Private Gift Endowment Minimums To Increase

July 18, 2001
University Park, Pa.— To reinforce Penn State’s efforts to attract faculty and students of outstanding quality, the University’s Board of Trustees yesterday (July 17) approved raising minimum levels for student, faculty and other kinds of endowments that are created through private giving. The new minimums take effect July 1, 2002. The current levels for these endowments have remained unchanged since 1992.

Endowments are gifts that the University invests to provide support in perpetuity for programs designated by the donors.

“Because these levels have remained constant for a decade, Penn State has become less competitive in its ability to use endowments to support talented faculty and students, and students with exceptional financial needs,” said University President Graham Spanier.

Spanier also noted that the current undergraduate scholarship endowment minimum produces annual income that covers only about one-fifth of an academic year’s tuition. Income from some scholarship endowments no longer covers even the cost of books and class materials.

Current minimum endowment levels for graduate fellowships do not cover tuition, let alone a stipend to provide living expenses.

The Trustees’ action came in response to the recommendations of the Named Endowments Task Force. Appointed in May 2000 by Vice President for Development and Alumni Relations Rod Kirsch and chaired by William L. Weiss, University Trustee and chairman emeritus of Ameritech Corp., the task force evaluated Penn State’s current

endowment levels relative to real costs and Penn State’s competitive position relative to other institutions. The task force was also charged with recommending new minimum levels for consideration by the Board of Trustees.

The task force collected benchmarking information from Big Ten universities, private institutions, and internal surveys of Penn State’s academic deans and directors of development, among other sources. The task force also consulted with donor and volunteer groups. In the cases where endowments have been long established at Penn State, minimum levels were consistently lower than those of other universities. This translates to a weak competitive position for Penn State to recruit and retain the nation’s best available faculty members and students.

The task force also recommended that endowment levels be reviewed every five years. About one-third of all endowments established throughout Penn State’s 148-year history have been created since the Grand Destiny fund-raising campaign began on July 1, 1996.

The Board of Trustees endorsed the following new minimum endowment levels. Endowment guidelines signed prior to July 1, 2002, will be honored at the previous levels.

New Minimum                                   Previous Minimum       

FACULTY ENDOWMENTS

Dean’s Chair                                      $5,000,000                                         $3,000,000

Department Head’s Chair                  $3,000,000                                         $2,000,000

Faculty Chair                                      $2,000,000                                           $1,500,000

Professorship                                      $1,000,000                                          $500,000

Career Development Professorship    $500,000                                              $250,000

Faculty Fellowships, previously endowed at a minimum of $250,000, will no longer be endowed, since their distinctiveness and strategic niche have largely been replaced by career development professorships.

STUDENT ENDOWMENTS

Graduate Fellowship                          $250,000                                             $100,000

Undergraduate Scholarship                 $50,000                                               $25,000

Academic Excellence Scholarship       $150,000                                             $100,000

            (college specific)        

Academic Excellence Scholarship       $150,000                                             $50,000

            (general)

Renaissance Scholarship                     $30,000                                               $15,000

OTHER ENDOWMENTS

Awards                                               $20,000                                               $10,000

Libraries                                              $25,000                                               $10,000

Research                                              $50,000                                               $10,000

Lectureship                                         $100,000                                             $50,000

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