Universities, Seeing a Shrinking Fund-Raising Pool, Jump in

IN a room where crystal chandeliers sparkle off seasoned leather, fine old clocks, and the portraits of scores of Harvard notables - including Longfellow, Lowell, Franklin - a university president who presides over an endowment of $5.78 billion asks for $2.1 billion more.

Uh, really?

``We're in a different era,'' said President Neil Rudenstine, as he launched the largest fund-raising drive in the history of higher education. ``The world has changed and is more volatile than it was even three or four years ago - with very high implications for higher education.''

``We're in a time of relatively scarce resources,'' he added. ``I expect this to continue for some time.''

In the past, a fund-raising campaign of this magnitude might have trumpeted bold new ventures, the launch of a professional school, or at least a building or two. The tone of this and other university fund-raising drives now under way is decidedly more modest. ``Long ago, we decided we could not begin to teach or do research on a fraction of what could be done,'' Mr. Rudenstine said in an interview. ``We're not adding a single department or school in this drive....''

Instead, Harvard and other research universities are casting appeals for funds more in terms of prudent management than breakaway initiatives.

``Throughout the process, we have been acutely aware of the need to live within limited means and to restrain growth significantly. Much of our effort, therefore, has focused on ways to manage ourselves as effectively and efficiently as possible,'' the campaign prospectus reads. Harvard's early fund-raising goal of $3.6 billion, for example, was scaled back to $2.1 billion.

THE campaign includes appeals targeted to specific schools and programs. For $25 million, for example, you can name the Harvard Law Library. But this is, in fact, the first centralized fund-raising drive in Harvard's history. Harvard's 13 schools and colleges have been responsible for their own funding.

This president insists he has no hidden agenda to centralize decisions on academic priorities. ``A fund-raising campaign is not a time to alienate anyone,'' Rudenstine says. But the new campaign does include $235 million to give the president resources to ``fund promising initiatives'' and assist ``underendowed departments.''

This strategy will help ``those schools that traditionally have not had a group of high-powered alumni they can raise funds from,'' says Dudley Blodget, spokesman for Harvard's Graduate School of Education, which last managed a fund-raising drive 20 years ago.

Other campaign goals include:

* Significant investment in undergraduate education, including 40 new positions for faculty in the arts and sciences.

* Forging ``creative links'' among the university's different parts to meet ``socially urgent needs,'' such as public-school education.

* Redesigning professional education.

* Increasing student aid.

A less-prominent goal is to balance a $1.3 billion annual operating budget. Three years ago, Harvard's deficit was $41 million; last June, $21 million. ``We expect a deficit of $10 million this June and expect to be in full balance in a year,'' the president says. ``But we will keep cutting.''

UNIVERSITY administrators across the country see income streams drying up.

``The amount available for public and tax-supported or assisted universities has undergone substantial shrinkage,'' says Tom Ingram, president of the Association of Governing Boards of Universities and Colleges. ``In private education, there is a strong resistance [from consumers] to pay more, and charitable contributions have leveled off to make up the difference between college tuition and costs.''

A new federal policy to suspend cost-reimbursement to universities for new research projects for one year is expected to further reduce federal support by $100 million, he adds.

Two-thirds of Yale University's $1.5 billion fund-raising campaign is earmarked for facilities and deferred maintenance. ``For many years in the 1970s during a money crunch and inflation, decisions had to be made as to where the money would go. We kept [academic] programs instead of replacing electrical wire and heating systems,'' says Yale spokesman Laurie Trotta.

Cornell launched its $1.25 billion campaign in October 1990. Says university spokesman Sam Segal: ``From the beginning, the president [Frank Rhodes] said this wouldn't make us rich. He's been saying, `It's a new era.' ''

At Cornell, he adds, the dean of the Agriculture School closed the poultry-science department, reallocating faculty elsewhere. As positions became vacant, he collected them instead of filling them in their own departments, and finally opened a biotechnology department. ``That's the model we're talking about more and more. We're doing new things but not by adding them.''