Chapter 4: Fund Raising and Financial Planning

[The original $6 million pledge by Harold F. Johnson made Hampshire College a reality. He absolutely refused to have the College named for him, but the Trustees gave him "the bum's rush" (according to Toby Dakin), and named the Library for him instead.]

Harold F. Johnson

An interview with Van Halsey, first Director of Admissions at Hampshire College, January 1981.

Johnson: I had been floundering around wanting to do something with money which I had gotten rather quickly and not much through my own efforts, in other words through the stock market, and I thought I should put some of it back into the mainstream and my first interest was in population, which I thought was the scourge of the world. Increase in population. But I soon found out that was too big for me to dabble in.

Halsey: When you talk about your interest in education, where did that come from? I mean, had you always been interested in education?

Johnson: No...I was just a do-gooder. I thought first that population was going to impoverish the world. And secondly, I thought...that education could be lifted to the higher level and bring out more leaders. That was the best thing that I could do and the only thing I had to work with.

Halsey: How did it come about?

Johnson: It started with Henry Heald...who was the head of the Ford Foundation...it was he who said, "You know about this thing up in the Connecticut Valley?"

Halsey: Oh, the long range report, the New College Plan that had been done.

Johnson: Yes...I had a copy of it...And he said, "You know nothing has ever practically been done about it. Each one of these presidents has great pressure on him to use any money they get on their own college, which is natural...So, why don't you see if they're still interested in the proposition?" And I said, "Well, I'm interested in education, right after population." He said, "I will get in contact with the four presidents and see if it is a live notion in their minds now, without mentioning your name or your purpose." So he did that and he reported to me that they all thought that it was a fine idea.

Halsey: So he called you back and said...

Johnson: "They all think it is a great idea, they'd like to do it, but they don't see any way of going about it." So finally I said I will put up an initial amount of money to make it credible, and I would like to do it...We didn't know how much it would cost. I said that the amount of money that I had available to donate or make use of then was about $6 million. $6 million sounds like a trifle now; then it had enough clout to be impressive. And so that started the thing off.

Halsey: And you had looked at the New College Plan?

Johnson: I had it.

Halsey: Were you enthusiastic when you read it?

Johnson: I was.

Halsey: Was there anything in there that really struck you in terms of innovativeness or anything new that wasn't being done?

Johnson: Well, I was always against tenure. That seemed to me to be a load on any college. The advantage of starting without tenure and not acquiring it was important. Then I thought the waste in athletics was a drag on the strength of any college...I'm not disinclined to athletics, but I felt that a new college should not divert any money or interest in that direction.

Halsey: It seems to me that in the late 50's there was a good deal of talk...about the rising population and the people wanting to go to colleges, and the private colleges weren't expanding. Was there any of that in the background of starting Hampshire?

Johnson: No, that was not a moving idea...it was to keep it as clean as possible and as close to the project lines as possible. So as to see if the small classical college was as good as it should be. It was to be a model by which we determined the achievements of other colleges of that same size.

Halsey: And you didn't think that that could be done at Smith or Amherst or Mount Holyoke or the other colleges already there?

Johnson: No, it never occurred to me to simply add to them. I thought that that would minimize the effect of the amount of money.

Halsey: It was always assumed that it would be a separate, completely separate operation.

Johnson: I didn't want it for my glorication. But I did want to see the thing go, and I hoped I was going to be able to help it more as time went on.

Smith, Kline and French

March 6, 1969
To: Charles Longsworth
Elizabeth Wheeler
From: David Matz
Subject: Smith, Kline and French

On Friday, February 28, I visited the offices of Smith, Kline and French. I arrived at the ground floor lobby of their building at 8:45, was told by the receptionist that the Executive Secretary of the Foundation, Mr. Frederick H. Osborne, Jr., was not yet in, and that I should have a seat. I asked for a copy of the annual report, and for directions to the men's room. While using the latter, I learned from the former that Smith, Kline and French no longer supports programs at the undergraduate level. As I was digesting this piece of information, the men's room door opened again, and in walked a humorless, 60-year-old man wearing an overcoat. He announced himself as Mr. Osborne, indicated that Smith, Kline and French no longer gave money to undergraduate colleges, and thanked me for coming by. Gathering together what little dignity I had at the moment, I asked if he was interested in talking about an institution with an undergraduate science program focusing on human biology. He expressed interest in "reading about it", said he had another meeting to go to, and went.

[The College's first formal accreditation was done in 1974. This report was the first real opportunity to look back in some organized way to see how the experiment was progressing, in the light of the real experience of students, faculty, administration and staff. This excerpt concerns the financial situation of the College. Click here to download a pdf of the entire Self Study Report.]

Seeking Financial Stability. In: Self Study Report.

January 1974.

The basic funding strategy adopted was to finance all capital requirements, the planning period, and planned deficits from gifts and low interest loans, hence to operate primarily on the income from tuition and fees...

Although many features of the financial position of the College have shifted through time, three are especially important:

Faced with a combination of rapidly rising construction costs and the total decline of federal funding for dormitory construction, the Trustees accepted President Longsworth's recommendation in the fall of 1972 that the College enrollment be stabilized at 1,250 residential capacity rather than 1,440 for at least three years.
Faced with inflation of the cost of services at nearly twice the rate expected, with diminished expectation of being able to pass these costs on to students, the Trustees voted in June 1970 to instruct the President to hold the total instructional budget to a steady state level which, given a commitment to competitive salary scales for faculty, would provide for a ratio of faculty ranks of one full professor, two associate professors, and four assistant professors assuming a student-faculty ratio of 16:1.
Faced with a near unanimous commitment from faculty and staff assembled in 1969-70 to the value of striving for a student body composed of persons drawn from the full range of family incomes, extraordinary efforts were made to provide financial aid for students at better than three times the level projected. The budget for fiscal 1974 provides $510,000 for an enrollment of 1,250.

The positive features of the financial condition of the College may be summarized as follows:

Student tuition and fees do account for a very high proportion of expenditures as orginally planned (in 1973, 92%; estimated for 1974, 88%)
The use of "lump sum" budgeting, which places discretion over expenditutes at the unit level, in combination with line-by-line open budget-making processes, has resulted in highly efficient stewardship of funds in most instances.
The educational experiments at Hampshire have proved sufficiently appealing to gain the support of outside funding sources.
Five College cooperation has demonstrably provided real benefits to the College.

The negative features of the situation may be summarized as follows:

It is clear that student fees cannot carry the entire burden of income, nor does added funding for programs provide relief.
The steady decline of federal participation in financial aid to students means we have reached, or may be beyond, the limits of such funding which can be borne by fees and income.
The limit of the instructional budget creates pressures on the student-faculty ratio, reappointment process, and capacity of the College to foster career development services for faculty.

The channeling of these pressures into constructive channels is proving difficult...

We have experienced serious difficulties in providing fiscal services for general operations during the past two years, primarily due to the practice of permitting service demands to run somewhat ahead of staffing capacity while developing new machine-based systems. (p.7-10)

Projections for the next five years are certain to be as wide of the mark as those of the past. Still it is clear that we must:

develop endowment to cover certain categories of "fixed" costs.
improve fiscal services and stabilize student income flow.
generate more funds for the instructional budget.
achieve a reorganization of the income base for financial aid.
steadily increase the flow of outside funding for research and development projects.
complete the capital requirements of Hampshire's campus. (p.10-11)