Brodhead administration combines smoke and mirrors with totals of contributions in last fiscal year

In a few days, Fact Checker will have a complete analysis of the Monday news release touting $349,657,667 in "philanthropic contributions" during the fiscal year ending June 30th. We also hope for details on the Annual Fund, as well as special giving by the classes that had their reunions in the past year.

So these notes are a place-holder.

Beware, fellow Dukies, administrators singing their own praises!!

✔ First, we note that the university uses an accounting system developed by the fund-raisers themselves -- called CASE -- to arrive at this total. This is the only number in any Duke financial report that uses CASE; every other number is compiled using the Generally Accepted Accounting Principles -- called GAAP.

We won't know the total using the more honest GAAP protocol until October; in 2009-10 -- as Executive Vice President Trask was forced to admit in the small print of his annual report -- CASE showed $345 million in donations, while GAAP showed $174 million.

✔ Second, much of the money is not what we would consider a "gift" or "donation" at all -- but rather a contract for which work must be done.

Example: If the American Cancer Society gives Dr. Anil Potti a grant to research lung cancer, and he has to do clinical trials, Duke calls this a gift. It is not. It is money to pay for work to be done.

✔ Third, Duke did not report the most important number in the annual contributions game: how much was added to the perpetual endowment, for this determines the long-term financial health of the University.

✔ Fourth, the university exclaims it got gifts from 106,423 "donors." Back in 2003, Duke reached 100,000 donors. Since then we have graduated more than 34,000 alumni. They, their spouses, their parents and their employers are all potential donors.

During these six years, we lost approximately 4,000 alumni who passed away, the size of classes years ago being much much smaller. The numbers of donors should have jumped far more than it has.

✔ Fifth, we note that the administration, desperate for any story that might seem like a success, rushed these numbers into a news release. How come these numbers are available -- unaudited -- at this time, but Fact Checker cannot get other Duke numbers on the last fiscal year until October?

✔ Sixth, while it is difficult to analyze year to year growth and declines, because some years fall within fund-raising campaigns and others do not, we have initial figures indicating that if you factor in inflation, Duke's fund-raising has actually lost ground in the last decade.

If you compare the amount of "gifts" to the overall size of Duke's exploding budget, you see a dramatic loss of impact by gifts, particularly the Annual Fund.

✔ Lastly, we note in the press release that President Brodhead patted himself on the back vigorously in taking credit for and celebrating the donations. We fear he may have wrenched his arm and shoulder reaching so far around back, and if anyone knows a good orthopedic doctor, please contact his office.

Thanks for reading and supporting Fact Checker!!

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