly successful Campaign for Duke raised $2.4 billion, the 6th biggest jackpot in the history of higher education, but it relied on TDE for fully 17 percent of the stash. Similarly Mr. Brodhead’s rather modest $300 million Financial Aid Initiative relied on TDE for 25 percent. (FC had a good laugh with today’s press release, since the PR people wove the word “success” into close proximity to mention of the Initiative twice more, a common practice)
The flow of TDE money is a two sided coin. On the one hand it is nice to have a rich uncle who brings big gifts. On the other TDE merely holds money that James B. Duke might have vested in the University to start with, which was the pattern of all other college founders. Thus, the $80 million we got today would merely be listed as earnings on Mr. Duke’s 1924 gift via Indenture and his 1925 bequest, and not the subject of a big splash.
FC believes that TDE’s contributions are a crutch for the administration, disguising how much new money and new strength is flowing in, and we’d be better off not counting this as part of our fund-raising prowess.
Translated into today’s dollars, Mr. Duke’s original gift and bequest is bigger than the $80 million. But who cares if they claim this is the biggest gift in University history. In fact it does not even eclipse the $75 million for the Financial Aid Endowment if you do another translation. And it hardly beats the $72 million that Peter ‘64 and Ginny Lilly Nicholas ’64 pledged -- pledged -- to round out the Campaign for Duke in 2003. One big difference is that while the Nicholas family stiffed the university, we’re sure to collect from TDE.
Thanks for reading FC.
