UP CLOSE: The donor game

The donor game

Published on April 27, 2018

In 2010, Yale held a CEO Leadership Summit at the Waldorf Astoria Hotel, a luxury hotel in midtown Manhattan that, at the time, was owned by Blackstone — a global asset manager and one of the world’s largest private equity firms, founded by business mogul Stephen Schwarzman ’69.

During a panel discussion, Schwarzman gushed that the University played a pivotal role in shaping his character. Standing before the crowd, then-University President Richard Levin jokingly said that he hoped Schwarzman might give a donation to help shape the University as it had shaped him, according to a Blackstone spokesman and an attendee at the panel discussion. Levin told the News on Thursday that he did not remember making the comment but that it is “entirely believable” that he did.

At the time, it was an open secret that Yale had long been courting a donation from the multibillionaire; the University had been pulling at Schwarzman for more than a decade.

In June 2008, the Yale Corporation approved the construction of two new residential colleges — a logical next step in what was considered by administrators as the inevitable expansion of Yale College. Almost a year before the University announced the expansion, Blackstone went public, and Schwarzman made $5 billion in 2007 alone.

Levin and Schwarzman began talking about the new residential colleges in September of that year — before the colleges’ formal announcement. Hoping to secure a $125 million donation, Levin offered to name one of the new residential colleges after Schwarzman. He accepted on the spot.

Over the next few months, the two had three meetings. But shortly after the last one, the Corporation decided that no college would bear the name of a living donor, and Schwarzman walked away from the gift.

Levin declined to comment on the conversations about a residential college gift, which he called “private details,” but said that Schwarzman has “fairly strong ideas of what he would like to give money to and under what terms.” Former Vice President for Development Inge Reichenbach said Schwarzman never said, in her presence, that he did not donate because a college would not bear his name. But, “of course,” she said, they had discussed the possibility of his helping finance the new colleges.

Schwarzman declined to comment directly for this story, but a Blackstone spokesman said that Schwarzman — who in 2015 gave $150 million to finance the transformation of Commons dining hall into the Schwarzman Center, intended to be a hub of student life — was “proud” to join a long line of Yale donors, adding that the gift will “enhance the student experience.”

Indeed, while Schwarzman ultimately gave a major gift to Yale, for every Schwarzman, there are four other potential donors who — despite the University’s best efforts to sell its projects and mission — never give a gift of the same magnitude, said former Vice President for Development and Alumni Affairs Terry Holcombe. The complex process of courting major donors can involve years’ worth of meetings, newsletters, phone calls and fundraisers.

Much of that process, though, goes on behind closed doors. Confidential records of the conversations that lead to handshakes, agreements and dedication placards are all kept in a database at the Church Street office.

Names like Schwarzman, Sterling, Beinecke and Smilow adorn some of the most prominent buildings on Yale’s campus. But the tug-of-war with Schwarzman raises the question — how much influence can money buy?


The Yale Office of Development, a roughly 225-person operation, overlooks campus from its high rise across the New Haven Green. The development office handles the vast majority of donations and donor stewardship. Volunteers and class representatives serve as liaisons to the University, and staff members work with faculty members and administrators to translate University priorities into pitches for potential donors.

The process begins with research. First, members of the development office scour the internet and public sources to identify Yale’s next Schwarzman. They also collect information by other means. According to Levin, the development office keeps records of every conversation with potential donors — from correspondences with deans to campus visits. Briefings on potential donors include write-ups on their careers, interests, connections to and time at Yale and involvement in civic organizations or other philanthropy. Most briefings are about three pages long. For donors who interact directly with the University president, briefings run about eight to 10 pages — but others can be as many as 30 pages long and include background information and news clippings.

According to Michael Regan, a longtime development administrator and former senior research analyst at Yale, these briefings include as much information as is available, even details such as who the potential donor’s spouse is, how many children they have and where the children go to school. The goal, he said, is to collect all publicly available data.

Institutions like Yale can also outsource information-gathering work with the help of electronic research firms that aggregate information about alumni and potential donors. According to Holcombe, who has served as a fundraising consultant, research today, with screening and algorithms, is far more technical than in the past.

“[The research firms are doing] the same thing that Facebook does,” said Holcombe, referring to the recent controversy surrounding the purchase of large quantities of Facebook data by Cambridge Analytica. “They collect a lot of information at random and try to make that available to people.”

Vice President for Development Joan O’Neill emphasized that the detailed briefings allow development officials and administrators to pick up where their colleagues have left off.

In an email to the News, O’Neill said that prospect research adheres to Apra industry guidelines for ethics and social media ethics, which, among other standards, caution against creating fake profiles and advise institutions to set internal guidelines for sharing confidential data.

After the research phase come conversations with prospects. In these conversations, O’Neill said, staff members first present the University’s vision for the potential donation and then discuss how the University “can recognize” the donor with a plaque, program, building or the name of a chair. Each “rated prospect” — someone who the University hopes will give more than $100,000 over time — is assigned a primary staff member who visits them on a regular basis, O’Neill said.

In an interview with the News, University President Peter Salovey discussed the three stages of his conversations with donors. In the first, Salovey gets to know the donor and their passions. In the second, he puts the needs of the University on the table. And in the third and final stage, he juxtaposes what excites a donor with those needs. At that point, depending on the complexity of the project, the University may draft a formal written agreement spelling out the timeline and purpose of the gift.


Conversations between Schwarzman and high-up development officials began in the late 1980s, when the University’s development office realized that he would one day have the resources to donate a substantial gift. Yale degree in hand, Schwarzman got off to a quick start on Wall Street after graduating, fast establishing himself as a finance tycoon and amassing billions of dollars.

According to Levin, Schwarzman gave his first major donation to Yale in the early ’90s, at his 25th reunion, soon after Levin became University president. Early on, Levin thanked Schwarzman for his generous gift, beginning a long relationship during which the two met “quite frequently” during Levin’s 20-year presidency, he said. Although Schwarzman made a number of smaller contributions, he and Levin could never quite work out a major project that “caught his fancy,” Levin said. Schwarzman had made it clear that he hoped at some point to make a substantial donation, Levin said. But despite a yearslong back-and-forth between the two, Levin said, they never reached an agreement.

In 1998, as first reported by The New Yorker, Yale offered Schwarzman the naming rights to Commons in exchange for a $25 million donation. Schwarzman agreed to give $17 million, but the gift came in the form of an investment in Blackstone, not a liquid cash donation. Schwarzman did not then have the resources to donate that much, so he offered a smaller donation to be invested in Blackstone funds with the potential to yield the higher sum, according to a Blackstone spokesman. But, under that arrangement, Yale would not have received anything until the investment was liquidated, and the University told Schwarzman that it did not allow outside entities to invest on its behalf. Schwarzman never gave the $17 million.

Yale’s refusal to name one of the new residential colleges after Schwarzman in 2008 left him further frustrated, according to two sources close to Schwarzman.

After the residential college conversations fell through, Levin did not approach Schwarzman for a major gift again during the five remaining years of his presidency, according to a Blackstone spokesperson.

Schwarzman took on several other philanthropic ventures before giving his principal gift to Yale. In 2008 — the same year that the potential donation to the new colleges slipped through the cracks — Schwarzman contributed $100 million to the New York Public Library, which renamed its main building the “Stephen A. Schwarzman Building.” The library displays his name in five different locations.

Years later, Schwarzman finally got his name on a residential college — not at Yale but at Tsinghua University, which hosts the Schwarzman Scholars, a program founded by Schwarzman and modeled after the Rhodes Scholarship at Oxford. Like the two new colleges at Yale, Pauli Murray College and Benjamin Franklin College, Schwarzman College was designed by Robert A.M. Stern, the former dean of the Yale School of Architecture.


Not long after his inauguration in 2013, Salovey approached Schwarzman with several gift opportunities, including a donation to West Campus. Schwarzman was uninspired, though, according to a Blackstone spokesperson. Weeks later, he asked Salovey whether Yale was still considering renovating Commons, a tentative project he had discussed years ago with Levin. Schwarzman told Salovey he wanted to do more for the space than just finance renovations, and so began conversations about the Schwarzman Center at Commons.

Last November, Salovey told the News it was he who had approached Schwarzman with the idea. But in an email on Thursday, he corroborated the Blackstone spokesperson’s account that the idea to transform Commons with a major donation was Schwarzman’s, adding that the performing arts and student center “evolved from [their] conceptual conversations regarding what that renovation might entail.” Salovey said that he did pitch the project at one point, but that there were many discussions leading up to that proposal.

Dean of the Divinity School Gregory Sterling told the News that Salovey intimated to the University Cabinet that Schwarzman might donate a large amount to Yale for a student center. But the Cabinet did not receive additional details until after Schwarzman committed, Sterling added. According to Salovey, the Cabinet is not part of the process used to vet new gifts.

In May 2015, Yale finally gave Schwarzman naming rights to Commons. The University announced that the Blackstone founder — whose net worth then totaled $11.6 billion, according to Forbes — had donated $150 million to Yale, the second-largest single donation in the University’s history, behind only Charles Johnson ’54 — who donated $250 million to fund the construction of the new colleges, one of which the University named after Johnson’s personal hero, Benjamin Franklin. Schwarzman’s gift would go toward the Schwarzman Center, intended to be a hub of student life on campus for undergraduate, graduate and professional school students.

Now, Salovey speaks with Schwarzman at each new phase of the Schwarzman Center planning to receive input and provide background information.

“[Schwarzman’s] input is helpful to us really about any aspect of the project,” Salovey said. “He’s someone with a very good eye — particularly to both the aesthetic and functionality of the project.”

Schwarzman’s landmark donation drew its fair share of controversy. A survey distributed by the News last August found that faculty members largely opposed the construction of the Schwarzman Center. And several students expressed discontent with Schwarzman’s ties to President Donald Trump — Schwarzman served as chair of the Strategic and Policy Forum, a White House business council. On Tuesday, he and his wife attended the state dinner for French president Emmanuel Macron.

But in the face of controversy surrounding both gift and giver, Salovey has maintained his defense of Schwarzman. When asked about criticism of the Trump connection in an interview with the News in March 2017, Salovey lauded Schwarzman’s commitment to public service. And Salovey sent a letter of gratitude to a conservative columnist for the News who in April 2017 penned an op-ed defending Schwarzman.

Last April, the News published a story chronicling some of Schwarzman’s controversial business dealings. After publication, while Salovey was traveling, Vice President for Communications O’Connor and the University President’s Chief of Staff Joy McGrath held an off-the-record meeting with then–Editor-in-Chief David Shimer ’18 and David Yaffe-Bellany ’19, one of the reporters on the story and current managing editor of the News. Yaffe-Bellany recused himself from working on this story.

Less than a week later, Salovey, McGrath and O’Connor called Yaffe-Bellany and Shimer in for another off-the-record meeting in the University president’s office at Woodbridge Hall. At the time of the almost hourlong meeting, Salovey was recovering from throat surgery and was only allowed to speak for a limited time each day. When asked in an interview with the News earlier this month why he called the meeting, Salovey said that he wants “the Yale Daily News to write stories that are accurate and fair.”

O’Connor said the meetings were called to discuss a pattern of reporting that the University “had issues with.” She called a third meeting at Mory’s to go through the piece line by line to argue that it was biased and included factual mistakes. In retrospect, she added, she should have held the first meetings without Salovey or McGrath because the “optics of this were bad.”

After the meetings, the News issued five clarifications on the piece, most of which served to tone down criticisms of Schwarzman’s comments and investing practices.

On Thursday, O’Connor put all three meetings on the record, allowing Shimer and Yaffe-Bellany to discuss them with the News.

In a statement, Yaffe-Bellany said that, in his first four months reporting on the President’s Office, Salovey never granted him an interview longer than 20 minutes. But the meeting with Salovey, O’Connor and McGrath in Woodbridge Hall lasted 45 minutes, he said. At the meeting, he added, the administrators insisted the News owed Schwarzman an apology. Yaffe-Bellany said it seemed like the three administrators were “running public relations interference for one of the wealthiest, most powerful men in the country.”

“We ultimately issued a few clarifications but no corrections to Yaffe-Bellany’s story following the April 17 meeting,” Shimer said in a statement of his own. “But my suspicion is that this unusually tense meeting — which was clearly and unfortunately meant to intimidate us — had less to do with inadvertent factual errors, which the News is always eager to correct, than with the pressure the administration was under.”

Founder of the Yale Journalism Initiative Steven Brill ’72 LAW ’75 also objected to the pressure he perceived Salovey to have put on the News, saying that it must have been intimidating for students.

“I was quite concerned that the University was putting the wrong kind of pressure on the newspaper … [by] expressing a concern for someone just because he was a really significant donor,” Brill said. “Was the bar that you had to contribute 150 million dollars to the University to get the president of the University to go to bat for you?”

When asked about Brill’s criticism earlier this month, Salovey initially declined to comment, saying that the University’s attitude toward donors who finance major projects should be “one of gratitude.” On Thursday evening, though, Salovey said his conversations with the News last April concerned what he saw as factual inaccuracies the reporters could have avoided if they had reviewed publicly available material. He added that Yale corrects inaccuracies appearing in the media about faculty members, staff, alumni and students frequently, regardless of donor status.


The closest the vast majority of Yale’s donors get to the University president is during his address over Alumni Weekend. But occasionally, potential donors sit down with the University president to discuss significant contributions — or decisions by the president that they find objectionable.

According to a former development officer, Salovey held a cross-country tour to introduce himself to all the University’s top donors before he even took office. O’Connor said Salovey traveled to cities across the country to visit Yale Clubs and likely held several meetings with donors as part of an effort to introduce himself to the wider Yale community.

But fundraising was not always a core component of the University president’s job. According to former University Secretary Sam Chauncey ’57, former University President Alfred Whitney Griswold spent just 10 percent of his time in conversations with potential donors. Later, former University President Kingman Brewster devoted twice as much time to donors, Chauncey added.

“[Salovey’s cross-country trip] shows that the role of the president has changed dramatically,” Chauncey said. “The president [previously] spent a lot more time dealing with major educational issues [and] faculty recruiting.”

For Levin, though, fundraising is “an art” — it’s about listening, winning a potential donor’s confidence and positioning the University’s projects to most effectively pique their interest. An effective fundraiser must be patient “to observe the donor’s lifestyle and rhythm of giving, so it’s not a one-shot deal,” Levin said. Fundraising at Yale is about cultivating supporters for a lifetime of giving, not just one gift, he added.

Whitney MacMillan ’51, an heir and former CEO of Cargill who with his wife funded several new professorships and other projects in international studies, said that, for about two decades, he did not give Yale a cent after Yale changed its undergraduate recruiting strategy. But in time, once the University reverted to its original recruitment strategy, he changed his mind and gave what Levin described in 2006 as “one of the largest gifts Yale has ever received.”

“They’ve always been trying to raise money from me, but they never had a project, so I finally suggested they consider competing with Harvard or Princeton [with an international center],” MacMillan said. “And Rick Levin thought that was a great idea.”

He added that Levin decided to rename the Yale Center for International and Area Studies to honor the donors. The center later became the Whitney and Betty MacMillan Center for International and Area Studies at Yale.

Now, MacMillan sees Salovey at a Yale event in Minneapolis or Florida every other year. And he usually lunches with Macmillan Center director Ian Shapiro or other faculty members when he returns to campus for ice hockey reunions. Still, he said he has no intention to give to Yale again.

Most major donors keep in regular contact with development staff and are paid visits by the University president. In the meantime, donors also converse with other administrators, who Salovey has urged to up the time they dedicate to fundraising. But according to O’Neill, Schwarzman tends to converse directly with the University president, although he has relationships with administrators across the University, Salovey said.

In an interview with the News, Salovey said he spends a quarter to a third of his time fundraising. At almost every meeting, a development official sits by his side. On average, Salovey said, University officials hold about seven meetings with a major donor before proposing a gift. In his experience, the number of meetings has ranged from one to 20. For Schwarzman, Salovey said, it is “impossible to say” how many meetings there were.


This year, the University opened its doors to a first-year class 15 percent larger than the one that preceded it. In a 2016 report and multiple conversations with the News over the past year, faculty members have expressed concerns that the expansion will overburden University resources if the administration does not increase faculty hiring and address other broader educational issues. Meanwhile, the Office of Development has been steadily expanding, as administrators spend more and more time in conversations with donors, Salovey told the News in March.

The increasing complexity of the development process has prompted a 20-fold growth in the once diminutive fundraising office. In the 1960s, fewer than 10 people worked on the fundraising team at Yale, according to Chauncey. And when Holcombe, the former vice president for development, first joined Yale in the 1970s, the University had no formal development office. Volunteers worked on the alumni fund, and the development staff comprised just a few people. But in 1974 the office launched the University’s first major capital campaign — which had a fundraising goal of $370 million dollars — and gradually built up a development office that from that point on would operate on a more professional basis, Holcombe added.

And yet, despite the increasing size of the Office of Development and the ongoing effort to prepare for the next campaign, the University ranks relatively low in fundraising, compared to peer institutions. In 2017, Yale ranked ninth, raking in $595.89 million — less than half of the total accumulated by its Cambridge rival, according to the Council for Aid to Education.

While the University’s ranking is rising — Yale placed 15th in fiscal year 2014 — it still has a ways to go before it can compete with Harvard University or Stanford University. Increasing the size of development staff takes time, and officers have to build relationships from their portfolio, O’Neill said.

Comparing Yale’s fundraising totals with those of peer institutions is not exactly “comparing apples to apples,” Salovey said. For one thing, he said, many other schools own their hospitals, and some peer institutions may also have larger alumni bases and business schools, which draw more funding. The business schools at Stanford, Harvard and Wharton generate sizable donations for their respective universities; Yale’s School of Management, by comparison, is smaller and younger.

According to Martha Woodcock, a longtime Office of Development employee who in 2016 became a fundraising consultant, institutions like Johns Hopkins University, Harvard or the University of Pennsylvania have large research arms, which bring in sizeable donations from corporations and foundations. Yale’s primary source of giving is its alumni base, a much smaller pool of prospects, O’Neill said, which has prompted the Office of Development to add staff for nonalumni fundraising.

Harvard — which along with Stanford consistently tops the fundraising ranks — has raised more than $9 billion as part of its ongoing capital campaign, which began in 2013. By contrast, Yale’s last capital campaign, Yale Tomorrow, had raised just $3.881 billion when it concluded in June 2011.

The funding gap between Harvard and Yale is unlikely to close anytime soon. O’Neill said Yale’s next capital campaign is unlikely to raise a sum comparable those Harvard or Stanford have hauled in during their campaigns. At the moment, O’Neill said, Yale does not have the size, capability or prospects to run a campaign on the scale of Harvard’s $9 billion effort.

Speaking with the News, Salovey said that he wants to see Yale climb the institutional fundraising rankings. But to effectively move the dial in annual fundraising totals, O’Neill said, Yale will have to rake in more major gifts.


As the development office grows, staff members, new and old, may even now be working to identify the next Schwarzman or Johnson to finance Yale’s next big capital project.

For now, the long-standing history of Schwarzman’s relationship with Yale offers a window into how the University courts, negotiates and satisfies its most prized donors. And the process does not end with handshakes and contracts. Indeed, Levin emphasized, the University’s goal is to cultivate “supporters for a lifetime.”

Before conversations about the $150 million gift began, Salovey said, he did not know much about the conversations between Schwarzman and administrators before he became University president. He could not say for sure why it took the University years to secure the donation, but he emphasized that Schwarzman felt “an emotional connection” to the reimagining of Commons — a space in which he has said he fondly remembers dining during his college years. Ultimately, Salovey said, donors want their contribution to carry “personal resonance,” and for Schwarzman, the idea of a student center did just that.

Feet away from the hall where Schwarzman dined in the ’60s, a blue placard beside the entrance to Memorial Hall now designates the building as the Schwarzman Center. This summer, blue tape will cordon off the area, and workers in construction hats will begin bringing to life Schwarzman’s vision for a student hub. Schwarzman will serve as a trusted advisor to Salovey as he directs one of the biggest capital projects in Yale’s history.

“Donors who are giving nine-figure gifts are typically unwilling to simply leave a bag of money in your office and never speak with you again,” Salovey said. “That is just not the way it works.”

Hailey Fuchs | hailey.fuchs@yale.edu



Powered by