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
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 24 University Budget Summaries 28 Campaign Executive Committee 32 Leah Eder (cover and opposite) (cover Eder Leah 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.
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 Match- ing 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 Message from the programs that exist because of gifts made in this campaign, they have helped For the Future to build momentum toward its $2 billion goal. President › You’ll find many other numbers in this report, but I want to share one that has Message from the 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. Campaign Chair 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 Eder Leah
22 The President’s Report on Philanthropy and Endowments 2012–13 Leah Eder 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 opportuni- ty 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 cel- ebrated 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 genera- tions of students to succeed, and he is among the donors we feature in this year’s President’s Report on Philanthropy and Endowments.
Russell’s gift reflects the campaign’s Sustaining a Tradition of Quality priority, Message from the and each story highlighted in the following pages represents a key objective of President For the Future:
Ensuring Student Opportunity: A father who couldn’t afford to attend Penn State Message from the 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 Campaign Chair 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 Eder Leah 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
44 The President’s Report on Philanthropy and Endowments 2012–13 Leah Eder Eder Leah
The articles in this report not only tell the stories behind im- portant gifts to the University – they also highlight ideas and approaches that have enabled many donors to fulfill their philanthropic goals. To learn more, please see the Concepts in Philanthropy section, which begins on page 18. Philanthropic leaders use smart strategies to reach more students
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 Ambas- Ensuring Student sador, 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 Opportunity › counted on to pay for his education. Enhancing Honors “I come from a working-class family, and money can be very tight,” he says. “But be- cause I received the Eugene and Eleanor Curry Memorial Trustee Scholarship this year, Education 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 Enriching the stressful moments of college are worth it.” Student That’s the message that Gene Curry Jr. ’59 Bus and his wife, Frances, hope that Experience 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 Building Faculty and Frances Franks Curry Scholarship, targeted to students with financial need and Strength & leadership qualities; the Eugene and Eleanor Curry Memorial Trustee Scholarship, Capacity which honors Gene’s parents; and the Gene and Fran Curry Trustee Scholarship, created just this year.
Fostering “I was the first in my family to go to college, and my Penn State education has helped Discovery & 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 Creativity 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 Sustaining a happy lives.” Tradition of The Penn State experience wasn’t available to Gene’s father, a Lewistown, Pennsyl- Quality vania 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
66 The President’s Report on Philanthropy and Endowments 2012–13 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 respon- sibility to do as much possible,” says Gene. “And we benefit, too. Philanthropy gives an added sense of purpose to our lives.”
The Currys have been able to learn about the impact of their support firsthand through annual scholarship dinners and oth- er 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 differ- ence 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.” Ed Kopicki Ed
The President’s Report on Philanthropy and Endowments 2012–13 7 A former honors student helps new generations to choose Penn State
Jack Yoskowitz earned a psychology degree in 1989, and Joanna Urban fin- ished 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 Scholar- Ensuring Student ship, and with his wife, Libby, he created the scholarship that helped Joanna to Opportunity choose the Schreyer Honors College.
“I had a fantastic experience at Penn State, and it’s been a springboard to a great Enhancing Honors life,” says Jack, who went on to Columbia University’s law school and is now a part- Education ner 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 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 Experience 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 Building Faculty for his Penn State education first led him to serve on the Schreyer Honors College Strength & Capacity
Fostering Discovery & Creativity
Sustaining a Tradition of Quality
86 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 pro- vide 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 Matt Bellingeri Matt a scholarship, which would go directly to students,” says Jack. “I had been making smaller gifts for years, but when you get to a Higher education is a philanthropic priority for the couple, stage of life where you have more, you can give more to those and they make equal contributions each to year to Penn State who are at a stage of life where they don’t have anything.” and to Libby’s alma mater, the College of Wooster. “Jack and I feel strongly that you should give what you can, whenever Scholarships like the Yoskowitzes’ are an important part of you can give it,” says Libby. the financial aid package that the Schreyer Honors College offers to applicants. Each new Schreyer Scholar receives an The Jack and Libby Yoskowitz Honors Scholarship has al- Academic Excellence Scholarship, a merit-based award that ready made a difference for Joanna Urban, the most recent provides $4,000—equivalent to just over 15 percent of the recipient. A writer for the Daily Collegian and a volunteer for typical annual costs for an in-state student and just over 10 THON and the Women’s Leadership Initiative in the College of percent for an out-of-state student. When top applicants Health and Human Development, Joanna says, “Scholarship are considering full-tuition offers from other institutions, the support really weighed my college decision-making in favor additional support of the Jack and Libby Yoskowitz Honors of the Schreyer Honors College. It’s allowed me to focus on Scholarship and similar funds can make all the difference, my academics and broaden my horizons instead of working getting Schreyer Scholars to Penn State and giving them the lots of hours. I have been able to be an active part of a com- freedom to “find the path that will help them grow the most,” munity of smart, creative, and down-to-earth people who says Libby. have a lot to give, and I’m ready to give, too.”
Jack and Libby are now endowing their award, even though Like Joanna, Jack and Libby have been impressed by the un- they have three children of their own who will soon be con- dergraduates of the Schreyer Honors College. “They’re doing sidering colleges—16-year-old Noah, 14-year-old Justin, and great things with their lives, and they’re already contributing 11-year-old Katie. “Saving for their education and supporting to their fields and their communities,” says Jack. “Other univer- other students are two different buckets for us,” says Jack. sities and other honors programs are really competing to get “We’re lucky enough to be able to take care of our own family these students, and we are glad that our support can help and help other families, too.” them to choose Penn State.” Ben Solomon
› The Yoskowitz family (opposite), Joanna Urban (above) 9 A new program remembers a Penn State hero and imagines a better future
Communication. Understanding. Change. It’s a cycle of transformation that Bill Cahir advocated throughout his career in government and journalism and his Dunheimer Andrew Ensuring Student 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 Opportunity 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 Enhancing Honors Corps, an initiative that channels the interest and energy of Penn State students into addressing the problem of poverty. Education “In a very short life, Bill had such a positive influence,” says his father, John Cahir Enriching the ’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 Student who participate in Project Cahir Corps can do the same, it will be a fitting remem- › Experience brance 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 Building Faculty undergraduate education in 2002, and his mother, Mary Anne Cahir ’63 Edu, is a
Strength & former director of development for the Bellingeri Matt Capacity University—and he earned a degree in English from his hometown institution in 1990. Bill went on to work for U.S. Sena- Fostering tors Edward Kennedy and Harris Wofford Discovery & before making the leap to journalism. He was writing for the Newhouse News Creativity Service when, motivated by the 9/11 at- tacks, he made his case for an age waiver Sustaining a and enlisted as a reservist in the Marine Corps. After two combat tours in Iraq, Tradition of he ran for Congress in Pennsylvania’s 5th Quality 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.
10 The President’s Report on Philanthropy and Endowments 2012–13 a year, I’ve seen them develop a different perspective on pov- erty 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 partici- pants, learned not only how much she can do as an individu- al, 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 Andrew Dunheimer Andrew mission to make a very big change in our community.”
“Knowing Bill Cahir’s story has made all of us—myself, the stu- Creating Project Cahir Corps has been, like the program itself, dents, the University—even more committed to the success a collective effort. Bart Cahir worked closely with the Univer- of the program,” says Emil Cunningham, a doctoral candidate sity to develop the program, and with his wife, Andrea, he is in higher education and the adviser for Project Cahir Corps. providing annual gifts matched by his employer, ExxonMobil, The program began to take shape when Bill’s brother, Bart to get it off the ground. John and Mary Anne have created an Cahir ’94 EMS, approached the Office of Student Affairs about endowment to ensure that Project Cahir Corps will continue honoring Bill at their alma mater, and the first group of twelve to honor their son and communicate his values to Penn State undergraduate participants, chosen by an advisory commit- students in perpetuity. They hope that other family members tee, started meeting with Emil in the fall of 2012. and friends will join in with more support, and they hope that the students of Project Cahir Corps will continue to evolve the Through readings, discussions, and guest speakers, the stu- program in response to the changing nature of poverty in the dents learned about poverty on the national and local level. United States and Centre County. By the spring, they were putting their knowledge into action with two hands-on projects: an outreach and education ef- “We had the opportunity to meet and speak with the stu-
Matt Bellingeri Matt fort with community partners, including the Centre County dents this year, and they have the intellect and the commit- Youth Service Bureau, and a strategic ment to move Bill’s legacy forward,” says Mary Anne. “We are plan for affordable housing in the State happy that it’s in their hands.” College area, prompted by the closing of two mobile home parks.
“The goal is to get students engaged to the point where they want to be John and Mary Anne Cahir (opposite), Sergeant Bill advocates both here in Centre County, › Cahir in Afghanistan (left), Emil Cunningham and Kelsey while they’re still in school, and in the Burton (above) communities they’ll join after gradua- tion,” says Emil. “Over the course of just Courtesy of MaryCourtesy Cahir Anne
The President’s Report on Philanthropy and Endowments 2012–13 11 Tomorrow’s technology begins with support for today’s top faculty
Penn State’s Department of Materials Science and Engineering has big dreams—and very, very small ones. Atom by atom, its twenty-eight faculty Ensuring Student members are pioneering technologies that can reduce the size and improve the functioning of everything from electronics that fit in your pocket to cancer treat- Opportunity ments 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 Enhancing Honors such as glass and familiar devices such as batteries, as well as researchers study- ing capacitors, transducers, and polymers. The Materials Science and Engineer- Education ing faculty has an extraordinary range of interests, but Dr. Gary L. Messing, the department head and distinguished professor of ceramic science, says, “They’re Redheaded Ninja Enriching the all innovators in their teaching and research. They’re all entrepreneurs.” Student And that’s why entrepreneur Don Hamer, himself a pioneer in the electronics Experience industry, has created the Hamer Professorship of Materials Science and Engineer- ing—the department’s first endowment of its kind. “Over the years, the Univer- sity’s materials faculty has helped my business in many ways,” says the founder Building Faculty and chairman of State of the Art, Inc., one of the world’s leading manufacturers Strength & of resistors. “This gift is ‘payback’ for the success and satisfaction that’s come from › Capacity my relationship with Penn State.” That relationship began in 1963, when Don came to State College to serve as Fostering chief engineer and then corporate research director for Erie Technological Prod- Discovery & ucts, a ceramic capacitors business. He already had a degree in ceramics engi- neering from the University of Illinois and an M.B.A. from the University of Chi- Creativity cago, 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 Sustaining a electrical engineering, and he launched State of the Art, Inc., the following year. Tradition of “I became friends with Rustum Roy, who was head of Penn State’s Materials Bellingeri Matt Quality 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 Librar- ies (where his wife and fellow Penn State graduate and philanthropist, Marie
1212 The President’s Report on Philanthropy and Endowments 2012–13 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 some- one 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 Redheaded Ninja 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 ex- plore 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.”
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
Matt Bellingeri Matt electronics and aerospace,” he says. “The world is unpredict- Don Hamer (above), Dr. Gary L. Messing able, and no one knows what will happen in the next twenty or thirty years, but › (below) I’m glad that Penn State will be a part of it.”
The President’s Report on Philanthropy and Endowments 2012–13 13 A partnership for central Pennsylvania patients takes another step forward
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 Penn- sylvania. Although it was a novel concept at the time, Rocco successfully built R.A. Ortenzio & Associates into a respected and busy outpatient physical therapy prac- tice—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 Ensuring Student or illness only received about thirty minutes of daily, focused rehabilitation treatment Opportunity in the traditional hospital setting. He envisioned a new kind of hospital—one fo- cused 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 Enhancing Honors would share in the patients’ journey to recovery. Education 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 Enriching the groundbreaking model of patient care to establish more than 60 rehabilitation hospi- Student tals 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 Experience than 110 long-term acute care hospitals, and more than 950 outpatient physical rehabilitation centers, but the headquarters of the company remain in the Harris- Building Faculty burg 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 Strength & the facility opened in July 2010. Now the Ortenzio Family Foundation has deepened Capacity that partnership by endowing the Rocco Ortenzio Chair of Physical Medicine and Rehabilitation.
Fostering “It’s truly a once-in-a-lifetime opportunity Discovery & to ensure a vibrant future at Penn State Creativity Hershey for a field that has been my › professional passion for more than fifty years,” says Rocco. “There’s already a su- Sustaining a perb level of care there, and I hope that Tradition of through the chair’s leadership in research and education, physical medicine and Quality 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
1414 The President’s Report on Philanthropy and Endowments 2012–13 endowment was instrumental in the medical center’s success- ful effort to recruit David R. Gater Jr., M.D., Ph.D., to lead the De- partment 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 In- jury & 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, en- thusiasm, and generosity of one of the most influential fami- lies 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 cutting- edge research and care. Gordon Wenzel Gordon “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 Nancy Ortenzio, Dr. Harold presence across the spectrum of the field. The Ortenzio Chair will help us to achieve › L. Paz, and Rocco Ortenzio all these goals.” (above), Dr. David R. Gater Jr. (opposite) 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 al- low 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.” Ken Smith Ken
The President’s Report on Philanthropy and Endowments 2012–13 15 A Class of 1933 graduate turns his success into support for students
Ensuring Student Opportunity
Enhancing Honors Education
Enriching the Student Experience
Nothing about coming to Penn State was easy for Russell E. Horn Sr. Very few Building Faculty young people in his tiny town wanted to go to college, but he was so determined Strength & that he started working in the local cigar factory at the age of 7 to earn money for Capacity his education. When Russell got to the University Park campus in 1929, he discov- ered 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 Fostering Penn State students seemed so different from me. I had to go home at the end of Discovery & the first semester and tell my father that I flunked. He just said, ‘Did you try? That’s all you can do.’” Creativity
Russell went back to Penn State, worked hard, and graduated in 1933 with his degree Sustaining a 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 Tradition of went on to found a series of companies that now exist as PACE Resources, Inc. And › Quality 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.
1616 The President’s Report on Philanthropy and Endowments 2012–13 “It’s a time of incredible growth and transformation for our demic support through more than 3,000 one-on-one sessions campus, and Mr. Horn’s gift will be very important in meeting a semester, along with in-class workshops that help hundreds the changing needs of our students and inspiring others to of students to develop skills in everything from writing to math. support the project,” says Chancellor Mukund Kulkarni. “His Dr. Janice Smith, coordinator of the center, says, “Academic sup- commitment has also had a tremendous emotional impact port services have traditionally been viewed as remedial, but for all of us. Through his leadership, he’s sharing his belief in that’s not the case today. There are some skills that are better the potential of Penn State Harrisburg and the potential of developed outside the classroom, and every student can ben- our students.” efit from the attention that a center like ours can offer.”
Originally conceived as an upper division college for juniors, The center’s activities currently take place “wherever we can seniors, and graduate students, Penn State Harrisburg began find a bit of space,” says Dr. Smith, but Russell’s gift will create admitting first-year students to all majors in 2004, and it now a dedicated area, designed for both individual and group ses- offers more than sixty degree programs, from associate to sions, where students can get the kind of assistance that wasn’t doctoral, that can be completed at the campus, as well as the available when he was struggling at Penn State. Despite chal- first two years of study for every undergraduate major offered lenges he faced, Russell credits his experiences at the University by the University. Over the last ten years, full-time enrollment with his ability to make a difference for today’s and tomorrow’s has increased by 82 percent, with more and more students Penn Staters. choosing to live on campus and seeking a complete under- graduate experience. “I always tell young people that you’ve succeeded when you can help other people,” he says. “Penn State gave me the “We’re committed to serving every student we accept,” says Dr. opportunity to get an education and earn a good living, and Don Holtzman, senior director of student services and special when I give, I’m just doing what I think I should do. Believe me, projects. “Right now, we’re using every square foot of space to I’ve received a lot more than I’ve given.” provide a wide range of services—academic advising, career counseling, support for honors and international students, tu- toring—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 op- portunities and help they need.”
Russell Horn’s gift has both launched the campaign for the center and provided funds for two key areas: a spiritual medita- tion center and a learning center. The former will be a flexible, nondenominational space where Penn State Harrisburg stu- dents—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.” Annamarie Maki Annamarie
Although construction on the project is a few years away, the Dr. Janice Smith (above), Russell E. Horn Sr. (opposite) campus has already renamed its existing Russell E. Horn Sr. › Megan Millo (opposite), Sharon and Ric Struthers Learning Center in his honor. The center’s professional staff, (above) graduate assistants, and undergraduate tutors provide aca-
The President’s Report on Philanthropy and Endowments 2012–13 17 Concepts in Philanthropy
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 Concepts in of the Trustee Matching Scholarship Program in 2008, when they created a scholar- Philanthropy ship 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 spend- able income from the endowment) every year in perpetuity, doubling the funds Awards & Honors 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 Endowment on June 30, 2014, or until the program hits its new goal of $120 million in Trustee Overview 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 University Budget if your company offers this benefit, you can search a database at www.matching. Summaries psu.edu or contact your human resources office. Opportunities also exist to lever- age University support for Early Career Professorships and graduate fellowships. To learn more, please visit giveto.psu.edu/support. Campaign Executive The benefits of gift planning Committee 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 scholar- ships 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 endow- ments’ 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 [email protected].
18 The President’s Report on Philanthropy and Endowments 2012–13 Annual gifts, endowments, and early activation lanthropy. Formal and informal gatherings and visits to labs and Jack and Libby Yoskowitz are in the process of endowing the classes allow donors to hear firsthand about the importance of honors scholarship that they first funded with annual support, their support and share their hopes for the students and faculty but in the meantime, they’re continuing to make yearly gifts who benefit. And to ensure that their vision is communicated equal to the endowment’s eventual income so that Schreyer far into the future, many donors work with Penn State to draft Scholars go on benefiting from their support (a strategy legacy statements describing their motivations for giving; these known as “early activation” of an endowment). Libby Yoskowitz statements are then shared with every future recipient of their says, “It’s been a great approach for us, and it can be a great support. If you would like to develop a legacy statement for approach for other people who may not be able to fund an an existing or planned gift, please contact the Office of Donor entire endowment right away, but who want to start helping Relations at 1-855-249-0222. 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. En- Charitable foundations dowments, which require a minimum gift of $20,000 or more “Last year, I simplified my will by giving my family members (depending upon type), generate income that supports the what would have been their inheritances,” says Don Hamer. donors’ goals in perpetuity, and they can often be funded over “I’m very glad I did this, so that they can use the funds now a period of five years. Penn State’s development staff can pro- rather than later. Also, I transferred most of my liquid assets to vide more information about using a combination of annual my charitable foundation. Now I’m required to give away more gifts and endowed funds to fulfill your own philanthropic goals. money every year, and that’s a wonderful dilemma to have.” Don’s gift to endow the Hamer Professorship of Materials Sci- ence and Engineering came from his foundation’s funds. Rocco Communicating a legacy and Nancy Ortenzio also chose to endow the Ortenzio Chair of When John and Mary Anne Cahir met with the first class of Physical Medicine and Rehabilitation through their foundation, Project Cahir Corps students, it was a powerful moment for which is one of the leading supporters of education and health everyone involved. “They were such an impressive group,” says care in the greater Harrisburg area. Charitable foundations are Mary Anne. “They all had the drive to make a difference in the nonprofit grant-making bodies that allow individuals and fami- world.” Kelsey Burton, one of the students, says, “It was such an lies (and other board members whom they appoint or elect) important experience to hear from the Cahirs about their son to direct shared resources to the causes that matter most to and what our work means to them. We kept their story in mind them. Penn State also offers an option for donors who would as a motivator throughout the whole year.” Meetings like the like the advantages of a family foundation without the com- Project Cahir Corps session are one of the many ways that Penn plexity, expense, and administrative burden of creating their State can connect you with those who benefit from your phi- 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 2013 28.2 01020304050 in millions of dollars
The President’s Report on Philanthropy and Endowments 2012–13 19 Endowment Minimum Gift Levels
Academic Endowments (PSUCGF), a donor-advised fund that offers many tax benefits Dean’s Chair $ 5,000,000 as well as a structure and online tools for engaging family and Department Naming $ 5,000,000 friends in philanthropic decision-making. You can learn more about PSUCGF on page 21. Department Head’s Chair $ 3,000,000 Faculty Chair $ 2,000,000 Leadership philanthropy Professorship $ 1,000,000 The right gift at the right time from the right leader can Early Career Professorship $ 500,000 have an impact far beyond its dollar value. “By making the first commitment to our student enrichment center, Russell Student Endowments Horn has given us tremendous confidence about the direc- Graduate Fellowship $ 250,000 tion that we’re headed as a campus and about fundraising for the project going forward,” says Penn State Harrisburg Distinguished Graduate Fellowship $ 250,000 Chancellor Mukund Kulkarni. “When he announced his gift Honors Scholarship $ 50,000 to our faculty and staff, all 300 people in the room gave him Undergraduate Scholarship $ 50,000 a standing ovation—we were so inspired and energized.” Destiny Scholarship $ 50,000 Leadership philanthropy like Russell Horn’s can shape the Enrichment Scholarship $ 50,000 University’s mission and challenge alumni and friends to Trustee Scholarship $ 50,000 make their own investments in the future of the institution. Renaissance Scholarship $ 30,000 Across the University, private support is needed to initi- ate new programs, take existing ones to higher levels, and transform the experience of Penn State students. Develop- Program Endowments ment staff members can work with you to find an oppor- Lectureship $ 100,000 tunity for leadership philanthropy that matches your own Research $ 50,000 passions and goals. Program Support $ 25,000 Libraries $ 25,000 Awards $ 20,000 Tina Hay Tina
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 “For many alumni and friends, this fund offers an im- way to maximize the impact and tax benefits of their portant alternative to other approaches to charitable philanthropy now have a new option: the Pennsylvania giving,” says Michael J. Degenhart, executive director State University Charitable Gift Fund, a donor-advised of gift planning. “Gifts to the fund can be made when fund (DAF) that allows Penn State supporters to invest they will be most financially advantageous for the their charitable dollars and direct contributions to both donor while allowing for tremendous flexibility in the the University and other nonprofit organizations. timing and targeting of charitable support. By part- nering with one of the leading DAF technology solu- “Penn Staters are recognized around the country for tions in the industry, we are also able to offer support- their commitment to giving back—not just to the ers a unique range of online tools that make giving University, but also to countless charities in their com- easier, simpler, and more gratifying than ever.” munities and around the globe,” says Rodney P. Kirsch, senior vice president for development and alumni Individuals who create an account through the relations. “The Pennsylvania State University Chari- PSUCGF will have access to Crown’s DonorFirst dash- table Gift Fund was created to help these generous board environment, a secure, web-based system that individuals and their families to manage and simplify makes it possible for donors to track contributions their philanthropic activities. This fund comes after and distributions, research and receive content about years of research and preparation, and we are proud to both Penn State and external grantees, and direct be offering our supporters one of the most innovative their support, twenty-four hours a day, from any loca- approaches to giving available today.” tion. Donors can also invite other family members or friends to use the dashboard to communicate and Through the Penn State University Charitable Gift share ideas about individual and family philanthropy. Fund (PSUCGF), donors can make gifts of cash, appre- ciated assets such as securities or real estate, and other “By minimizing the challenges and maximizing the resources to a fund that is invested and administered benefits of giving, both financial and personal, we on their behalf by the University’s partners, investment hope that the Penn State University Charitable Gift firm Kaspick & Company and DAF technology and ser- Fund will make the experience of philanthropy even vices provider Crown Philanthropic Solutions LLC. An more rewarding for our supporters,” says Kirsch. “We account can be established with a gift of $25,000, and see this fund as a way to encourage the Penn State it can be increased with additional contributions that spirit of philanthropy and to help our supporters con- each meet a $1,000 minimum. Donors may choose to nect with the people and the causes that matter most have their gifts invested in one of eight options, much to them.” like mutual funds, that reflect different growth and income strategies. Gifts can be counted as tax-deduct- For more information about the Penn State Univer- ible as soon as they are committed to the fund, allow- sity Charitable Gift Fund, please contact Michael J. ing donors to manage the impact of significant tax Degenhart, executive director of gift planning, at events. Donors may wait to direct their support until 1-888-800-9170 or [email protected]. 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. Tina Hay Tina
The President’s Report on Philanthropy and Endowments 2012–13 21 Philanthropy Awards & Honors
Each year, the Division of Development and Alumni Relations honors those indi- Concepts in viduals and companies that have been instrumental in our fundraising success. In Philanthropy 2013, we celebrated the following award winners.
Awards & Honors Philanthropists of the Year: Tracy and › Ted McCourtney Endowment This award recognizes an individual, couple, or family who has demonstrated excep- Overview tional 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. University Budget Summaries 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 Campaign 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 Executive of three undergraduate scholarships, which have helped more than 350 Liberal Committee 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 cre- ated 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 philanthrop- ic leadership for higher education.
2222 The President’s Report on Philanthropy and Endowments 2012–13 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 This award recognizes a corporation that has demonstrated served as fundraising volunteers, teachers, or mentors while dem- extraordinary generosity in promotion and support of The onstrating exceptional commitment and leadership in building Pennsylvania State University. Recipients are chosen on the basis philanthropic support for The Pennsylvania State University. 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 For more than forty-five years, General Electric has maintained of the University, and they have inspired thousands of other a partnership with Penn State that exemplifies both organiza- alumni and friends to give. David earned an associate degree tions’ commitment to educating a global workforce and pro- in business administration in 1971, and he is now chairman moting innovation. In that time, GE has provided $23 million of the board and director of research and development for in funding for philanthropy and sponsored research, includ- Gertrude Hawk Chocolates in Dunmore, Pennsylvania; Ann, ing more than $500,000 in the past year alone. These gifts and a 1972 graduate in individual and family studies, has a Rosen investments have made possible such programs as Faculty Method Bodywork practice based in Dunmore. Through their for the Future, a ten-year, $20 million initiative designed to leadership as co-chairs for Penn State Worthington Scranton increase the number of women and under-represented in For the Future: The Campaign for Penn State Students, the minority faculty members in engineering, related sciences, campus became the first to reach its goal—almost three and business. Partnering with such initiatives as the Applied years ahead of Professional Experience Program (APEX) in the Smeal College schedule—and of Business, GE sponsors collaborative projects that provide the Hawks have students with valuable real-world experiences. Programs like continued to chal- these help Penn State produce highly skilled graduates, many lenge their fellow of whom go on to become valued employees and leaders for supporters, raising GE. Penn State is among GE’s top five schools for recruitment, nearly $6 million to and the company currently employs about 1,270 Penn State date through their alumni. Those alumni recently came together as one team dedication, enthusi- to develop the GE-Penn State Alumni Scholarship Fund for asm, and focus. They engineering, business, and IST students. Further demonstrat- have also led by ing a shared vision between the company and the Univer- example with their sity, GE established this past year the GE Competing for the gift to create the Future Scholarship in Business and Engineering, which will David and Ann Hawk support exceptional undergraduate students in the College Student Success of Engineering and the Smeal College, and committed to Center, and through their family’s company, they have also sponsoring research in the College of Engineering on the UG supported scholarships and awards for leadership and service Mining Durathon Battery Advanced Packaging project, which
Rich Banick at the campus. Ann and David have served on the Penn State will study the feasibility of employing GE’s industrial battery in Worthington Scranton Advisory Board as well as boards and underground mine cars. “Penn campaign committees for many community organizations, State is a big part of GE’s future,” including the Greater Scranton Chamber of Commerce and GE Chairman and CEO Jeffrey the Lackawanna and Wayne Counties United Way. In 1989, Immelt has said, and Penn David was the first recipient of the Penn State Worthington State greatly values the Scranton Alumnus of the Year Award, and he was named a opportunity to continue Penn State Alumni Association Alumni Fellow in 2007. The developing this wide- campus and the University continue to recognize and rely ranging and forward-looking upon the leadership of David and Ann Hawk. partnership.
The President’s Report on Philanthropy and Endowments 2012–13 23 Endowment Overview
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 com- mingled with endowed funds to strategically fund the University’s liability covering post-retirement health care benefits for Penn State retirees. Additional income real- ized from the transfer to the LTIP relieves the University’s Concepts in operating budget of this ongoing obligation. Penn State’s Philanthropy accounting practices follow the guidelines of the Finan- cial Accounting Standards Board.
Awards & Honors
Endowed gifts are held by Penn State in perpetuity. The initial gift is invested, and a Endowment portion of the average annual investment return is spent for the purpose designated Overview 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 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 Campaign 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 Executive 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.
2424 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 strat- egy that seeks to maintain steady growth while minimizing the effects of volatile market fluctuations. Gifts to Endowment (Fiscal year ending June 30) The University provides 4.5 percent of the pooled endow- ment’s five-year average market value for spending on schol- 150 arships and educational programs. The University’s spending 136.3 policy of using rolling five-year average balances is intended to smooth out the “peaks” and “troughs” in the investment 120 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 90 76.2 known as “intergenerational equity.” 70.2 73.9 61.2 62.5 60 56.5 55.2 As of the end of fiscal 2013, endowment and similar funds 51.4 were valued at $2.03 billion, of which $1.93 billion was invested 42.4 in the Long-Term Investment Pool (LTIP). Similar funds, which 30 include charitable remainder trusts, charitable gift annui- ties, and other life income funds in addition to some donor- restricted funds, represented $95.7 million in assets that are not 0 directly invested in the Long-Term Investment Pool. ’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)
0 500 1000 1500 2000 2500 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 averaged 8.3 percent per year, net of gifts and expenses, since endowed funds June 30, 1993. These results demonstrate long-term growth (Fiscal year ending June 30, 2013) across various financial ups and downs, such as the bull mar- ket of the 1990s, the steep decline at the turn of the century and subsequent economic recovery, and the recent down- 12% turn 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. 18% 61% The Penn State Endowment Pool is broadly diversified, with 18 percent in defensive investments (fixed income) as of n Growth June 30, 2013; 61 percent in growth (both U.S. and non-U.S. 9% n Diversifying equities); 9 percent in diversifying (hedged strategies); and n Defensive 12 percent in a variety of real-return investments including n Real Return 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 For the fiscal year ending June 30, 2013, the Endowment Pool generations. and similar funds saw an increase of $174 million, and these funds have grown a cumulative $748 million over the last five In the year ending June 30, 2013, global equity markets con- years. Over this same period, the endowment has provided tinued the rally that began in March of 2008. Non-U.S. equi- $337 million of program support, including $71 million in ties trailed U.S. equities, which experienced significant gains. fiscal 2013. These amounts reflect the impact of investment Non-U.S. public equities, as measured by the MSCI All Country returns and generous giving, including consistent support for World ex U.S. Index, returned 13.6 percent, while US equities scholarships and University programs. as measured by S&P 500 gained 20.6 percent. Meanwhile, fixed income returns were negative as the Barclays Capital For fiscal 2013, the endowment’s investment return was 11.3 Aggregate Bond Index earned a total return of -0.7 percent in percent and has averaged 5.2 percent per year over the last fiscal 2013, following several years of positive returns. five years. In the longer term, Penn State’s endowment has Leah Eder Leah
26 The President’s Report on Philanthropy and Endowments 2012–13 Average Annualized Total Returns for Periods Ending June 30, 2013 (Net of fees) PENN STATE INVESTMENT COUNCIL Total returns include interest, dividends, and market appreciation 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 12 11.3%11.3% provides direct oversight of the endowment and long- term investment program, and it regularly reviews asset allocation, new asset classes, investment strategies, and 8.3% 10 manager performance. 8.6% 8.3% Council Members
David J. Gray, (Chair) Senior vice president for finance and business/treasurer, 5.2%5.2% The Pennsylvania State University
David Branigan Executive director, Office of Investment Management, The Pennsylvania State University
Blake Gall, CFA 20-year Founder, president, Micro Plus, Plus Investment Management 10-year
02468 Carmen Gigliotti 5-year Managing director, Private Market Group, DuPont Capital Management 1-year Gary A. Glynn President and chief investment officer (retired), Long-Term Investment Performance of Endowment US Steel & Carnegie Pension Fund The assets of Penn State’s endowment are commingled with Edward R. Hintz Jr. the University’s Long-Term Investment Pool (LTIP), which is a President, Hintz Capital Management broadly diversified investment portfolio. As of June 30, 2013, the LTIP had a total market value of $2.94 billion and earned Arthur D. Miltenberger an investment return of 11.3 percent, excluding the impact Vice president and chief financial officer (retired), of new gifts and spending. While stock market returns often R.K. Mellon & Sons fluctuate from year to year, the endowment’s well-diversified Colleen Ostrowski portfolio can weather short-term fluctuations and gener- Vice president and treasurer, ITT Corporation ate positive returns over long periods of time. Net of all fees and expenses, the Penn State endowment has averaged 8.6 J. David Rogers percent growth per year over the last ten years, and 8.3 per- Chief executive officer, J.D. Capital Management cent over the last twenty years, allowing the endowment to maintain steady inflation-adjusted spending and to achieve Linda B. Strumpf Chief investment officer (retired), long-term intergenerational equity. The Helmsley Charitable Trust Leah Eder Leah
The President’s Report on Philanthropy and Endowments 2012–13 27 University Budget Summaries
Income (Fiscal year ending June 30)
0.5% Concepts in 4.7% 6.4% Philanthropy 34.7% 8.5% dollars in thousands Awards & Honors n Tuition and fees $ 1,478,354 n Medical Center/Clinic* 1,265,596 n Restricted funds 662,849 Endowment n Auxiliary enterprises 362,081 15.5% Overview n State appropriation 272,431 n Philanthropy and other 202,191 n AgricultureAgr (federal)iculture 21,262 University Budget Total $4,264,764
Summaries Philanthropy and other 29.7% *Includes $6,536,000 in state and federal medical assistance funds, › provided by the Pennsylvania Dept. of Public Welfare State appropriation Campaign
Executive Auxiliary enterprises Committee Expenditure (Fiscal year ending June 30) Restricted Funds 2.3% 1.2% dollars in thousands 2.7% Medical Center/Clinic 2.8% n Medical Center/Clinic $ 1,265,596 29.6% 5.0% n InstructionTuition and Fees 746,199 n Research 576,620 8.1% n Academic support 375,798 n Auxiliary enterprise 362,081 n Institutional support 344,428 n Physical plant 211,512 8.5% n Public service 119,271 n Student services 114,277 n Pennsylvania College of Technology 98,457 n Student aid 50,525 8.8% Student Aid 17.5% Total $4,264,764 13.5% Pennsylvania College of Technology
Student services 28 The President’s Report on Philanthropy and Endowments 2012–13 Public Service
Physical Plant
Inst support
Aux enterprise
Academic support
Research
Instruction and academic support
Medical Sources of Gifts Received 2012–13 | Where the $237.8 million came from
11%
Sources Amounts Number of donors 12% 50% n Individuals $ 117,575,494 185,248 Alumni 87,597,929 72,111 Friends 29,977,565 113,137 n Corporations 63,298,429 6,620 n Foundations 29,703,841 467 n Organizations 27,201,516 1,058 Total $237,779,280 193,393 27% Organizations
Foundations
Corporations Designated Purposes of Gifts Received 2012–13 | Where the $237.8 million went Indivuals .13% .91% 1.77% Purposes Amounts 1.94% .01% n Property, buildings, equipment $ 65,756,503 4.59% n Student aid 58,693,966 n Other purposes* 54,868,210 27.66% 15.23% n Research 36,212,007 n Faculty resources 10,914,405 n Public services and extension 4,616,968 n Academic divisions 4,202,845 n Unrestricted University-wide 2,167,199 n Library resources 315,896 n Physical plant maintenance 31,281 23.08% TotalPhysical plant maintenanc e $237,779,280
*This category includes gifts to the Children’s Miracle Network, 24.68% multipurposelibrary funds, and gifts awaiting designation by donors.
unrestricted
Academic Div
The President’s Report on Philanthropy and Endowments 2012–13 29 Public services and extension
faculty Resources
Research
other purposes
Student Aid
Properties, Bldgs, Equip 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 Unit Amount Abington $1,273,990 Hershey $40,720,474 Agricultural Sciences 8,209,413 Information Sciences & Technology 7,917,412 Altoona 1,554,686 Intercollegiate Athletics 50,463,097 Arts & Architecture 3,081,621 Lehigh Valley 241,929 Beaver 310,859 Liberal Arts 6,225,943 Behrend 11,328,530 Mont Alto 797,202 Berks 458,038 New Kensington 304,590 Brandywine 442,778 Outreach 5,031,811 Communications 1,471,270 Research & Graduate School 3,983,097 Dickinson School of Law 922,094 Schreyer Honors College 1,357,785 DuBois 699,918 Schuylkill 800,175 Earth & Mineral Sciences 5,641,896 Shenango 394,418 Eberly College of Science 18,925,944 Smeal College of Business 7,872,456 Education 2,796,101 Student Affairs 1,941,688 Educational Equity 613,234 Undergraduate Education 7,936,300 Engineering 20,428,283 University Libraries 4,140,999 Fayette, The Eberly Campus 231,013 University-wide 5,658,015 Great Valley 356,138 Wilkes-Barre 514,045 Greater Allegheny 277,196 Worthington Scranton 592,400 Harrisburg 2,379,968 York 593,221 Hazleton 1,037,267 Health & Human Development 7,851,986 TOTAL $237,779,280
30 The President’s Report on Philanthropy and Endowments 2012–13 Growth in Private Support and Donor Base 300
274.8 250 237.8
203.4 208.7 200 190.3 181.5 182.1 165.2 151.3 150 Gift receipts 130.9
100
50
0 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 in millions of dollars
400 353.3 350
300 284.7 277.5 273.8 265.2 263.6
250 223.7 200 200.9 173.0 163.4 150 New commitments 100 50
0 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 in millions of dollars
191,712 185,183 193,393 181,918 183,712 132,791 200000 143,517 163,111 120,680 132,983 150000
Number of donors 100000
50000
0 ’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 John M. Arnold Edward J. Beckwith Richard K. Dandrea Campaign Chair At-large Member Chair, Planned Giving Liaison, Penn State Advisory Council Board of Trustees Richard J. Barry At-large Member Dennis P. Brenckle Linda J. Gall Chair, Penn State Chair, Stewardship E. Lee Beard Milton S. Hershey Committee Campaign Vice Chair Medical Center Chair, Campus Campaign Committee Edward R. Hintz Committees Honorary Campaign James S. Broadhurst Chair Past Chair, Board of Trustees, The Pennsylvania State University
3232 The President’s Report on Philanthropy and Endowments 2012–13 Helen Skade Hintz Edward P. Junker III Bruce R. Miller Catherine Shultz Rein John K. Tsui At-Large Member At-large Member Campaign Vice Chair Chair, Corporate At-large Member Chair, College Relations Committee William A. Jaffe Jeffery L. King Committees At-large Member At-large Member Douglas L. Rock Arthur J. Nagle At-large Member Martha B. Jordan Keith E. Masser Honorary Campaign Chair, Annual Giving Chair, Board of Trustees Chair Richard K. Struthers Committee At-large Member Robert E. Poole Chair, Leadership Gifts Committee
The President’s Report on Philanthropy and Endowments 2012–13 33 Ex Officio Members
Rodney A. Erickson David J. Gray President, Senior Vice President The Pennsylvania State for Finance and University Business/Treasurer, The Pennsylvania State Robert N. Pangborn University Interim Executive Vice President and Provost, Rodney P. Kirsch The Pennsylvania State Senior Vice President University for Development and Alumni Relations, The Pennsylvania State University
34 The President’s Report on Philanthropy and Endowments 2012–13 and opposite) (back cover Eder Leah
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 [email protected]
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.
The Pennsylvania State University is committed to the policy that all persons shall have equal access to programs, facilities, admission and employment without regard to personal characteristics not related to ability, performance, or qualifica- tions as determined by University policy or by state or federal authorities. It is the policy of the University to maintain an academic and work environment free of discrimination, including harassment. The Pennsylvania State University prohibits discrimination and harassment against any person because of age, ancestry, color, disability or handicap, genetic informa- tion, national origin, race, religious creed, sex, sexual orientation, gender identity, or veteran status and retaliation due to the reporting of discrimination or harassment. Discrimination, harassment, or retaliation against faculty, staff, or students will not be tolerated at The Pennsylvania State University. Direct all inquiries regarding this Nondiscrimination Policy to the Affirmative Action Director, The Pennsylvania State University, 328 Boucke Building, University Park, PA 16802-2801: tel. 814-863-0471/TTY. U. Ed. DEV 14-03 ajs
COLOPHON Cover: 100# Sterling Dull Cover FSC Text: 80# Sterling Dull Text FSC Fonts: 11/14 Myriad Pro Light