Yale UniversityP.O. Box 2038New Haven, CT 06521-2038

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PAIDNEW HAVEN, CTPERMIT NO. 526

campaign annual report2009–2010

Dear Friends,

I am delighted to bring you the Campaign Annual Report for 2009–2010, a year

of extraordinary accomplishments. This June, your cumulative Campaign giving

surpassed $3 billion, taking Yale Tomorrow to its original fundraising goal in just

four years and setting us firmly on course to reach our revised $3.5 billion goal by

June 30, 2011.

During this time of constrained budgets, your generosity is especially welcome.

Campaign contributions have an immediate impact on teaching and research at

Yale, helping to close the gap in our financial aid funding and relieving the pressure

on budgets across the University. Thanks to you, students and faculty members

can remain focused on their dual mission of education and innovation.

For example, in Yale College, a donor is enabling biologist Jo Handelsman to develop

a pioneering approach to teaching science; others have supported expanded language

instruction in Sanskrit, Tamil, and Hindi, adding an important dimension to our

curricular coverage of India and South Asia. And construction is well underway at

Ezra Stiles College, the last of Yale’s twelve residential colleges in line for a roof-to-

basement renovation.

With donor support, workers also broke ground this spring on a new home for the

Yale School of Management, clearing the way for a Foster + Partners building that

is destined to be a campus landmark. Other gifts this year are funding programs in

the Yale Repertory Theatre, fellowships for international students in the School of

Forestry & Environmental Studies, and an endowed chair for the director of the

Yale Cancer Center.

These are but a few examples of your contributions. They touch every area of the

University, and sustain the work of faculty and students. The Campaign is an e≠ort

to build an even greater Yale for tomorrow, and I am deeply grateful that alumni,

parents, friends, foundations, and corporations continue to advance this goal.

Sincerely,

Richard C. Levin ’74 ph.d.

From the President

3

Dear Friends,

Conventional wisdom holds that the fourth year of a capital campaign is the most

challenging. So we are all the more pleased to recognize the steadfast support that

pushed the Yale Tomorrow campaign over $3 billion this June, at the end of its

fourth year.

For the past twelve months, despite the economic recession, donors have shown

extraordinary loyalty to the University with giving focused in two broad areas—

first, ensuring the resources to sustain the highest standards in today’s research and

learning; and second, providing new funds to continue Yale’s leadership tomorrow.

In fiscal 2009–2010, giving reached $317.3 million, bringing the Campaign total

to $3.026 billion, or 86.5 percent of its goal. As President Levin has pointed out,

contributions from alumni, parents, and friends supported every area of the

University.

Looking ahead, we are excited to be part of such a historic e≠ort as we gear up for

the final year of Yale Tomorrow. We are confident that this wonderful community

will rise to the challenge once more to meet and surpass our $3.5 billion goal by

June 30, 2011.

The following pages o≠er details of this year’s fundraising results and further

acknowledge the many donors who made this milestone possible. To all of Yale’s

supporters and volunteers, thank you. With your generous participation, we are

building a bright tomorrow for our University.

From the Campaign Co-Chairs

G. Leonard Baker, Jr. ’64

Edward P. Bass ’67

Joshua Bekenstein ’80

Roland W. Betts ’68

Susan M. Crown ’80

4

campaign annual report 2009 –2010

The Financial Story

In fiscal 2009–2010, Campaign gifts played an important role in funding core

academic programs across the Yale campus. Alumni, parents, and friends were gener-

ous despite the recession, supplying new resources for teaching and research as well

as funds for financial aid, an area of growing need. All told, donors provided $317.3

million in new gifts and pledges during the period July 1, 2009–June 30, 2010.

An important contribution to this year’s Campaign total came through annual

giving, which generated gifts of over $30.5 million, up by more than $1.5 million

from 2008–2009.

Reunion giving, always a source of pride for Yale College classes, was also up in

2009–2010. The Class of 1975 achieved an all-time record for a 35th reunion, raising

more than $37 million; the Class of 1980 achieved a record for its 30th reunion with

$34 million; and five other classes moved up to the top ten, all-time, for their respec-

tive Yale reunion gift totals. To all, we extend our heartfelt thanks!

5

“I am deeply grateful for the dedi-

cation of Yale alumni, parents,

and friends. Giving in 2010 has

not only supported faculty and

students, but also set us on a course

to reach and even surpass our

Campaign goal by June 30, 2011.”

Inge T. Reichenbach

Vice President for Development

Report from the Vice President for Development

Through the close of 2009–2010, the Yale Tomorrow campaign stands at $3.026 billion, or 86.5 percent of its $3.5 billion goal.

$630

$3.026

$1.147

$1.699

$2.299

$2.719

million

June 30, 2005 June 30, 2006 June 30, 2007 June 30, 2008 June 30, 2009 June 30, 2010

billion

billion

billion

billion

billion

Cumulative Campaign Giving

The generosity that buoyed the Yale Alumni Fund in 2009–2010 was evident in every area of the Campaign, with steady support from individual donors as well as corporations and foundations. Current use giving accounted for 59.0 percent of contributions, reflecting a deep appre-ciation of Yale’s immediate budgetary needs. A further 24.3 percent of gifts were directed to the Yale Endowment, supplying resources for students and faculty today and well into the future.

6

The annual Campaign total—a measure of gifts and new pledges—declined compared to last year, but the annual cash total was up, reaching $383.5 million. This figure reflects actual cash revenues flowing to Yale in 2009–2010 from Cam-paign gifts and multi-year pledge pay-ments, a positive trend moving into the last leg of the Yale Tomorrow campaign.

Campaign Giving by Source2009–2010

Alumni60.2%$191.1 million

Foundations15.8%$50.1 million

Other Individuals10.1%$32.2 million

Other Organizations6.7%$21.2 million

Corporations4.8%$15.0 million

Parents2.4%$7.7 million

Areas of Campaign Giving2009–2010

Endowment24.3%$77.0 million

Current Use59.0%$187.4 million

Facilities9.7%$30.6 million

Designation Pending7.0%$22.3 million

Annual Cash Total

2005 2006 2007 2008 2009 2010

$290.2

$440.2

$395.7

$492.8

$367.9 $383.5

Figures reflect totals as of June 30 each year | Totals are shown in millions of dollars *Campaign early commitments

Annual Campaign Total

2005 2006 2007 2008 2009 2010

$38.0*

$591.0

$517.1$555.7

$603.0

$433.9

$317.3

campaign annual report 2009 –2010

After a 24.6 percent decline in 2008–2009, this year’s positive return is cause for optimism. What were the highlights of Yale’s investment per-formance in 2009–2010?The most compelling performance came

from our marketable equity, absolute

return, and private equity asset classes.

Domestic equity returned 20.9 percent

for the fiscal year, surpassing the bench-

mark return by 4.7 percent. Yale’s foreign

equity and absolute return portfolios

bested their benchmarks with returns

of 15.0 percent and 12.4 percent, respec-

tively. Private equity rebounded from a

challenging fiscal 2009 to post a return

of 18.1 percent.

Other endowments posted better returns than Yale this year. Why is that?While Yale did well in many areas, its

relative performance su≠ered from a

large exposure to real assets. These

assets, comprised of real estate, oil and

gas, and timber, produced the Endow-

ment’s weakest results for the second

successive year, generating a loss of 4.5

percent. While real assets provide protec-

tion against inflation, which may prove

beneficial in today’s highly uncertain

global economy, in weak economic

environments they tend to produce

poor returns.

Are you planning to make any significant changes to your invest-ment approach?Returns over the past two years fall

within the expected range of outcomes

of an investment strategy that has pro-

duced handsome results for Yale (and

many other endowed institutions) over

the past two decades. This approach has

placed the University in the top tier of

institutional investors, and we believe

it will serve Yale well in the future.

What are Yale’s longer term results?Yale’s Endowment returned 8.9 percent

per annum over the ten years ending

June 30, 2010, surpassing results for

stocks, which returned negative 0.7

percent annually, and for bonds, which

returned 6.5 percent annually. Relative

to the estimated 4.0 percent average

annual return of college and university

endowments over the past decade, Yale’s

One year after sustaining investment losses of almost a quarter of its value, Yale’s

Endowment rebounded with a gain of 8.9 percent for the fiscal year ending June 30,

2010. Its value rose from $16.3 billion on June 30, 2009, to $16.7 billion on June 30,

2010, including adjustments for operating budget distributions and new gifts. During

the most recent fiscal year, the Endowment distributed $1.1 billion to the operating

budget, or 41 percent of Yale’s net revenues. David Swensen, Yale’s Chief Investment

O∞cer, discusses the year’s Endowment performance and its impact on University

operations.

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The Endowment Picture

Endowment Funding Support2009–2010

Maintenance4.0%

Books3.2%

Unrestricted25.5%

Miscellaneous Specific Purposes26.1%

Scholarships17.5%

Professorships23.7%

of other programs. Over the years, the

contributions of donors and investment

performance on those contributions have

expanded Yale’s Endowment dramati-

cally. Every gift matters.

Consider this: in 1950, Yale’s Endow-

ment was $132 million. Without sub-

sequent gifts, if that $132 million were

grown by each year’s investment per-

formance and decreased by each year’s

spending, Yale’s Endowment would be

worth roughly $3.8 billion. If you include

the impact of gifts and the investment

performance of those gifts, you get to

Yale’s actual Endowment value of $16.7

billion. The nearly $13 billion di≠erence

represents the impact of donations

over the past six decades. Those gifts

influence in a profound manner the

experience of each individual in Yale’s

community of scholars.

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$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Effects of Investment Performance on Gifts

Growth of $100,00 scholarship from 06/30/2000 to 06/30/2010 (excluding new contributions and spending)

00 01 02 03 04 05 06 07 08 09 10

Yale EndowmentMean of Broad Universe of Colleges and Universities

investment performance added $7.9

billion of value in the form of increased

spending and enhanced Endowment

value. During the ten-year period, the

Endowment grew from $10.1 billion to

$16.7 billion.

What does this mean for Yale faculty and students?To put the performance in concrete

terms, consider an endowed scholarship

fund. When considering only investment

gains, an endowment valued at $100,000

in 2000 would have grown to almost

$235,000 in 2010, a performance well

above the mean of the broad universe

of colleges and universities. When

spending is factored in, the $100,000

fund would have grown to $154,000 in

2010 and distributed over $64,000 for

financial aid.

From a big picture perspective, spending

from the Endowment for the University’s

2010–2011 fiscal year amounts to $986

million, representing approximately 38

percent of the University’s net revenues.

Endowment distributions to the operat-

ing budget have grown nearly threefold

in the last decade.

How have donors contributed to the Endowment?On a cash basis, donors gave $136 mil-

lion to the Yale Endowment during the

past year, including gifts in support of

financial aid, faculty salaries, and a range

Impact of Gifts to the Endowment1950–2010

$0

$5

$10

$15

$20

$25

50 60 70 80 90 00 10

Actual Endowment market value1950 Endowment without subsequent gifts

Totals are shown in billions of dollars

$0.132

$16.652