President's Report on Philanthropy And

PRESIDENT’S REPORT ON PHILANTHROPY AND ENDOWMENTS 2014–15 TABLE OF CONTENTS Message from the President 2 Interviews with Nicholas P. Jones, Executive Vice President and Provost 4 Rodney P. Kirsch, Senior Vice President for Development and Alumni Relations 6 Martha Barnhart Jordan, Volunteer Chair, Penn State Advisory Council on Philanthropy 8 David J. Gray, Senior Vice President for Business & Finance/Treasurer 10 Madlyn L. Hanes, Vice President for Commonwealth Campuses 12 A. Craig Hillemeier, M.D., Senior Vice President for Health Affairs 14 Damon Sims, Vice President for Student Affairs 16 Sandy Barbour, Athletic Director 18 Lee Beard, Chair, Volunteer Engagement Task Force 20 Philanthropy Awards 22 Endowment Overview 24 Investment Management Update 26 University Budget Summaries 28 Penn State Advisory Council on Philanthropy 32 Two nighttime views: Old Main (opposite, above) and the Millennium Science Complex (opposite, below) “WHAT’S NEXT?”It’s a question we’re asking every day at Penn State. A MESSAGE FROM Students are wondering what their own futures hold as they prepare for lives and careers in a rapidly PRESIDENT BARRON changing and increasingly interconnected world. Faculty are tackling shared challenges—and finding shared solutions—in fields ranging from health care to energy to homeland security. And those of us charged with leading the University forward are asking ourselves and the Penn State community how we can best fulfill our land-grant mission of education, research, and service in the twenty-first century. In this special issue of The President’s Report on Philanthropy and Endowments, I have invited nine of my fellow Penn State leaders to share their thoughts about what’s next for the University—and how alumni and friends can be our partners in making it happen. A year after the successful conclusion of For the Future: The Campaign for Penn State Students, it’s a time for reflection on the vast importance of philanthropy at Penn State and the role that private gifts will play in furthering our ambitions and those of our students. A time for reflection—but not a time for rest. As Martha Jordan says later in this issue, we can’t “hit the pause button” on Penn State’s progress or on the giving that supports it. In the following pages, you’ll find our fundraising results and endowment performance from the past year, and you’ll learn how private support today can determine what we’ll be tomorrow. At Penn State Hershey, for example, the new Institute for Personalized Medicine is gathering the data that will guide more effective treatment for conditions such as cancer and diabetes. The whole course of a student’s career may be shaped by international study, intercollegiate athletics, volunteer leadership, or hands-on research. Partnerships between Penn State campuses and local companies can drive prosperity for communities across the Commonwealth and beyond. Philanthropy can fuel all of these efforts and countless other Penn State initiatives. Turn the page, and you’ll learn from Provost Nick Jones about the University’s ambitious new strategic plan. But while the plan may guide us, our supporters will lead us. What’s next for Penn State? That’s up to all of us, working FPO and investing together. Thank you for inspiring our ambition with your past philanthropy, and thank you for being a part of our future. ESincerely, Eric J. Barron A student in a lab at Innovation Park (left) and the scene between classes at University Park (opposite) 2 3 NICHOLAS P. JONES EXECUTIVE VICE PRESIDENT AND PROVOST “Our future will depend upon our supporters…” Nick Jones is a man with a Jones. “We have the intellectual shared possibilities,” says Jones. plan—a University-wide strategic capital and institutional will to “By investing in the arts and plan, two years in the making, pioneer new modes of teaching humanities, we can make Penn that sets Penn State’s course and learning. Private support will State a thought leader as well through the end of this decade. be essential to furthering those as a cultural destination for the Almost from the moment that innovations and helping students people of Pennsylvania.” the former Johns Hopkins engi- from every economic back- neering dean set foot on campus ground to discover their own And through the plan’s fifth in 2013, he has been guiding the potential for impact.” priority, leveraging and maximiz- effort to define the University’s ing Penn State’s digital priorities for the 2015–2016 to That impact may come in the assets, the full wealth of the 2019–2020 academic years and form of new approaches to University’s resources can be position the institution’s current managing and stewarding global made available to new audienc- strengths to be a springboard for resources and promoting human es and in new ways. “Enhancing even greater success. health. “Water, energy, food— our digital infrastructure may be our faculty and students have a twenty-first century mandate, “One thing is clear: Our future the capacity and commitment but it’s founded on Penn State’s will depend upon the leadership to lead the way in meeting the historic mission of service,” says of our supporters as well as the world’s needs, and donors can Jones. “In fact, every aspect of leadership of our administration support them in that effort,” says the strategic plan connects to and faculty,” he says. “The vision Jones. “We also have a formi- that mission and represents an that has emerged in the strategic dable set of talent focused on opportunity for Penn Staters to planning process is ambitious, interdisciplinary approaches to support our traditional values as but it can’t become a reality personalized health and medical well as our future strength.” unless the University’s alumni and education. With the help of pri- friends are as inspired by it as vate support, we can keep those those of us within the institution.” moving forward while we build partnerships that will improve To be released in January 2016, health within Pennsylvania and the strategic plan outlines five elsewhere.” areas of focus that intersect with the goals of programs across The plan also emphasizes both the University as well as with im- the oldest and the newest mis- peratives outlined by President sions of higher education. “Even Barron. “The plan’s first priority is as we capitalize on our strengths to use Penn State’s size, scope, in science and engineering, we and reach to transform higher must remember that every hu- education and make it accessible man advance has been guided to all sectors of society,” says by thinkers who can imagine our The Verne M. Willaman Gateway to the Sciences in the spring (opposite) and an art class in the Peace Garden, the 1997 senior class gift, on an autumn day (right) 5 “A campaign isn’t just about raising money…” When Rod Kirsch arrived at Penn “The Penn State family has come with the University’s fundraising Campaigns are also the means And in Penn State’s next cam- State in 1996 to lead the Univer- to define itself through giving success: the power of campaigns to “growing the family,” says paign, too. Planning is now sity’s fundraising operation, he back,” Kirsch says. “Whether it’s themselves. “Throughout higher Kirsch. In fiscal year 1985, as the underway for a new fundraising had to hit the ground running. a gift to THON or a commitment education, we’ve recognized that University’s first major fundraising effort that will take its objectives The Grand Destiny campaign to scholarships, supporting stu- a focused fundraising effort is a campaign began, 68,740 donors from the institutional imperatives was about to begin, and Kirsch dent-athletes through the Nittany powerful way for an institution gave a total of $33 million. In outlined by President Barron and a team of staff and volun- Lion Club or supporting faculty to communicate its ambitions fiscal year 2014, as the For the and the University’s emerging teers were charged with reaching through an endowment, Penn and engage alumni and friends Future campaign came to an strategic plan.“We’re still in very a $1 billion goal. That goal was Staters really do experience their as partners,” says Kirsch. “A end, approximately 192,000 do- early discussions about what a shattered when the campaign pride in the University as a call campaign isn’t just about raising nors gave a total of $342 million. new campaign might look like concluded in 2003 with nearly to action. As we work toward an money—it’s about raising aware- Kirsch says, “Over three decades and where it might take us,” $1.4 billion raised. Four years even more ambitious vision for ness and envisioning what might and three campaigns, Penn says Kirsch. “What we do know, later, For the Future: The Cam- our future, Penn State can count be possible, too. After the For Staters have formed a culture of though, is that Penn State will be paign for Penn State Students on our graduates and others who the Future campaign, our donors philanthropy and a community even stronger at the end of it.” began quietly with a $1.65 billion believe in our mission.” know more than ever about Penn of support that are the envy of behind-the-scenes target—and State’s potential for leadership, many institutions and that will ended with a total of almost $2.2 And that relationship has grown and through their gifts, they’re be a source of strength for us far billion. Why have the University’s and deepened because of an- challenging us to live up to that into the future.” campaigns been so successful? other phenomenon Kirsch credits potential.” The rousing wrap-up of For the Future: The Campaign for Penn State Students (above) and the WE ARE sculpture, a gift from the Class of 2013 (below) RODNEY P.

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