PFS Campus Update: Annual Giving Rate Plummets; Will Princeton Duck the Endowment Tax?; Free Speech at Orientation

Princetonians for Free Speech (PFS) now has over 16,000 subscribers, a large portion who are undergraduate alumni. The growth in subscribers over the last year has been dramatic, from 1,400 subscribers in December 2024 to over 16,000 today. We have now engaged a powerful and growing segment of the Princeton community.

 Our ambitious goal is to reach 20,000 alumni subscribers. A critical mass of voices on policy matters will help us put pressure on the administration to change policy and improve the free speech climate on campus.

Now, in addition to our regular weekly updates on news at Princeton and nationally, and our PFS Monthly Newsletter, we will be sending to our subscribers occasional Campus Updates on the most important happenings at Princeton. Here is our first Campus Update.

Annual Giving Rate Plummets

An interesting July 10 PAW article on annual giving participation reports a major decline in the participation rate by alumni in annual giving; it has dropped to 43.9%, the lowest in almost 80 years. In the article, Princeton officials try to downplay this drop, but it is a clear signal of unhappiness with the university’s direction. We suspect that some of the decline reflects the fact that recent graduating classes are larger, and younger graduates are less inclined to give. However, anecdotally, many alumni have told us that they have stopped giving to Princeton because of concerns about events on campus and the failure of the leadership to acknowledge that change is needed.

Will Princeton Duck the Endowment Tax?

An interesting article in the August PAW, Will Princeton Avoid Endowment Tax by Increasing Financial Aid?, points out a possible way for Princeton to avoid the endowment tax altogether. The top tax rate of 8% on investment income applies only to Princeton, Yale, Harvard, Stanford, and MIT. For the top rate to apply, a university must have an endowment of over $2 million per student. However, to be subject to the endowment tax at all, another requirement is that a university have over 3,000 tuition paying students. We presume this was to carve out a few small colleges.
  
It seems it would be easy for Princeton to put itself under the threshold of 3,000 tuition-paying students by expanding its financial aid packages, and in fact, the article implies it may already be there. Why wouldn't Princeton do this? It would save more in taxes than the extra cost of additional financial aid. Princeton, because of its smaller size and large endowment, is likely the only university subject to the top rate that can do this. It is doubtful that the authors of the endowment tax meant for Princeton to be excluded, and a Republican Congress might change this provision. However, it may not be easy to find a legislative vehicle to do this, at least until next year.  

Robust Free Speech Discussion at Orientation
   
As many subscribers know, PFS has long pushed for a robust free speech program required for new students during Orientation. In 2020, the year PFS was founded, Orientation’s focus on free speech and academic freedom was grossly inadequate. Since then, Princeton’s efforts to educate in-coming students on free speech improved, although PFS still has had concerns about some of the content of those efforts. We are pleased to report that, according to our student sources, the content of the free speech program this year, led by President Eisgruber and accompanied by Vice President Rochelle Calhoun, was very robust and positive. 

Notable commentary from our student sources – all incoming first-year students – includes:

• “President Eisgruber urged students to form groups among themselves to talk about different ideas and pushed for student political engagement, even if that means people are arguing in ways that are uncomfortable. He read large chunks of the U Chicago paper and expounded on concrete examples based on the categories of speech included in it, from riots to religious practices to political discussions.”
• “President Eisgruber maintained that unless someone utters clear hate speech or disrupts university programming, we will have the opportunity to air our opinions on campus. He stressed that we will often disagree with him, classmates, and professors, but that disagreement will provide some of the most fruitful discussions on campus.”
• “Walking back to my dorm after the presentation, a group of us talked about different things that had happened at Ivy schools, like Columbia, over peaceful dissent and discourse. So, at the very least, it got people thinking a bit and put free speech on our radar.”

While the content was largely positive, several students commented on the poor timing of the free speech address. One student stated, “Having his address be in the evening after three long days days of orientation where people have been partying late every night in the absence of classes may not have been the best way to have students absorb the material.” Another weighed in, stating, “I think the method of communication (two people having an hour-long discussion mildly orbiting President Eisgruber's new book which none of us have read) was a poor choice for antsy, sleep-deprived teenagers.”

The fact remains that, while students are learning more about the importance of free speech and academic freedom, our PFS annual survey of Princeton undergraduates and FIRE’s annual poll show that high numbers of students do not understand what free speech and academic freedom mean in practice. These polls consistently show that Princeton students lack a true understanding of free speech principles.