The $900 Million Initiative

The first weekend in October saw hundreds of alumni, trustees, and friends flock to Hopkins to celebrate the kick-off to the largest fundraising campaign in the university's history.

On October 1, a day packed with celebratory events that culminated in a gala dinner for 800 people, the Johns Hopkins Institutions officially launched an ambitious campaign to raise $900 million in just over five years. More daunting than the size of the goal itself is the fact that $525 million of the Johns Hopkins Initiative has been targeted toward endowment and capital--"the hardest money there is to raise, because it has to come, by and large, from individuals," says Hopkins University President William C. Richardson.

In the previous campaign, which ended four years ago, commitments to endowment and capital accounted for just 38 percent of the $644 million raised. "We're ratcheting that up to 58 percent. That's a huge increase," says Robert Lindgren, Hopkins's new vice president for development and alumni relations. Among recent campaigns undertaken by other top universities, he notes, only Yale has attempted a higher proportion (66 percent) of endowment and capital gifts to total gifts.

Endowment is money that can't be spent, the financial bedrock that ensures a university's future stability. "And it's no secret that, compared with peer institutions of similar size, Hopkins is under-endowed," notes campaign chair Michael R. Bloomberg '64. As of June 30, 1993, the market value of Hopkins's endowment stood at $725 million, ranking it 21st among U.S. colleges and universities. The endowment's relatively small size means that Hopkins is able to generate only about 4 percent of its annual operating budget from endowment income. For many private research universities, that figure is more like 10 to 20 percent.

This makes Hopkins overly dependent on federal research dollars--funding that is increasingly prone to budget-cutting in Washington. Add to that the financial uncertainties raised by looming changes in the nation's health care system, and it's easy to see why, in Lindgren's words, "The financial stability of universities and medical centers is a precarious proposition at best."

In every Hopkins division, income from gifts to the endowment will be used to increase financial aid for undergraduate and graduate students; to create endowed chairs for both junior and senior faculty members; and to provide seed money for research projects. The School of Public Health, for instance, considered the world's premier institution of its kind, currently has just one endowed professorship. The school's goal? To establish a dozen such chairs.

To meet capital needs, the Johns Hopkins Initiative will also generate funding for a wide variety of projects, including the hospital's new comprehensive cancer center, 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 Homewood, and a student recreational center at Homewood.

Each of these projects has been long awaited and is sorely needed. At the 10-year-old School of Nursing, for instance, where the student body has grown from 27 to 420, students are currently spread out over five buildings on two campuses. Only 20 students can fit into the school's library at any one time. Nursing's new home will be a five-story, 80,000-square-foot building just south of the School of Public Health. Until recently at Homewood, student activity space, including the gym and locker rooms, had not been significantly updated since before the admission of women in 1972.

Then there's Hopkins researcher Bert Vogelstein, recently ranked the "hottest scientist" in America by Science Watch, for his work in discovering a genetic basis for colon cancer. Vogelstein has been conducting his pathfinding research in space formerly occupied by an East Baltimore grocery store. "Internally, we joke that Bert works in the produce section," says Hospital President James Block. The new cancer center, for which ground was broken in September, will provide plenty of lab space for Vogelstein and other researchers, Block says, and help ensure that Hopkins remains at the cutting-edge in cancer research and treatment. Block also expects to see Hopkins Hospital establish "the number one cardiovascular center for the world."

President Richardson says it's this sort of quest throughout the divisions, to "push the frontiers of knowledge forward," that makes asking for money, well, easy. "We have such a terriffic track record, if you look at what has come out of the investments people have made in Johns Hopkins University in the past," he says.

How did campaign planners arrive at a goal of $900 million? The process began months ago, when faculty and administrators within each division sat down to begin hashing out their priorities for future programs and projects--an endeavor also undertaken at an institution-wide level by the university's Committee for the 21st Century and the hospital board. With each initiative also came a projected pricetag.

To see if these needs could realistically be met, the university's development officers set out to do a careful review of the university's donor prospects--primarily individuals, since corporations and foundations tend to restrict their philanthropy to programs and equipment. The fundraisers tried to determine who might reasonably be expected to make a major gift (defined as being more than $25,000) or, better yet, an "ultimate gift of a lifetime"--the kind that runs to six figures or more. What might each individual care to support, and how would each person's interests mesh with the needs of the institution? Predicting the nature, amount, and timing of such gifts is hardly an exact science. Nonetheless, after months of balancing priorities and costs against projected gifts, each division managed to come up with a target goal (see chart). When added together, these divisional goals amount to the university-wide total: $900 million.

Why not just make it an even billion? "A billion can be a meaningless number," says one Hopkins development officer, a veteran. It's hard to relate to. "Where does a $5 million or $10 million gift fit into a billion dollar effort? It can almost get lost." Beyond the psychological impact, there's a practical consideration: it's vital that the goal have some chance of being met, and $900 million--particularly given the campaign's emphasis on endowment and capital--holds out "an extraordinary challenge," Lindgren says.

By the day of the launch, Hopkins fundraisers already had $274.6 million in commitments; that's 30.5 percent of the goal total, just about the figure one hopes to have before going public with a campaign. (For purposes of accounting, development officers are counting gifts to endowment made since July 1991.)

The university's largest advance gift came two years ago, with the headline-grabbing $50 million "Krieger Challenge." Zanvyl Krieger '28 pledged to match, dollar for dollar, $50 million in contributions to the School of Arts & Sciences's endowment over five years. To date, Krieger's challenge has already stimulated $30.6 million in matchable gifts and pledges.

The second big gift was announced at a press conference held just one day before the campaign kick-off. Alumnus R. "Champ" Sheridan '52 and his wife, Debbie, pledged $20 million to Homewood's Milton S. Eisenhower Library. The actual value of their pledge is more like $25 million, since they fashioned it in the form of a $15 million outright gift and a $5 million challenge. Raising money for university libraries is notoriously difficult ("Nobody ever graduated from a library," says one fundraiser), and the MSE is in need of some long-delayed capital improvements ($8 million worth), so the Sheridan pledge came as particularly welcome news. Most of the gift will go toward boosting the MSE's $10.2 million endowment. "That income will allow us to move the library from a print culture into the library world of the 21st century," says Stephen Nichols, the MSE' s interim director.

With all the talk of eight-figure gifts, it's easy to wonder where the smaller donor--the one who faithfully writes out a yearly check for $25, $50, or $100--fits in. Last year at Hopkins, these annual gifts amounted to $11.5 million, university-wide. While a relatively small piece of Hopkins's overall budget, that money is critical, says Annual Fund director John Cook, because unlike endowment, it meets short-term needs, giving deans and directors the discretionary "kitty" they need to fund student scholarships, laboratory equipment, graduate fellowships, and promising new programs that haven't yet been budgeted for.

Annual Fund growth is particularly important during a campaign, says Lindgren, since some "shifting" can occur: Suppose a donor who has annually given $5,000 in unrestricted dollars now decides to endow a $1 million professorship? Great news, to be sure, but funds must quickly be found to fill the hole left in the operating budget.

Cook hopes to see the Annual Fund grow by about 50 percent over the course of the five-year campaign, and to see alumni participation increase from its current university-wide rate of 23 percent, which is slightly below the national average. "The Annual Fund provides an opportunity for the majority of alumni, parents, and friends to participate in the campaign," he says.

"There's an awful lot of work to be done," said campaign chair Bloomberg, at the pre-kickoff press conference.

President Richardson says that he, for one, is ready to mount the fundraising offensive. "Personally, physically, emotionally, psychologically, I'm looking forward to it," he says. "Fundraising is one of the parts of my job that I like most." That's because, he says, "when donors endow a university like Johns Hopkins, they know that 100 years from now, their gift is still going to be having a major pay-off for future generations."

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