Johns Hopkins Gazette: October 3, 1994


Endowment is key to future of institutions

The Johns Hopkins Initiative has as one of its principal
goals a substantial increase in the endowments of The Johns
Hopkins Institutions.
    An endowment is that portion of an institution's
financial resources that is held in perpetuity. A portion of
the total return generated by the endowment is used to fund
current operations; the principal, however--whether in the
form of cash, bonds, equities or other investments--is
considered inviolate and, in general, cannot be spent.
    The Johns Hopkins Institutions were founded on a bequest
of $7 million from merchant Johns Hopkins. Under the
conditions Hopkins specified for the university's half of
that $7 million, the trustees were barred from using the
principal of the bequest either for capital expenditures or
operating expenses. The bequest was the university's first
endowment; the bequest itself could not be spent, though the
income it generated could.
    Endowment is a university's financial bedrock. It allows
an institution to be less dependent than it might otherwise
be on unpredictable sources of revenue, such as research
sponsorship or government aid. It allows an institution to
charge students less in tuition than the full cost of an
education. And it provides a research university, in
particular, assurance about its financial future, enabling it
to take the intellectual risks that can pay off in monumental
leaps forward in knowledge.
    Today, Johns Hopkins University has a small endowment
relative to many of its peer research universities. As of
June 30, 1994, the end of fiscal year 1994, the market value
of the Hopkins endowment stood at $746.777 million.
    As of June 30, 1993, the latest date for which
comparable figures from other universities are available, the
market value of the Johns Hopkins endowment stood at $725.035
million. That ranked Johns Hopkins 21st in a survey of
colleges and universities published in the Feb. 9, 1994,
edition of the Chronicle of Higher Education.
    Harvard University had by far the largest endowment, at
more than $5.118 billion. Of the 20 schools ranking above
Johns Hopkins on the survey, 10 had endowments more than
twice as large as Hopkins'. A total of 14 had endowments
above $1 billion.
    Because of the endowment's relatively small size, Johns
Hopkins University is able to generate only about 4 percent
of its annual operating budget from endowment income. For
many private research universities, that figure is 10 to 20
    The Johns Hopkins Hospital and Health System's endowment
as of June 30, 1994, was $178.666 million.

Facts about
the Hopkins

    Goal:  Raise $900 million in private funds to increase
endowment, fund capital projects and support ongoing programs
of the Johns Hopkins Institutions (i.e., The Johns Hopkins
University and The Johns Hopkins Hospital and Health System).
    Priorities:  The primary aim of The Johns Hopkins
Initiative is to increase substantially the university's
relatively small endowment and to fund pressing construction
and renovation projects for both the university and the
health system. Of the $900 million overall goal, $525 million
is for endowment and capital purposes. The remaining $375
million is for support of current programs, including through
annual giving.
    Duration:  The public phase of the Johns Hopkins
Initiative began on Saturday, Oct. 1. The campaign will
conclude in the year 2000.
    Advance gifts:  The boards of trustees of the university
and the health system authorized the institutions to accept
gifts for the campaign beginning July 1, 1991. Since then,
lead donors have been asked to show their support and
enthusiasm with advance pledges and gifts for endowment and
capital purposes. Advance gifts and pledges totaled $274.6
million, or 30.5 percent of the total goal.
    The two largest advance gifts are a $50 million
challenge for endowment in the School of Arts and Sciences by
the Zanvyl and Isabelle Krieger Fund, and the $20 million
gift announced Friday for the Eisenhower Library from R.
Champlin and Debbie Sheridan.
    Last campaign:  The Campaign for Johns Hopkins was
publicly launched in September 1984 and lasted until February
1990. The campaign raised a record $644 million, 43 percent
more than the original goal of $450 million.
    The Campaign for Johns Hopkins was significantly
different in character, however, from The Johns Hopkins
Initiative. The earlier effort raised $247.5 million, or 38
percent of the total, for endowment and facilities. The Johns
Hopkins Initiative seeks to increase that portion to 58
percent; the emphasis on the university's critical need for
endowment, in particular, makes this a difficult goal to
accomplish. Endowment money is the hardest to raise.
    Goals by unit:  School of Arts and Sciences, $140
million; School of Continuing Studies, $9 million; Eisenhower
Library, $27 million; School of Engineering, $50 million;
Homewood Schools, $8 million; School of Hygiene and Public
Health, $80 million; Johns Hopkins Medicine, $455 million
(School of Medicine, $355 million; hospital and health
system, $100 million); School of Nursing, $19 million;
Peabody Institute, $20 million; School of Advanced
International Studies, $40 million; Nanjing Center, $4
million; academic centers and university-wide needs, $48
    Priority projects:  All divisions of the university seek
substantial gifts of endowment to increase financial aid for
both undergraduate and graduate students, to create endowed
chairs for both young faculty and senior professors, and to
provide seed money for new research projects.
    Priority capital projects include the new comprehensive
Cancer Center at the hospital, new buildings for the School
of Nursing and the School of Hygiene and Public Health,
renovations of the Eisenhower Library and several Engineering
School buildings at the Homewood campus, and student activity
and recreation space at Homewood.

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