Thank you very much, this is a great honor. I knew Rod Adams, he was a pioneer, a brilliant thinker, humble yet highly respected. A search of the internet shows much he accomplished for Stanford in the early and mid 1980s. He was a role model for me. This is my 29th year in endowment management, and in my early years I was inspired by people like Rod and the late Carl Schafer who was Princeton’s Treasurer in the early 1980s when I worked there.
I have just one thought that I want to convey to you in accepting this award, which is that America’s system of higher education is the best in the world, made possible by the gifts of many millions of US college and university graduates. It may surprise you to know that most of the alumni support was received in the 65 years since the end of World War II. Before that time philanthropic support for most of our colleges and universities was not widespread or very substantial. There were, of course, a series of very major gifts from such fine gentlemen with names like Mellon, Carnegie, Rockefeller and, in the case of the University of Rochester, George Eastman from Kodak.
What interests me about this history is that a large part of the post WWII alumni support was designated as permanent endowment, which I interpret as a sign of faith in the future of America. But I was also puzzled by the wide variation between schools in the level of support since WWII, particularly in gifts to endowment. This causes enormous differences in endowment growth rates, and consequently the level of support provided to faculty and students. It turns out that this compounding of giving to endowments is a much more important factor in endowment growth than investment performance. So what causes these differences in support? Are alumni of certain schools unhappy with their education? Are schools under-investing in their advancement and alumni relations programs? Do certain schools attract and graduate wealthier people? Well, I never did find conclusive answers to these questions, but I am now fairly certain that failed alumni relations and advancement programs have a lot to do with the differences in support. And I am also fairly certain that a good advancement program at a college or university generates gifts that amount to ten times the cost of running the program. As an investment officer for an endowment I take a holistic view. At Rochester, which was one of the under-supported schools I mention here, that holistic approach led me down a path I never expected to take, which was to lead our advancement efforts for several years and to help set in motion a process for correcting decades of under-investing in advancement. Fortunately, we now have an extraordinary President and Senior VP who lead the advancement effort, and I am back at my day job managing the endowment.
Thank you very much for all that you do for higher education.