PRESIDENT’S REPORT ON PHILANTHROPY AND ENDOWMENTS 2016–17
Message from the President Message from the Vice President
2
4
6
Create Transformative Experiences
12
Open Doors
Impact the World
18
Philanthropy Awards
24
Endowment Overview
28
Investment Management Update
30
Penn State Investment Council
31
University Budget and Philanthropy Summary
32
Campaign Executive Committee
36
On the cover: Penn State’s 2016 Homecoming celebration included the Color Run, an international event based on the traditional Hindu spring festival known as Holi, celebrated in India and Nepal. Nicknamed “The Happiest 5K on the Planet,” the Color Run was created to promote health and happiness, and it has occurred more than 170 times and in over 30 countries.
MESSAGE FROM THE PRESIDENT
A year ago, when I shared the last edition of the President’s Report on Philanthropy and Endowments, the University had just begun a new fundraising initiative unlike any other in our history. A Greater Penn State for 21st Century Excellence represents our commitment to fulfilling our traditional land-grant mission of serving the public good in an era of rapid change, global connections, and urgent issues—from the cost of higher education to the growing need for energy—that can’t wait for solutions. It envisions Penn State as a leader in revolutionizing what it will mean to be a great public university in the decades to come. And it envisions our alumni and friends—all of you—as leaders, too. In this issue of the President’s Report, we celebrate the campaign’s first year, one of the most successful in Penn State’s history, and the generosity of the nearly 223,000 donors who have already stepped forward to support A Greater Penn State. The pages that follow also honor many of the gifts from our past that have laid the groundwork and inspired the ambitions of the campaign. From the impact of scholarships on students across the Commonwealth to the growth of Penn State’s prestige and presence around the world, your support has made us aim even higher for our future. This report invites you to consider how you can join us in that effort. I’m especially pleased to share information, on pages 11 and 23, about several opportunities, some available only through the current fiscal year, to leverage your gifts with matching funds from the University. The Open Doors Scholarship Program in particular reflects my personal belief that we must pioneer new ways of providing our students with the support they need—financially, academically, and socially—to earn their degrees and join the community of Penn Staters, like you, who are transforming our institution and the world. Thank you for your past generosity and your partnership in making us A Greater Penn State.
Sincerely,
E Eric J. Barron President, The Pennsylvania State University
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MESSAGE FROM THE VICE PRESIDENT Penn State is my alma mater as well as my family home and professional home, where I began my career in development. I was proud and grateful beyond measure when I was able to return to the University last fall as vice president for development and alumni relations. There could be no greater welcome than the fundraising results that Penn State achieved in fiscal year 2016–2017. In this edition of the President’s Report on Philanthropy and Endowments, you can learn in detail about both the generosity of Penn Staters during the first year of the Greater Penn State campaign and the way in which the University has carefully managed and
spent the support that alumni and friends have offered in the past. The $304.6 million in commitments raised is the third highest annual total in Penn State’s history, a remarkable achievement by our donors, our fundraising volunteers, and our development staff. It also represents the new standard to which we must hold ourselves. To achieve the goals of the Greater Penn State campaign—$1.6 billion across the University by June 30, 2021—we must achieve a similar level of support every year going forward. It won’t be easy, but I believe that with our shared belief in
the campaign’s vision of Penn State as the twenty-first century’s great public university, we will succeed. We will do it with the ambition of our students, faculty, and academic leadership, which is limitless. We will do it with the leadership of our development team and volunteers, including our new campaign chair, Rick Sokolov, who is committed to building upon the extraordinary foundation created by our departing chair (and continuing volunteer), Martha Jordan. And we will do it with the investment that all of you—our most generous alumni and friends—are
willing to make in the future of the University. Thank you for joining with us in creating A Greater Penn State for 21st Century Excellence. Sincerely,
O. Richard Bundy III Vice President for Development and Alumni Relations
3
OPEN DOORS
Private support can not only bring talented students from every background to Penn State—it can help them to graduate on time and on track to successful careers and lives.
Inspired by the University’s historic tradition of educational access and opportunity, thousands of alumni and friends have created scholarships that now provide more than $61 million each year in support for students across the University. A Greater Penn State is building on that success with innovative partnerships and programs that will keep the door to higher education open for generations to come.
OPEN DOORS
Q: What is the real impact of scholarship support? A: Scholarships can be our most effective means of helping students with high financial need to reduce their educational debt and graduate on time, and that can have an impact on their whole future. Even after families have secured all the state and federal funding for which they’re eligible, there is currently a gap for undergraduate students, ranging from an annual average of $6,000 per student at our campuses to $9,000 per student at University Park, that is covered primar-
ily through federal parent loans, private alternative loans, or additional income. When students try to work multiple jobs while they’re in school to reduce their debt, they take fewer credits, and then they extend their education to a fifth or sixth year, which creates the need to take out more loans. That delay and that debt become burdens not only to students, but to society as well. They enter the professional workforce later, they put off purchasing cars and homes, they can’t contribute to their communities and the economy at the highest level. The support that we’ve received in the last few campaigns has allowed us to make great inroads on this problem, and more than 25 percent of Penn State undergraduates now receive scholarships every year. Every day, though, I see students who need more help in solving the puzzle of funding their educations. Through the programming and endowments that are priorities in the Greater Penn State campaign, we can fill in some of the missing pieces and help students to do what they’re here to do: earn a degree and become successful in their careers and lives. —Anita Leone is the associate director of University scholarships and special programs in Penn State’s Office of Student Aid, where she oversees the awarding of funds to students in need.
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ERIC LOHR Sophomore, Penn State Fayette, The Eberly Campus Major: Biology Hometown: Uniontown, PA “I’m the first person in my family to go to college. After my father passed away when I was twelve, my mother and I became homeless. My grandparents ended up taking me in, and they’ve done so much for me, but I knew that I would have to figure out my own
KRISTINA PERIEFF
way to pay for college. And I knew
Senior, World Campus
that I eventually wanted to go to
Major: Labor and Employment
medical school—I’ve been through
Relations
pain in my life, and I’ve seen my
Hometown: Cumming, GA
family in pain, and I want to prevent suffering in other people’s lives if I
“I joined the Marine Corps because
can. I’d like to join Doctors Without
I wanted to prove that I could be a
Borders someday, or work with the
leader among leaders, and I chose
Centers for Disease Control and Pre-
Penn State’s World Campus for the
vention. But I’ve been worried about
same reason. As a career planner in the
how I would pay for two degrees. It’s
military, I help other Marines to better
overwhelming to think about being
themselves through education and
thousands and thousands of dollars
prepare for civilian life. I’m achieving
in debt. Scholarships have helped
the same goals for myself through my
me to put my mind at ease and
studies. The prestige of a Penn State
believe that I can get an education
degree will help me to earn promotions
and have an impact in the world.
while I’m in the military and transition
And it’s great to feel like I’m not to-
into a new career afterwards. An edu-
tally on my own. I want to make my
cation of this caliber costs more than
family proud, and I want to make my
military tuition assistance will cover,
scholarship donors proud, too.”
though. My husband and I have two young sons, and my income supports all of us. The stress of paying for my education, on top of everything that the military demands from you physically, mentally, and emotionally—that’s hard. Scholarships make it easier. This university has been so supportive and so welcoming even as it challenges me to go above and beyond. If I’m going to do something, I want to do it right, whether that’s in the Marine Corps or at Penn State.”
24%
OF PENN STATE STUDENTS ARE THE FIRST GENERATION IN THEIR FAMILY TO ATTEND COLLEGE.
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OPEN DOORS
VICTOR ARIYO Junior, University Park Major: Biomedical Engineering Hometown: Folcroft, PA “You don’t always know that you’re good at something until you have the chance to try. Penn State has unlocked my potential to succeed as a student and as a leader. In just my first two years at the University, I have presented at a national conference on biomedical research, I went to China as part of an engineering course, and I have become an officer in our campus chapter of the National Society of Black Engineers. These experiences have helped me to become more am-
74%
OF UNDERGRADUATES QUALIFY FOR NEEDBASED FINANCIAL AID
bitious for my future, and I’m planning to pursue a graduate degree and a career in prosthetics design. I’d like to start my own company someday, too. I wouldn’t be at this campus or at this point in my life without scholarships and without opportunities that donors have helped to create at Penn State, like the Millennium and Leonhard Scholars Programs and the Presidential Leadership Academy. I work hard, but I know that hard work isn’t enough. Every day, I’m thankful for the investment that other people have made in me.”
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OPENING DOORS, CREATING PARTNERSHIPS, CHANGING LIVES A Greater Penn State offers unprecedented opportunities for alumni and friends to become partners with the University and leverage their support with matching funds for scholarships directed to students with financial need. Through three new programs, our supporters can multiply the impact of their philanthropy and see both immediate and long-term results from investing in our institution and our students. Learn more at greaterpennstate.psu.edu.
3x 2x 2x
The Open Doors Scholarship Program triples the impact of endowed scholarships benefitting students enrolled in one of the five pilot programs designed to help students earn their degrees, reduce debt, and excel at Penn State by matching the donor’s gift with a 2:1 permanent match. Minimum gift: $30,000, which becomes an endowment of $90,000 with Penn State’s match. Program timeline: July 1, 2017, through June 30, 2018, or until available matching funds are expended.
The First-Time Endowed Scholarship Donor Matching Program provides a 1:1 permanent match for gifts from donors creating their first undergraduate scholarship endowment at Penn State to benefit students with need.
The Graduate Scholarship Matching Program allows donors to create a graduate scholarship or fellowship at half of the required minimum by providing a permanent 1:1 match to the donor’s gift to reach the full endowment level.
Minimum gift: $30,000 for a Renaissance Scholarship, which becomes an endowment of $60,000 with Penn State’s match. Other kinds of undergraduate need-based scholarships with higher minimum endowments are also eligible, including awards for honors scholars and student-athletes.
Minimum gift: $125,000 for a graduate scholarship, which becomes $250,000 with Penn State’s match; or $200,000 for a graduate fellowship, which becomes $400,000 with Penn State’s match. Program timeline: July 1, 2017, through June 30, 2018, or until available matching funds are expended.
Program timeline: July 1, 2017, through June 30, 2021, or until available matching funds are expended.
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CREATE TRANSFORMATIVE EXPERIENCES
Philanthropy will provide the opportunities—in our classrooms, on our campuses, and in the larger world—that let students and faculty discover their full potential and make a difference.
Thanks to the generosity of our supporters, Penn State is connecting students, citizens, and communities across the Commonwealth and around the globe: through international partnerships and opportunities that help Penn Staters to become global leaders, through digital innovations that expand the scope of our impact and ambitions, and through explorations in the arts and humanities which deepen our understanding of a changing world.
CREATE TRANSFORMATIVE EXPERIENCES
Q: How can private support for the arts and humanities help Penn State to fulfill our mission to serve the public good? A: As our world speeds up thanks to technology, the individual sometimes gets lost in the fray. The arts and humanities remind us to reflect upon the whole person and, ultimately, our whole society. Culture is an expression of our values and our history, a way of celebrating what we share and reflecting on our differences. Scientific advances get lots of attention, but the arts and humanities are another kind of R&D. They’re the cutting edge of how we think about what it means to be human. And the most challenging and exciting developments in the arts and humanities occur at top academic institutions like Penn State, where you have pioneers across many disciplines in conversation with each other. My own work is often inspired by data and science and made using technologies typically reserved for engineers. We have researchers at this University who are pursuing the next advances in fields ranging from medicine to manufacturing—and artists and thinkers who are exploring what those advances mean. Penn State students, regardless of their fields, grow through this dialogue. A student may be a business major, but they’ll be making decisions throughout their lives and careers based on the same concerns that are at the core of the arts and humanities. The University’s presence across the Commonwealth means that we are in a position to encourage dialogue about the “big issues” among the communities we serve, too. By keeping the arts and humanities strong at Penn State, we can make sure that our collective conversation and understanding advance along with our technology. —Rebecca Strzelec, professor of visual arts and program coordinator for visual arts studies at Penn State Altoona, served as the Penn State Laureate in 2016–2017. Her own work focuses on the creation of wearable art through digital processes.
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THE DONALD P. BELLISARIO MEDIA CENTER Nothing has done more to transform the experience of Penn State students and faculty than digital innovation, and investment in new technologies for education and discovery is a priority of A Greater Penn State for 21st Century Excellence. Donald P. Bellisario, a 1961 Penn State graduate and the creator of legendary television programs like Magnum P.I. and Quantum Leap, led the way this year with a $30 million commitment that includes the creation of the Donald P. Bellisario Media Center in the College of Communications that now bears his name as well. The Bellisario Media Center will bring together the college’s cutting-edge media programs from locations across the University Park campus to a new home in the Willard Building. Construction will begin in 2018 on a landmark space that will house the college’s television studios, its growing digital media agencies, student-media operations, and space for film and video creation. As Bellisario said when the gift was announced in April, “These new facilities will assure there is no limit to what future graduates of the Donald P. Bellisario College of Communications can achieve.”
In the Bellisario Media Center, the Department of FilmVideo and Media Studies will offer new state-of-the-art production facilities that help students break into a highly competitive and rapidly evolving industry. The center will provide an expanded range of technologies for the Bellisario College students and faculty, like Min Xian and Curt Chandler, who will lead the next revolution in multimedia journalism. Communications students put their education into action through live broadcasts from Penn State’s athletic facilities, and the Bellisario Media Center will offer the same equipment they’ll use at campus events and on the job after they graduate. Catie Grant directs CommAgency, which connects students with Penn State clients to produce more than a dozen video projects each year, and the innovative program will make its home in the Bellisario Media Center.
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CREATE TRANSFORMATIVE EXPERIENCES
GLOBAL ENGAGEMENT The issues of the future, from financial crises to epidemic disease to energy needs, will be global, and the next generation of leaders will need to communicate and collaborate with international peers and partners. Through philanthropy, Penn State’s alumni and friends are helping students and faculty to pursue the experiences, both on our campuses and across the globe, that will help them to confront the challenges and opportunities offered by an interconnected world. To learn more about the University’s commitment to international education, discovery, and partnership, please visit global.psu.edu.
The W. LaMarr Kopp International Achievement Award honors Penn State faculty who advance the University’s global mission through extraordinary education, research, and service. In 2017, Dr. Kyle L. Peck, professor of education and research fellow in the Department of Learning and Performance Systems and co-director for the Center for Online Innovation in Learning, received the award for his education reform work, speaking in sixteen countries, and his mentorship of nearly ninety international students at Penn State.
Support from the Tim Bhanubandh Endowment for Global Programs has launched the Global Alumni Ambassadors Program. Alumni living around the world are now hosting Penn State
1,500
MORE THAN INTERNATIONAL FACULTY, SCHOLARS, AND RESEARCHERS ARE PART OF THE PENN STATE COMMUNITY.
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events in their home countries, connecting current students to overseas internships and other opportunities, and extending the University’s presence around the world.
The Penn State spirit is going global through the Penn State Alumni Association Education Abroad Scholarship, which offers support to undergraduates from any campus who might not otherwise be able to afford international study. The endowment is one of many created through the shared gifts and shared commitment of Alumni Association members.
THE UNIVERSITY ENROLLS MORE THAN
10,000
Both undergraduates and graduate students from around the world are making Penn State stronger,
INTERNATIONAL STUDENTS EACH YEAR, AN INCREASE OF SINCE ALMOST 2012.
50%
and the Ardeth and Norman Frisbey International Student Award celebrates their contributions. Duverney Chaverra Rodriguez, a native of Colombia and an entomology Ph.D. candidate in the College of Agricultural Sciences, was recognized this year for his efforts to strengthen the college’s Latin American programs and for his work with outreach events, such as the annual Great Insect Fair, that positively affect the State College community.
2,500
MORE THAN PENN STATE UNDERGRADUATES PURSUED EDUCATIONAL EXPERIENCES OUTSIDE THE UNITED STATES IN 2015–2016, INCLUDING TRADITIONAL STUDY ABROAD, FACULTYLED SUMMER PROGRAMS, AND COURSES THAT INCLUDE AN EMBEDDED TRAVEL COMPONENT.
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IMPACT THE WORLD
With the visionary gifts of alumni and friends, we can tackle the world’s most pressing problems—and solve them.
Penn State’s land-grant mission is a commitment to education, research, and service on behalf of the public good, and private gifts have helped us to become a leader in fields ranging from human health to economic development to water, food, and energy security. A Greater Penn State will allow both the University and its supporters to be an even more powerful force for progress on issues that affect us all.
IMPACT THE WORLD
Q: Why is Penn State uniquely positioned to become the nation’s “Energy University”? A:
Since colonial days, Pennsylvania has been a leader in powering our country, and that has continued through the growth of the coal, petroleum, and natural gas industries. As the Commonwealth’s land-grant institution, Penn State has taken on the responsibility of applied research and workforce education in energy, and we now offer more degree programs in the field than any other university in the U.S. We have a strong portfolio in both fossil fuels and alternative energy, with some of the top-ranked programs in the country and an interdisciplinary culture that brings together expertise in departments and programs across the University. Most importantly, we have the will and the imagination to lead an energy transition that every one of us can be a part of. The reality is that most people don’t have a clue what happens behind the plug in the wall. Not understanding a few basics about that system hurts us as a nation, because without that knowledge we can’t make informed decisions about our energy future and what it means across the economy. Every student who comes to Penn State can and should develop the energy literacy to make them better leaders, regardless of their fields. Our students can see this kind of commitment in the work of Penn State faculty, who are collaborating in ways that capitalize on our strengths in everything from materials science and agriculture to human behavioral studies and public policy. They can see it on our campuses, which we’re beginning to use as living laboratories to test some of what we’re learning about next generation energy systems. And I hope that through the campaign, they’ll see it in the support of our donors, who can accelerate our progress and help us fulfill our promise as the “Energy University.” —Tom Richard is a professor of agricultural and biological engineering and director of the Institutes for Energy and the Environment.
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INVENT PENN STATE HAS NEW BACKED NEARLY TECHNOLOGIES IN ITS FIRST TWO YEARS.
50
ANNIE GOHN Penn State Erie, The Behrend College Bachelor of Science, 2013 (Plastics Engineering Technology) Master of Manufacturing Management, 2016 Currently a doctoral candidate at Martin Luther University of Halle-Wittenberg, Germany and an engineering research associate at Penn State Behrend Hometown: Economy, PA “The study of plastics is fundamental to so many industries, from medicine to transportation to recycling, and I’m really excited to be a part of the polymers research that’s happening at Penn State Behrend. Through every step of my ed-
JACOB BYERS
ucation, philanthropy has allowed me to
Senior, Penn State Altoona
contribute more—and more quickly—to
Major: Business, with a minor in Entrepreneurship
a field that has the potential for impact
Hometown: Trafford, PA
on all our lives. From the scholarships that helped me to take summer courses
“I used to think that entrepreneurship just meant starting a company. Now, thanks
to the corporate partnerships that fueled
to my experience in the Sheetz Fellows Program, I understand that entrepre-
my master’s research and now allow me
neurship is really about leadership—understanding your strengths, being ac-
to work here as I earn my Ph.D., private
countable for your decisions and actions, taking ownership of your life and not
support has given me the resources and
just ownership of a business. I’ve been able to bring that idea to the internships
the opportunities to succeed. Thanks to
I’ve done with PepsiCo and Lockheed Martin, and it’s made me a better contrib-
industry funding, I work every day in a
utor to those companies. I do want to be an entrepreneur in the traditional sense,
state-of-the-art lab on real challenges,
too, and I’m testing the waters with my own digital marketing company. The
and our results are getting global rec-
mentors, the opportunities, the scholarships I’ve received through the Sheetz
ognition. It’s a great feeling, knowing
Fellows Program—I want those investments in me and my future to pay off, and
that you can change the world, and that
I’m working hard to make it happen.”
you’ve got the support to do it.”
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IMPACT THE WORLD HUMAN HEALTH The twenty-first century has the potential to be an era of extraordinary advances in the prevention, treatment, and cure of disease and overall improvement of health. Real solutions will require the collective efforts of biomedical scientists, physicians, social scientists—and an institution that can bring all of this expertise together. Past philanthropy to Penn State has created extraordinary facilities and supported pioneering researchers like those highlighted below, and the new campaign can help the University to be an even more important leader in the future of human health.
“Population medicine—the study of health issues and interventions across particular demographics—has so much potential to show us how we can improve outcomes for both individual patients and entire communities. It requires vast resources, though, to recruit hundreds of participants for surveys and trials and then to understand and work with the data that those processes yield. Private gifts can help us to be ambitious as we bring the tools of population medicine to the traditionally underserved communities of rural Pennsylvania.” —Kathryn Schmitz is a Penn State College of Medicine professor of public health sciences and associate director of population sciences for the Penn State Cancer Institute. She studies the impact of exercise interventions in the efficacy of cancer treatment. “If you look at the big advances in medicine—not incremental improvements, but the real leaps forward—they’re almost always funded through private support. Traditional funding sources, like the government, tend to invest in low-risk, lower-reward research. Philanthropists can be the entrepreneurs who seed the visionary ideas that may not yet meet criteria for mainstream grant funding but that can, in the end, solve the biggest problems in human health.” —Andrew Read is the Evan Pugh Professor of Biology and Entomology and Eberly Professor of Biotechnology. His research is directed toward slowing the evolution of drug-resistant “super bugs.” “At Penn State, we’re bringing developmental and social perspectives to bear on problems of human health, along with the University’s expertise in the life sciences, medicine, and other fields. That kind of interdisciplinary commitment can help us to create the right tools to address the urgent concerns of an aging population. Support from donors can accelerate the pace at which those tools, from smartphone apps to new designs for housing, get to the public and start improving lives.” —Martin J. Sliwinski is a professor of human development and family studies and director of the Center for Healthy Aging in the College of Health and Human Development. He studies the impact of stress, Alzheimer’s Disease, and other factors on cognitive function. From top: Penn State Hershey Cancer Institute, Millennium Science Complex, Biobehavioral Health Building 22 |
INVESTING IN PENNSYLVANIA’S FUTURE
MARGARET COSTA Bachelor of Science, 2017 (Biological Sciences and Health Professions) Currently a Penn State teaching assistant in organic chemistry Hometown: Smethport, PA “I’m planning to become a family physician specializing in child maltreatment. Preventing, detecting, and treating abuse can have an impact not just on a child’s immediate situation, but also on their health for the rest of their life. That’s not always covered in medical school, and through my minors in Human Development and Family Studies and Child Maltreatment
Penn State has long been the single largest contributor to the economy of the Commonwealth, generating more than $16 billion annually. In 2015, the University began a new era of economic leadership with Invent Penn State, a groundbreaking initiative to create a vibrant entrepreneurial ecosystem across Pennsylvania. Now Penn State supporters can invest along with the University through two new matching opportunities available through the end of the Greater Penn State campaign on June 30, 2021. Learn more at greaterpennstate. psu.edu. The Economic Development Incentive Matching Program This program provides a 1:1 match for gifts supporting programs or scholarships that promote economic development through the creation of new businesses and jobs. Penn State’s development team can provide details on opportunities that qualify for this program.
and Advocacy Studies, I learned about the risk factors and signs of maltreatment. I got an internship with the Children’s Advocacy Center of Centre County so that I could become even more prepared to help children and families. The support I received from the Vladimir de Lissovoy Program Support Endowment for the Protection of Children was such a great confirmation that other people are passionate about these issues, too, and I’m going to use the funds to help pay for the very expensive process of applying to medical school. If even one child can come back and tell me, years later, that I made a difference, it will all be worth it.”
The LaunchBox Matching Program Penn State’s LaunchBoxes and Innovation Hubs are helping entrepreneurs and businesses in communities across the Commonwealth to thrive. Each LaunchBox and Innovation Hub has the opportunity to secure a $1 million match from the University if donors contribute a total of $1 million to its endowment.
17
LAUNCHBOXES AND INNOVATION HUBS ARE NOW FUELING ECONOMIC DEVELOPMENT ACROSS THE COMMONWEALTH.
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PHILANTHROPY AWARDS
PHILANTHROPISTS OF THE YEAR: John “Jack” and Jeanette Dachille McWhirter
This award recognizes an individual or couple who has demonstrated exceptional generosity in the promotion and support of The Pennsyvlania State University. Through their philanthropy, the recipients have enhanced our ability to serve our students and to impact the world through world-class research, teaching, and outreach.
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Jack and Jeanette McWhirter have long been integral members of the Penn State family: as students, as alumni, as members of the University’s faculty and staff, and as founders and CEOs of Copper Beech Townhome Communities, which provides off-campus housing for students at Penn State and nineteen other universities across the nation. In recent years, the McWhirters have deepened their relationship to Penn State through their extraordinary philanthropy. Particularly transformational has been their giving to the Department of Chemical Engineering, where Jack launched an illustrious career as an entrepreneur, innovator, and educator. After earning a Ph.D. from the department in 1962, he became a star engineer at Union Carbide, and his innovations while at the company revolutionized how wastewater is treated in the United States. In 1986, he retired as vice president of the company and returned to Penn State to serve as professor of chemical engineering for fourteen years. Now, Jack and Jeanette are contributing to the department’s strength through gifts that promise to elevate the graduate program to global prominence. Last year, the University named the program in the McWhirters’ honor, making it the first named graduate program at the University. Their philanthropy has also extended to the University Libraries, where Jeanette worked as an undergraduate while earning a degree in microbiology. In 2012, the couple helped to make the Tombros and McWhirter Knowledge Commons a reality with the largest gift in the history of the Libraries, made jointly with Peter and Ann Tombros. The Knowledge Commons is now one of the most popular study spots on campus and a hub for collaborative, digitally driven learning. The couple’s impact on Penn State has also extended to Intercollegiate Athletics, with scholarships to support women’s basketball and women’s volleyball student-athletes. While the McWhirters are two of the most generous alumni in Penn State’s history, they see their giving as a natural response to an extraordinary experience. “Penn State is the greatest place in the world, and it has given us and our families so much,” they have said. “Giving back just feels like the right thing to do.”
FUNDRAISING VOLUNTEER OF THE YEAR: Cynthia King Throughout For the Future: The Campaign for Penn State Students and continuing today, Cynthia “Cindy” King has served as an integral member of the University Libraries Development Board, pursuing a passion for books and history while helping to advance the Libraries’ position as one of the top ten research libraries in North America—and inspiring others to do the same. With extensive experience serving as a volunteer for her church, her daughters’ schools, and other nonprofits near her family’s home in Malvern, Pennsylvania, Cindy has brought to her role great skill as a fundraiser, relationship-builder, and leader. She is passionate about connecting alumni and friends to the University and to each other, frequently bringing Penn Staters together to network and walk in the footsteps of George Washington in her family’s restored eighteenth-century farmhouse, adjacent to Valley Forge. While not herself a Penn State graduate, Cindy is deeply committed to the University that enabled both her husband, Jeff ’67 Bus, and one of the couple’s three daughters, Julie ’94 HHD, to build rewarding careers and lives. In encouraging others to support the University, Cindy has long led by example, making a gift to the Libraries early in the For the Future campaign to support the Tombros and McWhirter Knowledge Commons, a major campaign priority. In 2013, she and her family supported another major Libraries priority and advanced their passion for historical conservation with a gift to create the King Family Conservation Endowment, which is helping to preserve the Libraries’ special collections. In addition to the University Libraries, Cindy and Jeff have supported the Smeal College of Business, College of Education, Penn State Health, and Intercollegiate Athletics, and they are members of the Elm Circle of the Mount Nittany Society, which represents the pinnacle of philanthropy at Penn State. Their leadership has also benefited the entire University, and Cindy serves alongside Jeff and other leading University volunteers as a Presidential Counselor, advising President Barron on major University initiatives, including the University’s most recent fundraising campaign, A Greater Penn State for 21st Century Excellence.
The award recognizes an individual, couple, or group who has served as fundraising volunteers, teachers, or mentors while demonstrating exceptional commitment and leadership in building philanthropic support for The Pennsylvania State University.
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CORPORATE PARTNER OF THE YEAR: Schlumberger
This award recognizes a corporation that has demonstrated extraordinary generosity in promotion and support of The Pennsylvania State University. Recipients are chosen on the basis of consistency of giving, support to areas of greatest need, and impact across Penn State.
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In 2015, President Barron announced his plan for Penn State to become the “Energy University” for the nation, and we cannot achieve that distinction without strong relationships with some of the energy industry’s most prominent companies. Schlumberger is at the top of that list. As the world’s leading provider of technology for reservoir characterization, drilling, production, and processing to the oil and gas industry, Schlumberger works in more than eighty-five countries and employs approximately 100,000 people who represent over 140 nationalities. Through broad philanthropic support, research investments and software donations, Schlumberger has become a significant supporter of Penn State. Successful relationships like these are founded on points of mutual interest between the two organizations. For example, a commitment to workforce diversity is one of Schlumberger’s guiding principles, and Penn State has the infrastructure to help the company impact the composition of tomorrow’s workforce. Schlumberger has sponsored such University initiatives as the Women in Engineering Program, which provides incoming first-year female engineering students with a three-day interactive orientation; and Africa Array, a geosciences undergraduate program that includes a summer research experience with several colleges in South Africa. The industry leadership of Schlumberger is largely driven through the development of innovative technologies, which the company has shared with Penn State to strengthen the higher-education pipeline into the energy workforce: Through a gift-in-kind in 2014, Schlumberger provided software to the College of Earth and Mineral Sciences, which equips Penn State researchers and students with a suite of sophisticated analytical tools to optimize the efficiency of petroleum and natural gas recovery. This remarkable gift illustrates the impact of the collaboration between Penn State and Schlumberger: Not only will it enable great strides in our research, but it also ensures that our students are graduating proficient in the most advanced technologies in use—and it gives them a particular advantage if they choose to join the cadre of Penn State alumni in the oil and gas industry. As Penn State becomes a more prominent leader in tackling the global issue of energy supply, our collaboration with Schlumberger will play an even more vital role in our achievements.
ENDOWMENT OVERVIEW
The Long-Term Investment Pool (LTIP) is Penn State’s investment portfolio into which endowed funds (Endowment Pool) established at the University are invested. This commingled pool operates much like a mutual fund. Each endowment owns a number of units in the pool, just as an individual would purchase shares in a mutual fund. As with a mutual fund, the value of each unit at the time funds are invested in the pool determines how many units an individual fund acquires. Endowed gifts are held by Penn State in perpetuity. The initial gift is invested, and a portion of the average annual investment return is spent for the purpose designated by the donor. The remaining income is added to the principal as protection against inflation. Thus an endowed gift today will have relatively the same value for future generations. 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.
136.3
130.3 108.6 94.9
92.2 70.2
’08
76.2 73.9 61.2 62.5
’09
’10
’11
’12
’13
’14
’15
’16
’17
in millions of dollars
GIFTS TO ENDOWMENT (fiscal year ending June 30)
28 |
Long-Term Investment Performance of
7%
Endowment
4% Penn State’s endowment earned an investment return of 12.6 percent for the twelve months ending June 30, 2017, excluding the impact of new gifts and
17%
spending. While stock market returns often fluctuate from year to year, the endowment’s well-diversified portfolio
50%
can weather short-term fluctuations and generate positive returns over long periods of time. Net of all fees and expenses, the Penn State endowment has averaged investment returns of 5.6 percent per year over the last ten
22
%
years, and 7.3 percent over the last twenty years, allowing the endowment to maintain steady, inflation-adjusted spending and to achieve long-term
ENDOWMENT ASSET MIX n Public Equity n Private Capital n Fixed Income n Commodities n Diversifying
intergenerational equity.
12.6
The Penn State endowment portfolio is broadly diversified, with 17 percent in fixed income as of June 30, 2017; 50 percent in public equities (both U.S. and non-U.S.); and 22 percent in a variety of other (alternative) investments including real estate, private capital, venture capital, and energy. In addition, 4 percent is invested in commodities, while 7 percent is invested in diversifying assets. The majority of the endowment’s assets are equity-type investments that, over the long term, generate returns in excess of inflation in order to preserve the endowment’s purchasing power for future generations.
8.6 7.3
5.6
In the year ending June 30, 2017, global equity markets posted double digit returns, with the S&P 500 gaining 17.9 percent and MSCI All Country World Index ex-US returned 20.5 percent. Fixed income markets posted an overall return of -0.3 percent. 1-year
5-year
10-year 20-year
AVERAGE ANNUALIZED TOTAL RETURNS Fiscal year ending June 30, 2017 (Net of fees) Total returns include interest, dividends, and market appreciation.
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INVESTMENT MANAGEMENT UPDATE Penn State’s endowment investments consist of a diversified investment portfolio of public equities, bonds, private capital, and hedge funds in addition to real assets. In managing our investments, we adhere to a prudent, rational, long-term strategy that seeks to maintain steady growth while minimizing the effects of volatile market fluctuations. The University provides 4.5 percent of the pooled endowment’s five-year average market value for spending on scholarships and educational programs. The University’s spending policy of using rolling five-year average balances is intended to smooth out the “peaks” and “troughs” in the investment markets, saving a portion of the earnings in the good years to offset the less profitable years. This provides generous current spending while preserving future purchasing power, which is
known as “intergenerational equity.” As of the end of fiscal year 2017, endowment and similar funds were valued at $2.76 billion, of which $2.62 billion was invested in the LTIP. Similar funds, which include charitable remainder trusts, charitable gift annuities, and other life income funds in addition to some donor-restricted funds, represented $133 million in assets that are not directly invested in the LTIP. For the fiscal year ending June 30, 2017, the endowment increased $277 million, and has increased a cumulative $859 million over the last five years. Over this same period, the endowment has provided $425 million of program support, including $99 million in fiscal 2017. These amounts reflect the impact of investment returns and generous giving, net of
consistent support for scholarships and University programs. For fiscal year 2017, the endowment’s investment return was 12.6 percent and has averaged 8.6 percent per year over the last five years. In the longer term, Penn State’s endowment has averaged 7.3 percent per year, net of gifts and expenses, since June 30, 1997. These results demonstrate long-term growth across various financial ups and downs, such as the bull market of the 1990s, the steep decline at the turn of the century and subsequent economic recovery, and the recent downturn due to the credit crisis. Penn State’s diversified approach has allowed the endowment to support program spending, such as scholarships and faculty positions, while maintaining real, inflation-adjusted growth for the future generations.
MARKET VALUE OF PENN STATE’S ENDOWMENTS AND SIMILAR FUNDS (Fiscal year ending June 30) Endowment Similar Funds Pool
2008 $ 1,488 $ 128
Total Value
$ 1,616
1,184 97 1,281 2009 1,341 98 1,439 2010 1,708 123 1,831 2011 1,765 90 1,855 2012 1,933 96 2,029 2013 2,285 114 2,399 2014 2,376 116 2,492 2015 2,347 124 2,471 2016 2,624 133 2,758 2017
The University now reports results for both endowed and similar funds and non-endowed funds as commingled assets of the Long-Term Investment Pool (LTIP). The non-endowed funds, formerly invested in Penn State’s operating pool of fixed-income securities, have been commingled with endowed funds to strategically fund the University’s liability covering post-retirement health care benefits for Penn State retirees. Additional income realized from the transfer to the LTIP relieves the University’s operating budget of this ongoing obligation. Penn State’s accounting practices follow the guidelines of the Financial Accounting Standards Board.
30 |
PENN STATE INVESTMENT COUNCIL Penn State’s Board of Trustees created the Investment Council in response to the University’s increasing asset base and complex investment strategies. The council provides direct oversight of the endowment and long-term investment program, and regularly reviews asset allocation, new asset classes, investment strategies, and manager performance. COUNCIL MEMBERS for Fiscal Year 2016–17 David J. Gray, Chair Senior Vice President for Finance and Business/Treasurer The Pennsylvania State University David E. Branigan Chief Executive Officer, Office of Investment Management The Pennsylvania State University Blake Gall, CFA Founder and President MicroPlusPlus Investment Management
Carmen Gigliotti Managing Director (retired) DuPont Capital Management
J. David Rogers Chief Executive Officer J.D. Capital Management, LLC
Edward R. Hintz Jr. President Hintz Capital Management, Inc.
Gary A. Glynn President and Chief Investment Officer (retired) U.S. Steel & Carnegie Pension Fund
Colleen Ostrowski Sr. Vice President and Treasurer Visa
Joseph B. Markovich Managing Director J.P. Morgan Private Bank
UNIVERSITY BUDGET AND PHILANTHROPY SUMMARY .4%
% 5.9
4.5%
INCOME (Fiscal year ending June 30, 2017) dollars in thousands
8.4 %
.1% 35
n Medical Center/Clinic* $1,804,431
n Tuition and fees
1,683,956
n Restricted funds
664,879
n Auxiliary enterprises
432,694
n State appropriation
301,833
n Philanthropy and other
12.9%
n Agriculture (federal) Total
232,045 21,866
$5,141,704
*Includes state and federal medical assistance funding provided through the PA Department of Human Services
Agriculture
32.8%
Philanthropy and other State appropriation
1.4%
2.1%
2.6%
EXPENDITURE Restricted Funds
%
2.6 4. 7%
Auxiliary enterprises
(Fiscal year ending June 30, 2017)
Tuition/Fees 7.2%
% 35.1
8.4%
dollars in thousands
n Medical Center/Clinic
$1,804,431
n Instruction Hospital
827,164
n Research
574,870
n Academic support
448,492
n Auxiliary enterprise
432,694
n Institutional support
368,542
n Physical plant
239,594
n Student service
134,139
n Public services n Penn College
7% 8.
n Student aid
0% 16.
11.2 %
Student Aid Total
132,765 109,403 69,610
$5,141,704
Pennsylvania College of Technology Public Service Student services
32 |
Physical Plant
% 10.5
SOURCES OF GIFTS RECEIVED 2016–17 Where the $203 million came from
Sources
Amounts
n Individuals
21.9%
Alumni 53.2%
$ 107,823,568
Friends
n Foundations
214,135
71,348
41,391,233
29,263,380
142,787
6,631
1,240
44,469,753
442
21,331,059
$ 202,887,760
222,448
.4
%
Organizations Total
66,432,335
n Corporations n Organizations
Number of donors
14
Foundations
.5% .4% .02%
Corporations Individuals
2.1%
2.6%
%
4.8
DESIGNATED PURPOSES OF GIFTS RECEIVED 2016–17
6.
8%
Where the $203 million went .8% 39
n Other purposes*
$ 80,766,360
n Student aid
28,653,136
n Property, buildings, equipment
13,701,028
n Faculty resources n Public services and extension
14.0%
58,748,146
n Research
9,644,317
5,194,963
■ Academic divisions
n Unrestricted University-wide
1,081,471
n Library resources n Physical plant maintenance Total
4,268,553 787,071
42,715 $202,887,760
29.0
%
Physical plant maintenance
*This category includes gifts to the Children’s Miracle Network, THON, multipurpose funds, and gifts awaiting designation by donors.
library
unrestricted Academic Div Public Svc & Ext Faculty Resources
| 33
GROWTH IN PRIVATE SUPPORT AND DONOR BASE
271.1
274.8 237.8 203.4 181.5
182.1
’08
’09
226.0 229.9
208.7
202.9
Gift receipts ’10
’11
’12
’13
’14
’15
’16
’17
in millions of dollars
353.3
342.5 304.6
277.5
273.8
265.2
263.6 223.7
223.9 195.1
173.0
New commitments ’08
’09
’10
’11
’12
’13
’14
’15
’16
’17
in millions of dollars
222,448
191,712 185,183
193,393 172,140 190,502 183,843
183,712
181,918 163,111
’08
34 |
’09
’10
’11
’12
’13
’14
’15
’16
’17
Number of donors
GIFTS DESIGNATED TO SPECIFIC UNITS 2016–17 Unit
Amount
Abington
Unit
$373,338
Agricultural Sciences
Amount
Hershey
12,084,933
37,485,547
Information Sciences & Technology
Altoona
2,386,988
Intercollegiate Athletics
Arts & Architecture
477,523 34,543,447
5,369,498
Lehigh Valley
241,458
Beaver
296,760
Liberal Arts
5,754,330
Behrend
4,567,836
Mont Alto
774,499
Berks
917,660
New Kensington
320,493
Brandywine
439,487
Bellisario College of Communications
3,371,746
Dickinson School of Law
908,368
DuBois
Nursing
979,807
Outreach
5,165,515
Penn State Law
525,621
341,926
Schreyer Honors College
15,270,742
Earth & Mineral Sciences
6,440,698
Schuylkill
708,356
Eberly College of Science
5,937,438
Shenango
145,914
Education
1,561,775
Smeal College of Business
Educational Equity
1,955,624
Engineering
10,572,579
Fayette, The Eberly Campus
8,780,587
Student Affairs
337,628
1,197,749
Undergraduate Education
4,904,645
University Libraries
1,888,637
Great Valley
117,393
University-wide
9,573,999
Greater Allegheny
83,609
Wilkes-Barre
2,453,315
Harrisburg
2,181,177
Worthington Scranton
1,674,702
Hazleton
832,566
York
613,933
Health & Human Development
8,327,914
TOTAL
$202,887,760
THE STATE’S SHARE OF PENN STATE’S BUDGET Year
2017–18
$5,675,676,000
2016–17
2015–16 2014–15
Total Budget*
State Appropriation**
$ 302,823,000***
5,141,704,000
4,901,693,000
4,638,793,000
2013–14
4,415,596,000
2012–13
4,264,764,000
2011–12
4,121,627,000
2010–11
4,016,443,000
2009–10
3,761,608,000
2008–09
3,607,440,000
Percent of Total
5.3%
301,833,000
5.9%
294,949,000
6.0%
277,931,000
6.0%
275,931,000
6.3%
272,431,000
6.3%
272,431,000
6.6%
333,863,000
8.3%
333,863,000
9.0%
338,375,000
9.4%
*Prior to 2017–18, total budget included the Penn State Milton S. Hershey Medical Center. Beginning in 2017–18, all operations of Penn State Health are included. **Excludes state and federal medical assistance funding provided to Penn State Milton S. Hershey Medical Center through the Pennsylvania Department of Human Services. ***Estimated.
| 35
CAMPAIGN EXECUTIVE COMMITTEE
Fiscal Year 2016–17
Richard S. Sokolov ’71 Lib Chair
Richard H. Bard ’69 Eng
E. Lee Beard ’99h
Elizabeth A. Fetter ’80 Com
Naren K. Gursahaney ’83 Eng
Martha B. Jordan ’76 Bus Vice Chair
Gregory T. Lucier ’86 Eng
36 |
Richard K. Dandrea ’77 Lib
Bryon G. Deysher ’77 Bus
Robert E. Fenza ’80 A&A Vice Chair
Helen S. Hintz ’60 HHD
James B. Ingram ’79 Agr Vice Chair
William A. Jaffe ’60 Com
J. Roger Moyer Jr. ’70 Bus
Arthur J. Nagle ’61 Lib
Robert E. Poole ’72 Bus
Thomas J. Sharbaugh ’73 Bus
Richard K. Struthers ’77 Bus
Peter G. Tombros ’64, ’68g Agr Vice Chair
James S. Broadhurst ’65 Lib
Edward R. Hintz ’59 Bus
EX OFFICIO MEMBERS
Eric J. Barron President, The Pennsylvania State University
David J. Gray Senior Vice President for Finance and Business/Treasurer, The Pennsylvania State University
Nicholas P. Jones Executive Vice President and Provost, The Pennsylvania State University
O. Richard Bundy III Vice President for Development and Alumni Relations, The Pennsylvania State University
| 37
This publication can also be found on the web at: giveto.psu.edu/publications For more information about philanthropy at Penn State, contact: O. Richard Bundy III Vice President for Development and Alumni Relations The Pennsylvania State University 105 Old Main University Park, PA 16802-1501 814-863-4826l
orb100@psu.edu
Photos in this report were provided by: Michelle Bixby Marissa Carney Linsey Fagan Robert Frank Mark Golaszewski Joni Morrison
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