Federal contracts with Harvard are mainly with the Medical School and the School of Public Health Champion said.

"We don't have much Defense Department contracting and we don't have any classified contracting" he said. "MIT must have $30 million a year and I don't think we have more than three"

Under the new assuming system, each department of the University was assigned units worth $100 each in the general investment fund, according to how much each department had contributed to the fund through alumni gifts, tuition and other income.

By seeing how much the units value increases--they were up to $135 each in June, two years after the new system began--the department can tell not only how much the interest its investment is earning, but also how the investment's value has increased.

Under the old system, a fund's unspent earnings were plowed back into the general investment fund, so the fund did not grow as it would have with compound interest. A $1 gift given 200 years ago therefore earned no more interest than a $1 gift given recently.

Less Recent Gifts

By permitting such funds to grow, the new system gives greater weight to less recent gifts. In effect, it means that a donation, for a specific purpose today will be more important in 20 years than an equal donation then.

This conservative function of the unit system is not apparent yet, Champion said, and its possible existence has not affected the level of donations.

In fact, Champion said, the system has had little effect so far even on the distribution of money within the University. "What it's done is given everybody an understanding of what's happening, of which money does what job." Champion said.

"It hasn't changed the pattern, but it's made clear what it is," he went on