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The President’s Report on Philanthropy and Endowments 2012–2013
Ensuring Student Opportunity
Enhancing Honors Education
Enriching the Student Experience
Building Faculty Strength & Capacity
Fostering Discovery & Creativity
Sustaining a Tradition of Quality
Leah Eder (cover and opposite)
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Table of Contents Message from the President
2
Message from the Campaign Chair
4
Ensuring Student Opportunity
6
Enhancing Honors Education
8
Enriching the Student Experience
10
Building Faculty Strength & Capacity
12
Fostering Discovery & Creativity
14
Sustaining a Tradition of Quality
16
Concepts in Philanthropy
18
Philanthropy Awards & Honors
22
Endowment Overview
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University Budget Summaries
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Campaign Executive Committee
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Message from the President
Each autumn, The President’s Report on Philanthropy and Endowments shares Penn State’s fundraising results and endowment performance, but the numbers that appear in the following pages aren’t just the measure of a single year’s effort. They reflect a tradition of giving that dates to the founding of the Farmers’ High School on donated land. They represent a culture of philanthropy that has been building through three comprehensive University-wide campaigns over four decades. And they illustrate how, over the course of the last six years, For the Future: The Campaign for Penn State Students has inspired our alumni and friends with new excitement about what lies ahead for our institution.
President
Message from the Campaign Chair
You’ll find many other numbers in this report, but I want to share one that has deep personal meaning for me. When For the Future began, the faculty and staff campaign committed to securing $43 million in gifts from Penn State employees. Last year, they passed that goal and kept on going, aiming for a new target of $55 million. And, as they have risen to so many challenges, the University’s faculty and staff rose to that one, too. At press time, they have given more than $56 million to For the Future. I am prouder than I can say to lead an institution that inspires such generosity among those who know it best. Their support, and yours, will be a challenge to us not only through the rest of this campaign but through many years to come. Thank you.
Rodney A. Erickson, President The Pennsylvania State University Leah Eder
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Message from the
I am honored to report that as the campaign approaches its conclusion on June 30, 2014, the Penn State legacy of loyalty and support keeps growing. More than 193,000 donors—the largest number in our history—made gifts to the University in 2012–2013, and alumni giving rose by 23 percent over the preceding year. Many of our supporters were motivated by the students of THON, who broke their own record and raised $12.4 million for pediatric cancer research and patient care at Penn State Milton S. Hershey Medical Center. Others found their philanthropic purpose in the For the Future campaign’s focus on student support and pushed the Trustee Matching Scholarship Program past its original $100 million goal (see page18 for details on the program’s next phase). Whether donors created faculty endowments or gave to programs that exist because of gifts made in this campaign, they have helped For the Future to build momentum toward its $2 billion goal.
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The President’s Report on Philanthropy and Endowments
2012–13
Message from the Campaign Chair
The ticking of a clock, the flying pages of a calendar: In a classic movie, there are always shortcuts to suggest that time is passing fast. In a fundraising campaign, it’s harder to communicate how every day counts, especially as the end approaches. I can assure you, though, that when you receive this, those of us charged with leading For the Future: The Campaign for Penn State Students will be able to tell you how many weeks, maybe even how many hours, are left until June 30, 2014. It’s not just about reaching the most ambitious goal in the University’s history. It’s about the opportunity that the campaign offers to make a difference for our students and our institution. Each moment and every gift matter. At the same time, philanthropy isn’t just about the present—it’s about the past and the future, too. No one understands that better than Russell E. Horn Sr., who celebrated his 101st birthday and his 70th anniversary of graduating from Penn State this year. Russell entered the working world in the depths of the Great Depression. He knows the challenges that today’s graduates are facing, and he knows the value of a Penn State degree. His gift to a new center at Penn State Harrisburg will help generations of students to succeed, and he is among the donors we feature in this year’s President’s Report on Philanthropy and Endowments.
President
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Message from the Campaign Chair
Russell’s gift reflects the campaign’s Sustaining a Tradition of Quality priority, and each story highlighted in the following pages represents a key objective of For the Future: Ensuring Student Opportunity: A father who couldn’t afford to attend Penn State inspired his son to enroll—and to create scholarships for students in need. Enhancing Honors Education: A former honors student wants others to have their own great experiences at the University. Enriching the Student Experience: Even as they mourn a son and brother, a family celebrates his values through a new program that could change many lives. Building Faculty Strength and Capacity: Believing in the potential of an innovative field and department, an industry leader supports leaders to come. Fostering Discovery and Creativity: After more than five decades of helping patients, a medical pioneer says that endowing a faculty chair is the culmination of his career. As we track the minutes between now and the campaign closing, let’s remember that what we give now will make history: not only when we exceed the $2 billion goal of the For the Future campaign, but when Penn State students and faculty change our institution and the world with our support. Thank you.
Peter G. Tombros, Chair For the Future: The Campaign for Penn State Students 4
The President’s Report on Philanthropy and Endowments
2012–13
Leah Eder
Message from the
Philanthropic leaders use smart strategies to reach more students
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Ensuring Student Opportunity
Enhancing Honors Education
Enriching the Student Experience
Building Faculty Strength & Capacity
Fostering Discovery & Creativity
Sustaining a Tradition of Quality
Last year was a tough one for John Ginder. As a junior Kinesiology major at Penn State Berks, he was juggling a full course load, a volunteer position as a Lion Ambassador, and a part-time job at the bookstore. When he was hit with serious health problems, he had to cut back on his hours at work—hours that he has always counted on to pay for his education. “I come from a working-class family, and money can be very tight,” he says. “But because I received the Eugene and Eleanor Curry Memorial Trustee Scholarship this year, I knew that I was going to be okay. I could afford to stay in school and stay involved, and the scholarship made me feel that someone cared and that all the hard work and stressful moments of college are worth it.” That’s the message that Gene Curry Jr. ’59 Bus and his wife, Frances, hope that their support will eventually communicate to more than fifty undergraduates a year at Penn State Berks. Since 2000, the Sinking Spring, Pennsylvania couple has established three scholarship endowments for the campus: the Eugene R. Curry and Frances Franks Curry Scholarship, targeted to students with financial need and leadership qualities; the Eugene and Eleanor Curry Memorial Trustee Scholarship, which honors Gene’s parents; and the Gene and Fran Curry Trustee Scholarship, created just this year. “I was the first in my family to go to college, and my Penn State education has helped me to achieve all of my lifetime goals,” says Gene, a retired longtime broker with insurance leader Aetna Inc. and a co-chair of the Penn State Berks committee in For the Future: The Campaign for Penn State Students. “Fran and I want to make it possible for other students to have the same experience and live successful, productive, and happy lives.” The Penn State experience wasn’t available to Gene’s father, a Lewistown, Pennsylvania native who wanted to attend the University but couldn’t afford it. “He became a successful businessman, but he knew that it would be so much easier for Gene with an education behind him,” says Fran. “He really urged Gene to apply to Penn State.” Now Penn State has become a family tradition: One of the Currys’ sons, Sean, earned degrees in electrical engineering and computer science at University Park. The Currys are using every strategy they can to help other families begin their own
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The President’s Report on Philanthropy and Endowments
2012–13
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Gene Curry Jr. and Frances Curry (right), John Ginder (below right)
Penn State traditions. By capitalizing on matching funds from Aetna and from the University’s Trustee Matching Scholarship Program, Gene and Fran have been able to increase the impact of their giving. A bequest and a charitable remainder trust funded through disbursements from Gene’s retirement account will enhance their scholarship endowments after their lifetimes. The Currys’ support will help to address the financial challenges faced by Penn State Berks students. Located in a suburb of Reading, Pennsylvania, which the New York Times named the nation’s poorest city of its size in a 2011 article based on census data, the campus offers important educational and economic opportunities, but many families in the region struggle with the cost of tuition. In 2011–2012, more than 20 percent of Penn State Berks students came from low-income households, and seniors graduated with an average educational debt of almost $34,000. “We know that the need is great, and we feel a responsibility to do as much possible,” says Gene. “And we benefit, too. Philanthropy gives an added sense of purpose to our lives.”
Ed Kopicki
The Currys have been able to learn about the impact of their support firsthand through annual scholarship dinners and other events organized by the campus. Fran says, “It’s so rewarding to meet these students. Learning their stories and hearing their hopes for the future helps you to realize how much of a difference you can make.” That personal connection has meaning for Gene and Fran’s scholarship recipients, too. John Ginder and his parents met the Currys at a dinner last year. “To be able to shake their hands and thank them for their help was very special to me—one of the most memorable moments in my college career,” says John, who’s currently focusing on his senior year studies and his work as donor relations co-chair for Berks THON. “Penn State isn’t just an institution. It’s a family. Where I’m from, when times get hard, family sticks together and helps each other out, and scholarships, especially the one that I received from Mr. and Mrs. Curry, have been an important part of that for me.”
The President’s Report on Philanthropy and Endowments
2012–13
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A former honors student helps new generations to choose Penn State
Ensuring Student Opportunity
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Enhancing Honors Education
Jack Yoskowitz earned a psychology degree in 1989, and Joanna Urban finished her B.S. in biobehavioral health just a few months ago, but despite the almost twenty-five years between their Penn State graduations, they have much in common. Jack and Joanna both took advantage of the University’s wide range of offerings and opportunities, they both excelled as honors students, and they both benefited from private support: Jack was a recipient of the Class of 1916 Scholarship, and with his wife, Libby, he created the scholarship that helped Joanna to choose the Schreyer Honors College. “I had a fantastic experience at Penn State, and it’s been a springboard to a great life,” says Jack, who went on to Columbia University’s law school and is now a partner at Seward & Kissel LLP in New York. “Libby and I want to give other students the opportunity to experience everything that the University and its honors program have to offer.”
Enriching the Student Experience
Building Faculty Strength & Capacity
Fostering Discovery & Creativity
Sustaining a Tradition of Quality
8
The son of a New York City police officer, Jack was the first in his family to go to college. “The scholarship I received was a big factor in my decision to come to Penn State, and the University Scholars, which was the honors program at the time, gave me the access and flexibility to do so many different things,” says Jack. His gratitude for his Penn State education first led him to serve on the Schreyer Honors College
Matt Bellingeri
alumni society board and make yearly gifts to the college. As he prepared to celebrate his Penn State twenty-year reunion in 2009, he and Libby decided to increase those gifts and provide an annually funded scholarship for a Schreyer Scholar. “As an organizer of our reunion, I felt strongly that I should set an example of philanthropy, and I felt strongly that it should be a scholarship, which would go directly to students,” says Jack. “I had been making smaller gifts for years, but when you get to a stage of life where you have more, you can give more to those who are at a stage of life where they don’t have anything.” Scholarships like the Yoskowitzes’ are an important part of the financial aid package that the Schreyer Honors College offers to applicants. Each new Schreyer Scholar receives an Academic Excellence Scholarship, a merit-based award that provides $4,000—equivalent to just over 15 percent of the typical annual costs for an in-state student and just over 10 percent for an out-of-state student. When top applicants are considering full-tuition offers from other institutions, the additional support of the Jack and Libby Yoskowitz Honors Scholarship and similar funds can make all the difference, getting Schreyer Scholars to Penn State and giving them the freedom to “find the path that will help them grow the most,” says Libby.
The Jack and Libby Yoskowitz Honors Scholarship has already made a difference for Joanna Urban, the most recent recipient. A writer for the Daily Collegian and a volunteer for THON and the Women’s Leadership Initiative in the College of Health and Human Development, Joanna says, “Scholarship support really weighed my college decision-making in favor of the Schreyer Honors College. It’s allowed me to focus on my academics and broaden my horizons instead of working lots of hours. I have been able to be an active part of a community of smart, creative, and down-to-earth people who have a lot to give, and I’m ready to give, too.” Like Joanna, Jack and Libby have been impressed by the undergraduates of the Schreyer Honors College. “They’re doing great things with their lives, and they’re already contributing to their fields and their communities,” says Jack. “Other universities and other honors programs are really competing to get these students, and we are glad that our support can help them to choose Penn State.”
Ben Solomon
Jack and Libby are now endowing their award, even though they have three children of their own who will soon be considering colleges—16-year-old Noah, 14-year-old Justin, and 11-year-old Katie. “Saving for their education and supporting other students are two different buckets for us,” says Jack. “We’re lucky enough to be able to take care of our own family and help other families, too.”
Higher education is a philanthropic priority for the couple, and they make equal contributions each to year to Penn State and to Libby’s alma mater, the College of Wooster. “Jack and I feel strongly that you should give what you can, whenever you can give it,” says Libby.
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The Yoskowitz family (opposite), Joanna Urban (above) 9
Opportunity
Enhancing Honors Education
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Enriching the Student Experience
Building Faculty Strength & Capacity
Fostering Discovery & Creativity
Sustaining a Tradition of Quality
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“In a very short life, Bill had such a positive influence,” says his father, John Cahir ’61, ’71 PhD EMS. “He was always asking questions, trying to put a story into context, and using his great insights into the hearts of others to help them. If the students who participate in Project Cahir Corps can do the same, it will be a fitting remembrance of Bill and his belief that even without high rank, you can make a difference.” Bill Cahir grew up in State College—John retired as Penn State’s vice provost for undergraduate education in 2002, and his mother, Mary Anne Cahir ’63 Edu, is a former director of development for the University—and he earned a degree in English from his hometown institution in 1990. Bill went on to work for U.S. Senators Edward Kennedy and Harris Wofford before making the leap to journalism. He was writing for the Newhouse News Service when, motivated by the 9/11 attacks, he made his case for an age waiver and enlisted as a reservist in the Marine Corps. After two combat tours in Iraq, he ran for Congress in Pennsylvania’s 5th District. Although he lost in the primary, he remained committed to service, and he was working with the Marine’s 4th Civil Affairs Group when he was killed, just a few months before his wife, Rene Browne, gave birth to the couple’s twin daughters.
The President’s Report on Philanthropy and Endowments
2012–13
Matt Bellingeri
Ensuring Student
Communication. Understanding. Change. It’s a cycle of transformation that Bill Cahir advocated throughout his career in government and journalism and his service as a member of the Marine Corps. And when Sergeant Cahir was killed in Afghanistan on August 13, 2009, soon after successfully negotiating with village elders and military funding authorities to build a school for girls, his family wanted to continue that cycle in his name. Last year, their support launched Project Cahir Corps, an initiative that channels the interest and energy of Penn State students into addressing the problem of poverty.
Andrew Dunheimer
A new program remembers a Penn State hero and imagines a better future
a year, I’ve seen them develop a different perspective on poverty and a different perspective on their own ability to create systematic and sustainable change.” Kelsey Burton, a dual major in Accounting and French and Francophone Studies and one of the project’s first participants, learned not only how much she can do as an individual, but also how much collective effort can accomplish. “The opportunity to work with other students who are passionate about this overlooked issue was priceless,” she says. “I think that the plan we’re developing can really help in addressing the problem of affordable housing in this area. Project Cahir Corps is allowing a very small group of students to begin on a mission to make a very big change in our community.” “Knowing Bill Cahir’s story has made all of us—myself, the students, the University—even more committed to the success of the program,” says Emil Cunningham, a doctoral candidate in higher education and the adviser for Project Cahir Corps. The program began to take shape when Bill’s brother, Bart Cahir ’94 EMS, approached the Office of Student Affairs about honoring Bill at their alma mater, and the first group of twelve undergraduate participants, chosen by an advisory committee, started meeting with Emil in the fall of 2012. Through readings, discussions, and guest speakers, the students learned about poverty on the national and local level. By the spring, they were putting their knowledge into action with two hands-on projects: an outreach and education effort with community partners, including the Centre County Youth Service Bureau, and a strategic plan for affordable housing in the State College area, prompted by the closing of two mobile home parks.
“We had the opportunity to meet and speak with the students this year, and they have the intellect and the commitment to move Bill’s legacy forward,” says Mary Anne. “We are happy that it’s in their hands.”
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John and Mary Anne Cahir (opposite), Sergeant Bill Cahir in Afghanistan (left), Emil Cunningham and Kelsey Burton (above)
Courtesy of Mary Anne Cahir
“The goal is to get students engaged to the point where they want to be advocates both here in Centre County, while they’re still in school, and in the communities they’ll join after graduation,” says Emil. “Over the course of just
Creating Project Cahir Corps has been, like the program itself, a collective effort. Bart Cahir worked closely with the University to develop the program, and with his wife, Andrea, he is providing annual gifts matched by his employer, ExxonMobil, to get it off the ground. John and Mary Anne have created an endowment to ensure that Project Cahir Corps will continue to honor their son and communicate his values to Penn State students in perpetuity. They hope that other family members and friends will join in with more support, and they hope that the students of Project Cahir Corps will continue to evolve the program in response to the changing nature of poverty in the United States and Centre County.
The President’s Report on Philanthropy and Endowments
2012–13
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Opportunity
Enhancing Honors Education
Enriching the Student Experience
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Building Faculty Strength & Capacity
Fostering Discovery & Creativity
Sustaining a Tradition of Quality
And that’s why entrepreneur Don Hamer, himself a pioneer in the electronics industry, has created the Hamer Professorship of Materials Science and Engineering—the department’s first endowment of its kind. “Over the years, the University’s materials faculty has helped my business in many ways,” says the founder and chairman of State of the Art, Inc., one of the world’s leading manufacturers of resistors. “This gift is ‘payback’ for the success and satisfaction that’s come from my relationship with Penn State.” That relationship began in 1963, when Don came to State College to serve as chief engineer and then corporate research director for Erie Technological Products, a ceramic capacitors business. He already had a degree in ceramics engineering from the University of Illinois and an M.B.A. from the University of Chicago, but he started taking electrical engineering courses at Penn State to better understand his employer’s products. By 1968, he had earned a bachelor’s in electrical engineering, and he launched State of the Art, Inc., the following year. “I became friends with Rustum Roy, who was head of Penn State’s Materials Research Laboratory at the time, and they helped us with some projects, and we helped them with others,” Don says. “I have also hired a lot of Penn Staters as interns and engineers, and they’ve been a big part of our company’s growth. I certainly owe a lot to the University.” It’s a debt that Don has already honored with support for the University Libraries (where his wife and fellow Penn State graduate and philanthropist, Marie
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The President’s Report on Philanthropy and Endowments
2012–13
Matt Bellingeri
Ensuring Student
Penn State’s Department of Materials Science and Engineering has big dreams—and very, very small ones. Atom by atom, its twenty-eight faculty members are pioneering technologies that can reduce the size and improve the functioning of everything from electronics that fit in your pocket to cancer treatments that slip into cells. Ranked among the nation’s top ten programs of its kind, the department is also home to experts who are enhancing familiar materials such as glass and familiar devices such as batteries, as well as researchers studying capacitors, transducers, and polymers. The Materials Science and Engineering faculty has an extraordinary range of interests, but Dr. Gary L. Messing, the department head and distinguished professor of ceramic science, says, “They’re all innovators in their teaching and research. They’re all entrepreneurs.”
Redheaded Ninja
Tomorrow’s technology begins with support for today’s top faculty
Bednar, worked for many years), the Palmer Museum of Art, The Arboretum at Penn State, and the Hamer Center for Community Design. Many of his gifts are intended to benefit both the University and the people of State College, and he’s been an active leader for a wide range of local organizations, including the Clearwater Conservancy. A Penn State Distinguished Alumnus, Don remains connected to his other alma maters as well, and the University of Illinois recently named him to its Engineering Hall of Fame. “It’s especially meaningful to have our first professorship endowed by someone with such an immense impact in the field and such an extensive history with our program,” says Dr. Messing. While the department has two career development professorships for rising stars in materials science, the Hamer Professorship will be an important tool in recruiting an established academic leader. At a time when government funding is harder and harder to secure, the resources of a professorship offer the flexibility to explore new ideas in a fast-moving discipline. “We’re competing with the very best universities in the world, places like Stanford and MIT that have many faculty endowments,” says Dr. Messing. “Don’s gift and support from other alumni and friends will provide critical leverage as we recruit the very best materials scientists who will help us continue to make important discoveries and advance the field of materials science and engineering.”
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Don Hamer (above), Dr. Gary L. Messing (below)
Over his seven decades in that field, Don Hamer has seen many changes. “When I was studying ceramics engineering in the 1940s, it was mostly bricks and dishes, and now it’s electronics and aerospace,” he says. “The world is unpredictable, and no one knows what will happen in the next twenty or thirty years, but I’m glad that Penn State will be a part of it.”
The President’s Report on Philanthropy and Endowments
2012–13
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A partnership for central Pennsylvania patients takes another step forward
Ensuring Student Opportunity
Enhancing Honors
Back in the 1950s, Rocco Ortenzio graduated from the University of Pennsylvania’s physical therapy program and opened a full-time private practice in central Pennsylvania. Although it was a novel concept at the time, Rocco successfully built R.A. Ortenzio & Associates into a respected and busy outpatient physical therapy practice—and then several years later, set his sights on inpatient medical rehabilitation hospitals. At that time, he knew that patients recovering from a devastating accident or illness only received about thirty minutes of daily, focused rehabilitation treatment in the traditional hospital setting. He envisioned a new kind of hospital—one focused exclusively on patients who required three hours or more of daily rehabilitation treatment. It would be home to a team of medical rehabilitation professionals who would share in the patients’ journey to recovery.
Education
Enriching the Student Experience
Building Faculty Strength & Capacity
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Fostering Discovery & Creativity
Sustaining a Tradition of Quality
That vision inspired Rocco to open the region’s first freestanding community-based rehabilitation hospital in 1972, and the same commitment guided him in taking his groundbreaking model of patient care to establish more than 60 rehabilitation hospitals in communities across the country. Today, Select Medical (which he co-founded in 1996 with his son Bob) operates 15 rehabilitation hospitals (and growing), more than 110 long-term acute care hospitals, and more than 950 outpatient physical rehabilitation centers, but the headquarters of the company remain in the Harrisburg area, where Rocco grew up. When Penn State Milton S. Hershey Medical Center needed a partner for its own rehabilitation hospital, it turned to Select Medical, and the facility opened in July 2010. Now the Ortenzio Family Foundation has deepened that partnership by endowing the Rocco Ortenzio Chair of Physical Medicine and Rehabilitation. “It’s truly a once-in-a-lifetime opportunity to ensure a vibrant future at Penn State Hershey for a field that has been my professional passion for more than fifty years,” says Rocco. “There’s already a superb level of care there, and I hope that through the chair’s leadership in research and education, physical medicine and rehabilitation can continue to thrive and advance in central Pennsylvania.” The Ortenzio Chair has already played an important role in shaping the future of the field at Penn State Hershey: The
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The President’s Report on Philanthropy and Endowments
2012–13
Gordon Wenzel
endowment was instrumental in the medical center’s successful effort to recruit David R. Gater Jr., M.D., Ph.D., to lead the Department of Physical Medicine and Rehabilitation. In August, Dr. Gater came to Hershey from Richmond, Virginia, where he was director of the Spinal Cord Injury Fellowship Program at Virginia Commonwealth University and chief of Spinal Cord Injury & Disorders for the Department of Veterans Affairs Hunter Holmes McGuire Medical Center. “The Ortenzio endowment demonstrates the earnest intent of Penn State Hershey’s leadership to establish physical medicine and rehabilitation as an essential component of its healthcare vision, and it demonstrates the compassion, enthusiasm, and generosity of one of the most influential families in the field,” says Dr. Gater. He plans to use the resources of the chair as seed money that will help researchers to get the data they need to secure outside funding; as stipends for medical students and residents engaged in investigations; and as support for Penn State Hershey faculty who want to learn new and innovative techniques essential to cuttingedge research and care. “Physical medicine and rehabilitation helps individuals to be a part of their communities and enjoy an abundant, fulfilled life even after a catastrophic event or disease,” says Dr. Gater. “At Penn State Hershey, we’re committed to an interdisciplinary clinical focus bridging the lifespan from infancy to geriatrics, an outstanding educational and training platform, and a vibrant research presence across the spectrum of the field. The Ortenzio Chair will help us to achieve all these goals.”
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Nancy Ortenzio, Dr. Harold L. Paz, and Rocco Ortenzio (above), Dr. David R. Gater Jr. (opposite)
Ken Smith
The endowment will also help Penn State Hershey to capitalize on an expansion of its rehabilitation hospital to a two-story, 98-bed facility with new outpatient programs for traumatic brain injuries and wound care. Harold L. Paz, M.D., M.S., is chief executive officer of Penn State Milton S. Hershey Medical Center and Health System, senior vice president for health affairs, and dean of Penn State College Medicine, and he says, “The expansion of the rehabilitation hospital and the recruitment of Dr. Gater will allow us to provide the complex, comprehensive care that central Pennsylvanians need to recover the strength, skills, confidence, and independence to return home and back to their daily lives. The Ortenzio Chair creates a permanent connection between our leadership in the field of physical medicine and rehabilitation and the leadership of Rocco Ortenzio and his family, and we’re deeply honored and grateful.” Rocco believes that the honor is his, however. “Many people have thanked me and my family for endowing the Ortenzio Chair, but we’re proud to have the opportunity,” he says. “For me, it’s the culmination of my five-plus decades in the field, and it means a great deal to me professionally and personally. Physical medicine and rehabilitation is about giving hope, and we’re honored to give hope to the people of Pennsylvania and to Penn State Hershey.”
The President’s Report on Philanthropy and Endowments
2012–13
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A Class of 1933 graduate turns his success into support for students
Ensuring Student Opportunity
Enhancing Honors Education
Enriching the Student Experience
Building Faculty Strength & Capacity
Fostering Discovery & Creativity
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Sustaining a Tradition of Quality
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Nothing about coming to Penn State was easy for Russell E. Horn Sr. Very few young people in his tiny town wanted to go to college, but he was so determined that he started working in the local cigar factory at the age of 7 to earn money for his education. When Russell got to the University Park campus in 1929, he discovered that his tough road had only just begun. “The first year was awful,” he recalls. “I came from such a small community, with just a two-room school, and the other Penn State students seemed so different from me. I had to go home at the end of the first semester and tell my father that I flunked. He just said, ‘Did you try? That’s all you can do.’” Russell went back to Penn State, worked hard, and graduated in 1933 with his degree in civil engineering. Following the Great Depression and World War II, he partnered with a hometown friend to launch a successful architectural engineering firm, and he went on to found a series of companies that now exist as PACE Resources, Inc. And last year, as Russell prepared to celebrate his 100th birthday, he gave future students a gift to make their own roads to success a little easier: a $1 million commitment to support a student enrichment center at Penn State Harrisburg.
The President’s Report on Philanthropy and Endowments
2012–13
“It’s a time of incredible growth and transformation for our campus, and Mr. Horn’s gift will be very important in meeting the changing needs of our students and inspiring others to support the project,” says Chancellor Mukund Kulkarni. “His commitment has also had a tremendous emotional impact for all of us. Through his leadership, he’s sharing his belief in the potential of Penn State Harrisburg and the potential of our students.”
demic support through more than 3,000 one-on-one sessions a semester, along with in-class workshops that help hundreds of students to develop skills in everything from writing to math. Dr. Janice Smith, coordinator of the center, says, “Academic support services have traditionally been viewed as remedial, but that’s not the case today. There are some skills that are better developed outside the classroom, and every student can benefit from the attention that a center like ours can offer.”
Originally conceived as an upper division college for juniors, seniors, and graduate students, Penn State Harrisburg began admitting first-year students to all majors in 2004, and it now offers more than sixty degree programs, from associate to doctoral, that can be completed at the campus, as well as the first two years of study for every undergraduate major offered by the University. Over the last ten years, full-time enrollment has increased by 82 percent, with more and more students choosing to live on campus and seeking a complete undergraduate experience.
The center’s activities currently take place “wherever we can find a bit of space,” says Dr. Smith, but Russell’s gift will create a dedicated area, designed for both individual and group sessions, where students can get the kind of assistance that wasn’t available when he was struggling at Penn State. Despite challenges he faced, Russell credits his experiences at the University with his ability to make a difference for today’s and tomorrow’s Penn Staters.
Annamarie Maki
“We’re committed to serving every student we accept,” says Dr. Don Holtzman, senior director of student services and special projects. “Right now, we’re using every square foot of space to provide a wide range of services—academic advising, career counseling, support for honors and international students, tutoring—but they’re scattered across campus. When the center is built, it will bring all of these services and others together to create a real home for students where they can find all the opportunities and help they need.”
“I always tell young people that you’ve succeeded when you can help other people,” he says. “Penn State gave me the opportunity to get an education and earn a good living, and when I give, I’m just doing what I think I should do. Believe me, I’ve received a lot more than I’ve given.”
Russell Horn’s gift has both launched the campaign for the center and provided funds for two key areas: a spiritual meditation center and a learning center. The former will be a flexible, nondenominational space where Penn State Harrisburg students—who now represent more than thirty countries—can reflect and worship in their own traditions. “Faith has always been very important to me,” says Russell. “Students come to Penn State to get an education, but there’s more to life than making a living.” Although construction on the project is a few years away, the campus has already renamed its existing Russell E. Horn Sr. Learning Center in his honor. The center’s professional staff, graduate assistants, and undergraduate tutors provide aca-
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Dr. Janice Smith (above), Russell E. Horn Sr. (opposite)
The President’s Report on Philanthropy and Endowments
2012–13
17
Concepts in Philanthropy
›
Concepts in Philanthropy
Awards & Honors
Endowment Overview
University Budget Summaries
Penn State and employer matching programs “It’s all about leverage,” says Gene Curry. “If you want to help students, why wouldn’t you want to help as many as possible?” Gene and his wife, Fran, first took advantage of the Trustee Matching Scholarship Program in 2008, when they created a scholarship to honor Gene’s parents. Like all Trustee Scholarships created before March 1, 2013, that gift earns a 5 percent match (roughly equivalent to the annual spendable income from the endowment) every year in perpetuity, doubling the funds available for Penn State students. When the program reached its original goal of $100 million earlier this year, the University announced a 10 percent match level, available only for new endowments created through the end of the campaign on June 30, 2014, or until the program hits its new goal of $120 million in Trustee Scholarship gifts. The Currys were quick to create a new endowment, and they have also secured employer matching support from the Aetna Foundation. Many employers encourage philanthropy with this kind of matching program; to learn if your company offers this benefit, you can search a database at www.matching. psu.edu or contact your human resources office. Opportunities also exist to leverage University support for Early Career Professorships and graduate fellowships. To learn more, please visit giveto.psu.edu/support.
Campaign Executive Committee
18
The benefits of gift planning Gene Curry has spent a career helping others to achieve their financial goals, and he drew upon that experience and perspective in planning the gifts that he and Fran have made to Penn State Berks. “We want our money to go to students, not tax collectors,” says Gene. The couple has worked closely with Penn State’s Office of Gift Planning to establish a bequest and a charitable remainder trust. The trust, funded by money from Gene’s retirement plan that would otherwise be taxed, will provide income for Fran during her lifetime; the principal will then supplement their scholarships at Penn State. A bequest from Fran’s estate will also increase their scholarships, but in the meantime, the couple will use annual gifts to supplement the endowments’ income and reach even more students. Penn State’s Office of Gift Planning can provide details about these options, as well as suggestions about how to work with your financial adviser on your long-term philanthropic plans. To arrange for a free and confidential session with a Gift Planning professional, please contact 1-888-800-9170 or giftplanning@psu.edu.
The President’s Report on Philanthropy and Endowments
2012–13
Annual gifts, endowments, and early activation Jack and Libby Yoskowitz are in the process of endowing the honors scholarship that they first funded with annual support, but in the meantime, they’re continuing to make yearly gifts equal to the endowment’s eventual income so that Schreyer Scholars go on benefiting from their support (a strategy known as “early activation” of an endowment). Libby Yoskowitz says, “It’s been a great approach for us, and it can be a great approach for other people who may not be able to fund an entire endowment right away, but who want to start helping students as soon as they can.” Annual gifts can allow donors at every level to have an immediate impact, as funds are typically expended in the same year in which they are received. Endowments, which require a minimum gift of $20,000 or more (depending upon type), generate income that supports the donors’ goals in perpetuity, and they can often be funded over a period of five years. Penn State’s development staff can provide more information about using a combination of annual gifts and endowed funds to fulfill your own philanthropic goals.
Communicating a legacy When John and Mary Anne Cahir met with the first class of Project Cahir Corps students, it was a powerful moment for everyone involved. “They were such an impressive group,” says Mary Anne. “They all had the drive to make a difference in the world.” Kelsey Burton, one of the students, says, “It was such an important experience to hear from the Cahirs about their son and what our work means to them. We kept their story in mind as a motivator throughout the whole year.” Meetings like the Project Cahir Corps session are one of the many ways that Penn State can connect you with those who benefit from your phi-
lanthropy. Formal and informal gatherings and visits to labs and classes allow donors to hear firsthand about the importance of their support and share their hopes for the students and faculty who benefit. And to ensure that their vision is communicated far into the future, many donors work with Penn State to draft legacy statements describing their motivations for giving; these statements are then shared with every future recipient of their support. If you would like to develop a legacy statement for an existing or planned gift, please contact the Office of Donor Relations at 1-855-249-0222.
Charitable foundations “Last year, I simplified my will by giving my family members what would have been their inheritances,” says Don Hamer. “I’m very glad I did this, so that they can use the funds now rather than later. Also, I transferred most of my liquid assets to my charitable foundation. Now I’m required to give away more money every year, and that’s a wonderful dilemma to have.” Don’s gift to endow the Hamer Professorship of Materials Science and Engineering came from his foundation’s funds. Rocco and Nancy Ortenzio also chose to endow the Ortenzio Chair of Physical Medicine and Rehabilitation through their foundation, which is one of the leading supporters of education and health care in the greater Harrisburg area. Charitable foundations are nonprofit grant-making bodies that allow individuals and families (and other board members whom they appoint or elect) to direct shared resources to the causes that matter most to them. Penn State also offers an option for donors who would like the advantages of a family foundation without the complexity, expense, and administrative burden of creating their own nonprofit: the Penn State University Charitable Gift Fund
DeferreD GivinG 2003–2012 (Fiscal year ending June 30) Deferred Giving 2004–2013 (Fiscal year ending June 30) 2004
30.0
2005
14.4
2006
21.1
2007
25.2
2008
21.5
2009
24.6
2010
27.6
2011
34.2
2012
14.0 28.2
2013
0
10
20
30
4 in millions of dollars
The President’s Report on Philanthropy and Endowments
2012–13
19
Endowment Minimum Gift Levels (PSUCGF), a donor-advised fund that offers many tax benefits as well as a structure and online tools for engaging family and friends in philanthropic decision-making. You can learn more about PSUCGF on page 21.
$ 5,000,000 $ 5,000,000 $3,000,000 $2,000,000 $1,000,000 $ 500,000
Student Endowments Graduate Fellowship Distinguished Graduate Fellowship Honors Scholarship Undergraduate Scholarship Destiny Scholarship Enrichment Scholarship Trustee Scholarship Renaissance Scholarship
$ 250,000 $ 250,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 30,000
Program Endowments Lectureship Research Program Support Libraries Awards
$ 100,000 $ 50,000 $ 25,000 $ 25,000 $ 20,000
Tina Hay
Leadership philanthropy The right gift at the right time from the right leader can have an impact far beyond its dollar value. “By making the first commitment to our student enrichment center, Russell Horn has given us tremendous confidence about the direction that we’re headed as a campus and about fundraising for the project going forward,” says Penn State Harrisburg Chancellor Mukund Kulkarni. “When he announced his gift to our faculty and staff, all 300 people in the room gave him a standing ovation—we were so inspired and energized.” Leadership philanthropy like Russell Horn’s can shape the University’s mission and challenge alumni and friends to make their own investments in the future of the institution. Across the University, private support is needed to initiate new programs, take existing ones to higher levels, and transform the experience of Penn State students. Development staff members can work with you to find an opportunity for leadership philanthropy that matches your own passions and goals.
Academic Endowments Dean’s Chair Department Naming Department Head’s Chair Faculty Chair Professorship Early Career Professorship
20
The President’s Report on Philanthropy and Endowments
2012–13
The Pennsylvania State University Charitable Gift Fund Creating connections for Penn State supporters Alumni and friends who want a simple, cost-effective way to maximize the impact and tax benefits of their philanthropy now have a new option: the Pennsylvania State University Charitable Gift Fund, a donor-advised fund (DAF) that allows Penn State supporters to invest their charitable dollars and direct contributions to both the University and other nonprofit organizations. “Penn Staters are recognized around the country for their commitment to giving back—not just to the University, but also to countless charities in their communities and around the globe,” says Rodney P. Kirsch, senior vice president for development and alumni relations. “The Pennsylvania State University Charitable Gift Fund was created to help these generous individuals and their families to manage and simplify their philanthropic activities. This fund comes after years of research and preparation, and we are proud to be offering our supporters one of the most innovative approaches to giving available today.” Through the Penn State University Charitable Gift Fund (PSUCGF), donors can make gifts of cash, appreciated assets such as securities or real estate, and other resources to a fund that is invested and administered on their behalf by the University’s partners, investment firm Kaspick & Company and DAF technology and services provider Crown Philanthropic Solutions LLC. An account can be established with a gift of $25,000, and it can be increased with additional contributions that each meet a $1,000 minimum. Donors may choose to have their gifts invested in one of eight options, much like mutual funds, that reflect different growth and income strategies. Gifts can be counted as tax-deductible as soon as they are committed to the fund, allowing donors to manage the impact of significant tax events. Donors may wait to direct their support until they have defined their philanthropic priorities, but at least 50 percent of the distributions from each donor’s account must ultimately come to the University.
“For many alumni and friends, this fund offers an important alternative to other approaches to charitable giving,” says Michael J. Degenhart, executive director of gift planning. “Gifts to the fund can be made when they will be most financially advantageous for the donor while allowing for tremendous flexibility in the timing and targeting of charitable support. By partnering with one of the leading DAF technology solutions in the industry, we are also able to offer supporters a unique range of online tools that make giving easier, simpler, and more gratifying than ever.” Individuals who create an account through the PSUCGF will have access to Crown’s DonorFirst dashboard environment, a secure, web-based system that makes it possible for donors to track contributions and distributions, research and receive content about both Penn State and external grantees, and direct their support, twenty-four hours a day, from any location. Donors can also invite other family members or friends to use the dashboard to communicate and share ideas about individual and family philanthropy. “By minimizing the challenges and maximizing the benefits of giving, both financial and personal, we hope that the Penn State University Charitable Gift Fund will make the experience of philanthropy even more rewarding for our supporters,” says Kirsch. “We see this fund as a way to encourage the Penn State spirit of philanthropy and to help our supporters connect with the people and the causes that matter most to them.” For more information about the Penn State University Charitable Gift Fund, please contact Michael J. Degenhart, executive director of gift planning, at 1-888-800-9170 or giftplanning@psu.edu.
The President’s Report on Philanthropy and Endowments
2012–13
21
Philanthropy Awards & Honors
Concepts in
›
Philanthropy
Awards & Honors
Endowment Overview
University Budget Summaries
Campaign Executive Committee
22
Each year, the Division of Development and Alumni Relations honors those individuals and companies that have been instrumental in our fundraising success. In 2013, we celebrated the following award winners. Philanthropists of the Year: Tracy and Ted McCourtney This award recognizes an individual, couple, or family who has demonstrated exceptional generosity in the promotion and support of The Pennsylvania State University. Through their philanthropy, the recipients have helped to shape Penn State’s future and enabled us to better serve students and citizens. A former social worker and an independent investor: Tracy ’65 and Ted McCourtney are an ideal philanthropic partnership, and their many gifts to Penn State reflect a marriage of compassion and vision, one which has had a profound impact on the University and, especially, on the College of the Liberal Arts. The struggles of Tracy’s own family to pay for her Penn State education inspired their endowment of three undergraduate scholarships, which have helped more than 350 Liberal Arts students to earn their degrees. At the same time, the McCourtneys are helping to ensure that the students who come to Penn State and the college are finding an extraordinary academic community here. Through endowments for graduate students and faculty, Tracy and Ted are supporting the present and future leaders who set the standard in disciplines including psychology, sociology, English, and American history. They have also become strategic partners with the college in some of its most exciting initiatives. Their gift to the Moore Building renovation and addition was vital in moving that project forward. Tracy and Ted made a lead gift in the campaign to honor Dean Susan Welch for her twenty years of service to Penn State, which inspired several hundred other gifts. Within the last year, they have created an early career professorship in psychology, a fund for the Career Enrichment Network, and a director’s fund in the Center for Democratic Deliberation, which will be matched with funds from the National Endowment for the Humanities. Through these and many other gifts to Penn State, and through their support for Ted’s alma mater, Notre Dame, the McCourtneys have set an inspiring example of philanthropic leadership for higher education.
The President’s Report on Philanthropy and Endowments
2012–13
Rich Banick
Fundraising Volunteers of the Year: David and Ann Hawk
Corporate Partner of the Year: General Electric
This award recognizes an individual, couple, or group who has served as fundraising volunteers, teachers, or mentors while demonstrating exceptional commitment and leadership in building philanthropic support for The Pennsylvania State University.
This award recognizes a corporation that has demonstrated extraordinary generosity in promotion and support of The Pennsylvania State University. Recipients are chosen on the basis of consistency of giving, support to areas of greatest needs, and impact across Penn State.
Since David and Ann Hawk met as students at Penn State Worthington Scranton, they have been proud supporters of the University, and they have inspired thousands of other alumni and friends to give. David earned an associate degree in business administration in 1971, and he is now chairman of the board and director of research and development for Gertrude Hawk Chocolates in Dunmore, Pennsylvania; Ann, a 1972 graduate in individual and family studies, has a Rosen Method Bodywork practice based in Dunmore. Through their leadership as co-chairs for Penn State Worthington Scranton in For the Future: The Campaign for Penn State Students, the campus became the first to reach its goal—almost three years ahead of schedule—and the Hawks have continued to challenge their fellow supporters, raising nearly $6 million to date through their dedication, enthusiasm, and focus. They have also led by example with their gift to create the David and Ann Hawk Student Success Center, and through their family’s company, they have also supported scholarships and awards for leadership and service at the campus. Ann and David have served on the Penn State Worthington Scranton Advisory Board as well as boards and campaign committees for many community organizations, including the Greater Scranton Chamber of Commerce and the Lackawanna and Wayne Counties United Way. In 1989, David was the first recipient of the Penn State Worthington Scranton Alumnus of the Year Award, and he was named a Penn State Alumni Association Alumni Fellow in 2007. The campus and the University continue to recognize and rely upon the leadership of David and Ann Hawk.
For more than forty-five years, General Electric has maintained a partnership with Penn State that exemplifies both organizations’ commitment to educating a global workforce and promoting innovation. In that time, GE has provided $23 million in funding for philanthropy and sponsored research, including more than $500,000 in the past year alone. These gifts and investments have made possible such programs as Faculty for the Future, a ten-year, $20 million initiative designed to increase the number of women and under-represented minority faculty members in engineering, related sciences, and business. Partnering with such initiatives as the Applied Professional Experience Program (APEX) in the Smeal College of Business, GE sponsors collaborative projects that provide students with valuable real-world experiences. Programs like these help Penn State produce highly skilled graduates, many of whom go on to become valued employees and leaders for GE. Penn State is among GE’s top five schools for recruitment, and the company currently employs about 1,270 Penn State alumni. Those alumni recently came together as one team to develop the GE-Penn State Alumni Scholarship Fund for engineering, business, and IST students. Further demonstrating a shared vision between the company and the University, GE established this past year the GE Competing for the Future Scholarship in Business and Engineering, which will support exceptional undergraduate students in the College of Engineering and the Smeal College, and committed to sponsoring research in the College of Engineering on the UG Mining Durathon Battery Advanced Packaging project, which will study the feasibility of employing GE’s industrial battery in underground mine cars. “Penn State is a big part of GE’s future,” GE Chairman and CEO Jeffrey Immelt has said, and Penn State greatly values the opportunity to continue developing this wideranging and forward-looking partnership.
The President’s Report on Philanthropy and Endowments
2012–13
23
Endowment Overview
Concepts in Philanthropy
The University now reports results for both endowed and similar funds and non-endowed funds as commingled assets of the Long-Term Investment Pool (LTIP). The non-endowed funds, formerly invested in Penn State’s operating pool of fixed-income securities, have been commingled with endowed funds to strategically fund the University’s liability covering post-retirement health care benefits for Penn State retirees. Additional income realized from the transfer to the LTIP relieves the University’s operating budget of this ongoing obligation. Penn State’s accounting practices follow the guidelines of the Financial Accounting Standards Board.
Awards & Honors
›
Endowment Overview
Endowed gifts are held by Penn State in perpetuity. The initial gift is invested, and a portion of the average annual investment return is spent for the purpose designated by the donor. The remaining income is added to the principal as protection against inflation. Thus an endowed gift today will have relatively the same value for future generations.
University Budget Summaries
Campaign Executive
The Long-Term Investment Pool (LTIP) is Penn State’s investment portfolio into which endowed funds (Endowment Pool) established at the University are invested. This commingled pool operates much like a mutual fund. Each endowment owns a number of units in the pool, just as an individual would purchase shares in a mutual fund. As with a mutual fund, the value of each unit at the time funds are invested in the pool determines how many units an individual fund acquires.
Committee
Penn State strives to be a good steward of its endowed gifts and follows a prudent management philosophy in investing these gifts so that they maintain their value in real, inflation-adjusted terms over time. The University’s Board of Trustees has established four basic endowment management principles to guide the University’s Investment Council. These four principles ensure that the spending power of each endowment gift will be maintained in the face of economic fluctuations. Basic Endowment Management Principles 1. Provide sufficient current and future income to meet the University’s spending objectives and enhance its mission. 2. Focus on long-term performance. 3. Accept a reasonable and prudent level of risk while maximizing “total” return. 4. Diversify investments to reduce risk.
24
The President’s Report on Philanthropy and Endowments
2012–13
Investment Management Update Penn State’s endowment investments consist of a diversified investment portfolio of public equities, bonds, private capital, and hedge funds in addition to real assets. In managing our investments, we adhere to a prudent, rational, long-term strategy that seeks to maintain steady growth while minimizing the effects of volatile market fluctuations. The University provides 4.5 percent of the pooled endowment’s five-year average market value for spending on scholarships and educational programs. The University’s spending policy of using rolling five-year average balances is intended to smooth out the “peaks” and “troughs” in the investment markets, saving a portion of the earnings in the good years to offset the less profitable years. This provides generous current spending while preserving future purchasing power, which is known as “intergenerational equity.”
Gifts to Endowment (Fiscal year ending June 30) 150 136.3
120
90 70.2
As of the end of fiscal 2013, endowment and similar funds were valued at $2.03 billion, of which $1.93 billion was invested in the Long-Term Investment Pool (LTIP). Similar funds, which include charitable remainder trusts, charitable gift annuities, and other life income funds in addition to some donorrestricted funds, represented $95.7 million in assets that are not directly invested in the Long-Term Investment Pool.
60
56.5
51.4
55.2
76.2 73.9 61.2 62.5
42.4
30
0
’04
’05
’06
’07
’08
’09
’10
’11
’12
’13
in millions of dollars
Market Value of Penn State’s Endowments and Similar Funds (Fiscal year ending June 30) EP
Similar Funds
Total Value
2004 1,007 100
$1,107 (1.11 billion)
2005 1,128 103
1,231 (1.23 billion)
2006 1,280 110
1,390 (1.39 billion)
2007 1,537 132
1,669 (1.67 billion)
2008 1,488 128
1,616 (1.62 billion)
2009 1,184
97
1,281 (1.28 billion)
2010 1,342
98
1,439 (1.44 billion)
2011 1,708 123
1,831 (1.83 billion)
2012 1,765
90
1,855 (1.86 billion)
2013 1,933
96
2,029 (2.03 billion) in millions of dollars
n Endowment Pool (EP)
n Similar Funds
The President’s Report on Philanthropy and Endowments
2012–13
25
Endowment Asset Mix | Where Penn State invested its endowed funds (Fiscal year ending June 30, 2013)
12%
18% 61%
9%
n Growth n Diversifying n Defensive n Real Return
For the fiscal year ending June 30, 2013, the Endowment Pool and similar funds saw an increase of $174 million, and these funds have grown a cumulative $748 million over the last five years. Over this same period, the endowment has provided $337 million of program support, including $71 million in fiscal 2013. These amounts reflect the impact of investment returns and generous giving, including consistent support for scholarships and University programs.
The Penn State Endowment Pool is broadly diversified, with 18 percent in defensive investments (fixed income) as of June 30, 2013; 61 percent in growth (both U.S. and non-U.S. equities); 9 percent in diversifying (hedged strategies); and 12 percent in a variety of real-return investments including real estate, commodities, and energy. The majority of the endowment’s assets are equity-type investments that, over the long term, generate returns in excess of inflation in order to preserve the endowment’s purchasing power for future generations. In the year ending June 30, 2013, global equity markets continued the rally that began in March of 2008. Non-U.S. equities trailed U.S. equities, which experienced significant gains. Non-U.S. public equities, as measured by the MSCI All Country World ex U.S. Index, returned 13.6 percent, while US equities as measured by S&P 500 gained 20.6 percent. Meanwhile, fixed income returns were negative as the Barclays Capital Aggregate Bond Index earned a total return of -0.7 percent in fiscal 2013, following several years of positive returns.
Leah Eder
For fiscal 2013, the endowment’s investment return was 11.3 percent and has averaged 5.2 percent per year over the last five years. In the longer term, Penn State’s endowment has
averaged 8.3 percent per year, net of gifts and expenses, since June 30, 1993. These results demonstrate long-term growth across various financial ups and downs, such as the bull market of the 1990s, the steep decline at the turn of the century and subsequent economic recovery, and the recent downturn due to the credit crisis. Penn State’s diversified approach has allowed the endowment to support program spending, such as scholarships and faculty positions, while maintaining real, inflation-adjusted growth for future generations.
26
The President’s Report on Philanthropy and Endowments
2012–13
Average Annualized Total Returns for Periods Ending June 30, 2013 (Net of fees) Total returns include interest, dividends, and market appreciation
11.3% 11.3% 8.3% 8.6%
PENN STATE INVESTMENT COUNCIL Penn State’s Board of Trustees created the Investment Council in response to the University’s increasing asset base and complex investment strategies. The council provides direct oversight of the endowment and longterm investment program, and it regularly reviews asset allocation, new asset classes, investment strategies, and manager performance.
8.3%
Council Members David J. Gray, (Chair) Senior vice president for finance and business/treasurer, The Pennsylvania State University
5.2% 5.2%
David Branigan Executive director, Office of Investment Management, The Pennsylvania State University 20-year 10-year 5-year 1-year
Long-Term Investment Performance of Endowment The assets of Penn State’s endowment are commingled with the University’s Long-Term Investment Pool (LTIP), which is a broadly diversified investment portfolio. As of June 30, 2013, the LTIP had a total market value of $2.94 billion and earned an investment return of 11.3 percent, excluding the impact of new gifts and spending. While stock market returns often fluctuate from year to year, the endowment’s well-diversified portfolio can weather short-term fluctuations and generate positive returns over long periods of time. Net of all fees and expenses, the Penn State endowment has averaged 8.6 percent growth per year over the last ten years, and 8.3 percent over the last twenty years, allowing the endowment to maintain steady inflation-adjusted spending and to achieve long-term intergenerational equity.
Blake Gall, CFA Founder, president, Micro Plus, Plus Investment Management Carmen Gigliotti Managing director, Private Market Group, DuPont Capital Management Gary A. Glynn President and chief investment officer (retired), US Steel & Carnegie Pension Fund Edward R. Hintz Jr. President, Hintz Capital Management Arthur D. Miltenberger Vice president and chief financial officer (retired), R.K. Mellon & Sons Colleen Ostrowski Vice president and treasurer, ITT Corporation J. David Rogers Chief executive officer, J.D. Capital Management Linda B. Strumpf Chief investment officer (retired), The Helmsley Charitable Trust
The President’s Report on Philanthropy and Endowments
2012–13
27
University Budget Summaries
Income (Fiscal year ending June 30) 0.5% 4.7%
Concepts in
6.4%
Philanthropy
34.7%
8.5% Awards & Honors
n Tuition and fees n Medical Center/Clinic* n Restricted funds n Auxiliary enterprises n State appropriation n Philanthropy and other n Agriculture (federal) Total
Endowment Overview
›
dollars in thousands
15.5%
University Budget Summaries
29.7%
$ 1,478,354 1,265,596 662,849 362,081 272,431 202,191 21,262 $4,264,764
*Includes $6,536,000 in state and federal medical assistance funds, provided by the Pennsylvania Dept. of Public Welfare
Campaign Executive
Expenditure (Fiscal year ending June 30)
Committee
2.8% 5.0%
2.3% 1.2% 2.7%
dollars in thousands
29.6%
8.1%
8.5%
8.8%
17.5%
n Medical Center/Clinic n Instruction n Research n Academic support n Auxiliary enterprise n Institutional support n Physical plant n Public service n Student services n Pennsylvania College of Technology n Student aid Total
13.5%
28
The President’s Report on Philanthropy and Endowments
2012–13
$ 1,265,596 746,199 576,620 375,798 362,081 344,428 211,512 119,271 114,277 98,457 50,525 $4,264,764
Sources of Gifts Received 2012–13
|
Where the $237.8 million came from
11% Sources
12%
50%
27%
n Individuals Alumni Friends n Corporations n Foundations n Organizations Total
Designated Purposes of Gifts Received 2012–13 | .13% .91% 1.77% .01% 1.94% 4.59%
Amounts
Number of donors
$ 117,575,494 87,597,929 29,977,565 63,298,429 29,703,841 27,201,516 $237,779,280
Where the $237.8 million went
Purposes
27.66%
15.23%
23.08%
24.68%
185,248 72,111 113,137 6,620 467 1,058 193,393
Amounts
n Property, buildings, equipment n Student aid n Other purposes* n Research n Faculty resources n Public services and extension n Academic divisions n Unrestricted University-wide n Library resources n Physical plant maintenance Total
$ 65,756,503 58,693,966 54,868,210 36,212,007 10,914,405 4,616,968 4,202,845 2,167,199 315,896 31,281 $237,779,280
*This category includes gifts to the Children’s Miracle Network, multipurpose funds, and gifts awaiting designation by donors.
The President’s Report on Philanthropy and Endowments
2012–13
29
The State’s Share of Penn State’s Budget Year
Total Budget
State Appropriation*
Percent of Total
2013–14
$4,415,596,000
$275,931,000
6.3%
2012–13
4,264,764,000
272,431,000
6.3%
2011–12
4,121,627,000
272,431,000
6.6%
2010–11
4,016,443,000
333,863,000
8.3%
2009–10
3,761,608,000
333,863,000
9.0%
2008–09
3,607,440,000
338,375,000
9.4%
2007–08
3,411,528,000
334,230,000
9.8%
2006–07
3,209,165,000
327,715,000
10.2%
2005–06
3,044,868,000
312,026,000
10.2%
*Excludes state and federal medical assistance funding provided to Penn State Milton S. Hershey Medical Center through the Pennsylvania Department of Public Welfare
Gifts Designated to Specific Units 2012–13 Unit
Amount
Abington
$1,273,990
Amount
Hershey
$40,720,474
Agricultural Sciences
8,209,413
Information Sciences & Technology
Altoona
1,554,686
Intercollegiate Athletics
Arts & Architecture
3,081,621
Lehigh Valley
Beaver
310,859
Behrend
11,328,530
7,917,412 50,463,097 241,929
Liberal Arts
6,225,943
Mont Alto
797,202 304,590
Berks
458,038
New Kensington
Brandywine
442,778
Outreach
5,031,811
Research & Graduate School
3,983,097 1,357,785
Communications
1,471,270
Dickinson School of Law
922,094
Schreyer Honors College
DuBois
699,918
Schuylkill
800,175
Earth & Mineral Sciences
5,641,896
Shenango
394,418
Eberly College of Science
18,925,944
Education
2,796,101
Educational Equity
613,234
Engineering
30
Unit
20,428,283
Smeal College of Business
7,872,456
Student Affairs
1,941,688
Undergraduate Education
7,936,300
University Libraries
4,140,999 5,658,015
Fayette, The Eberly Campus
231,013
University-wide
Great Valley
356,138
Wilkes-Barre
514,045
Greater Allegheny
277,196
Worthington Scranton
592,400
York
593,221
Harrisburg
2,379,968
Hazleton
1,037,267
Health & Human Development
7,851,986
TOTAL
The President’s Report on Philanthropy and Endowments
$237,779,280
2012–13
Growth in Private Support and Donor Base 274.8 237.8
190.3
208.7
203.4 181.5
182.1
165.2
151.3
Gift receipts
130.9
’04
’05
’06 ’07 ’08 in millions of dollars
’09
’10
’11
’12
’13
353.3
284.7
277.5
265.2
273.8
263.6 223.7
200.9 163.4
’04
’05
173.0
New commitments
’06
’07
’08
’09
’10
’11
’12
’13
in millions of dollars
185,183 181,918 132,791 120,680
191,712 193,393
183,712
143,517 163,111
132,983
Number of donors
’04
’05
’06
’07
’08
’09
’10
’11
’12
’13
The President’s Report on Philanthropy and Endowments
2012–13
31
Campaign Executive Committee
Concepts in Philanthropy
Awards & Honors
Endowment Overview
University Budget Summaries
›
Campaign Executive Committee
Peter G. Tombros Campaign Chair
John M. Arnold At-large Member Richard J. Barry At-large Member E. Lee Beard Campaign Vice Chair Chair, Campus Committees
Edward J. Beckwith Chair, Planned Giving Advisory Council
Richard K. Dandrea Liaison, Penn State Board of Trustees
Dennis P. Brenckle Chair, Penn State Milton S. Hershey Medical Center Campaign Committee
Linda J. Gall Chair, Stewardship Committee
James S. Broadhurst Past Chair, Board of Trustees, The Pennsylvania State University
32
The President’s Report on Philanthropy and Endowments
2012–13
Edward R. Hintz Honorary Campaign Chair
Helen Skade Hintz At-Large Member
Edward P. Junker III At-large Member
William A. Jaffe At-large Member
Jeffery L. King At-large Member
Martha B. Jordan Chair, Annual Giving Committee
Keith E. Masser Chair, Board of Trustees
Bruce R. Miller Campaign Vice Chair Chair, College Committees Arthur J. Nagle Honorary Campaign Chair Robert E. Poole Chair, Leadership Gifts Committee
Catherine Shultz Rein Chair, Corporate Relations Committee
John K. Tsui At-large Member
Douglas L. Rock At-large Member Richard K. Struthers At-large Member
The President’s Report on Philanthropy and Endowments
2012–13
33
Ex Officio Members
Robert N. Pangborn Interim Executive Vice President and Provost, The Pennsylvania State University
34
David J. Gray Senior Vice President for Finance and Business/Treasurer, The Pennsylvania State University Rodney P. Kirsch Senior Vice President for Development and Alumni Relations, The Pennsylvania State University
The President’s Report on Philanthropy and Endowments
2012–13
Leah Eder (back cover and opposite)
Rodney A. Erickson President, The Pennsylvania State University
This publication can also be found on the web at: president.psu.edu/philanthropy For more information about philanthropy at Penn State, contact: Rodney P. Kirsch Senior Vice President for Development and Alumni Relations The Pennsylvania State University 116 Old Main University Park, PA 16802-1501 814-863-4826
rpk6@psu.edu
The following current and recent Penn State students contributed photography to this publication: Andrew Dunheimer is a May 2013 visual arts and information sciences and technology graduate. As a student, Andrew served as a senior photographer for The Daily Collegian and was a member of the National Society of Collegiate Scholars and the Phi Kappa Phi honor society. Andrew now works as a technology advisor in the financial services office at EY in New York City, while continuing his freelance photography career. Matthew Bellingeri is a senior majoring in Security Risk Analysis and minoring in Information Sciences and Technology. He serves as a photo editor for The Daily Collegian and is a co-founder of Boulevard Penn State, a student-run community service and philanthropy organization on campus. He plans to pursue a career in information security within the financial sector while continuing his career in freelance photography. Leah Eder is a junior majoring in Fine Arts with a concentration in Photography. She is also pursuing a minor in Art History. She currently serves as a senior photographer for The Daily Collegian and as a photography intern with the College of Agricultural Sciences. After she graduates, Leah hopes to pursue a career as a professional photographer, with focuses in architectural, corporate, and editorial photography.
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