State of the University Address
by Steven B. Sample
President, University of Southern California
February 26, 2003
A little more than nine years ago, the University of Southern
California embarked on a bold fundraising drive aptly named "Building
on Excellence." Today the entire Trojan Family celebrates the
completion of that campaign this past December 31, and the fact that
this campaign has proven to be the most successful university
fundraising campaign in history!
Many heroes contributed to the success of the Building on Excellence
campaign, but the biggest hero of all is Dr. Kenneth Leventhal. Dr.
Leventhal, who joined the USC Board of Trustees in 1977, served as the
national chairman of this fundraising drive and worked tirelessly to
make it the great success that we now celebrate. In fact, in the last
couple of years, Ken has essentially worked full?time on the campaign,
and he and his fellow trustees are to be congratulated on the pivotal
role they played. Collectively our trustees donated some $800 million
to the campaign. That in and of itself is worthy of note, but our
trustees also provided much of the impetus and enthusiasm for the
campaign as it progressed over the years.
I have had the privilege of working with four great board chairmen
during the past dozen years: Forrest Shumway, Malcolm Currie, John
Argue (who passed away last summer), and Stanley Gold. All of these
chairmen helped to define, and were deeply committed to, the vision and
goals behind the Building on Excellence campaign.
USC's deans played a central role as well, serving as the backbone
of the campaign, while our faculty participated in the campaign to a
degree unprecedented in our history and, perhaps, in the history of all
of higher education. Members of our staff were dependable, hard?working
contributors to the campaign, especially those who worked full?time in
fundraising. Alumni leaders, not just in this country but around the
world, participated in important ways. Sometimes the best person to
solicit funds from a potential donor is someone who has led the way by
personally donating a considerable amount of money himself. Our donors
amplified their support of USC by letting others know about the great
things this university is accomplishing and how much more it can
accomplish. Finally, our friends and neighbors, especially those in the
communities surrounding our University Park and Health Sciences
campuses, continued to provide their steadfast support for our academic
mission, research programs, and community?building efforts.
I want to review some of the financial aspects of this campaign, but
before doing so, let me remind all of us that our principal raison
d'etre is our students. From freshmen to postdoctorals, they come to
USC for an education that will enhance their lives and their careers.
Some of them are the first in their families to attend or graduate from
college; many of them are still unsure about themselves and their
career paths. But all are seeking knowledge, inspiration, new
friendships and experiences, and challenges. They want to make a
difference in their own lives, in our university community, and in the
world; and it is our sacred mission to provide the instructional,
research, and community?service opportunities which are necessary for
their intellectual growth and personal development.
Financial Goals of the Campaign
Our campaign total now stands at $2.85 billion or, more precisely,
$2,850,143,933. As I indicated earlier, ours is the most successful
campaign in the history of higher education. We're ahead of Harvard,
which is number three, by a quarter of a billion dollars, and we?re
just slightly ahead ? by $6 million ? of second?place Columbia
University. Now, $6 million is a tiny fraction of $2.85 billion: one
might compare it to winning a high?scoring basketball game by only one
point. But small margin or no, we?ll take the win!
When we began the Building on Excellence campaign in 1993, we were
met with grave skepticism, bordering on disbelief, that we would be
able to meet our original goal of raising $1 billion in seven years.
But we quickly achieved a level of momentum that propelled us beyond
our original goal in just four and a half years. So we raised the bar
to $1.5 billion, and then exceeded that goal in the sixth year of the
campaign. So we raised the goal to $2 billion and extended the duration
of the campaign to nine years, through December 31, 2002. We surpassed
the $2 billion mark in early 2002. When I conveyed this fact to the
trustees, they said, "Steve, no more!" So we let the campaign run its
course through December 31 and wound up exceeding our goal by $850
One of the things that is sometimes confusing about a fundraising
campaign in a university is the difference between cash donations
actually received in a given calendar year, versus progress toward a
goal that includes not only cash gifts but also pledges. We compete
with other universities in both cash received in a single year, and
gifts and pledges accumulated over a period of several years as part of
a multi?year campaign.
It's very important not to double count when a pledge is monetized.
A university may receive a pledge for $10 million and count that in its
campaign total, and then a few years later, when the donor monetizes
his pledge, the university may be tempted to double count both the
pledge and the cash in its campaign total. Some universities succumb to
this temptation, but USC does not.
A major purpose of a campaign is not simply to accumulate gifts and
pledges over a period of years, but also to increase the level of
annual cash received. When we began this campaign, USC's annual cash
received was at a level of about $100 million. We hoped that by the end
of the campaign, we would be close to $200 million a year in cash
received. Doubling the annual cash received is a common goal in
fundraising campaigns. But our performance far outstripped our goal. By
fiscal year 2001 USC had reached a steady?state level of cash received
of $300 million. And last fiscal year we received $585 million in cash,
which was by far the highest in the country among all universities, and
well ahead of Harvard.
Moreover, about 80 percent of the pledges in our Building on
Excellence campaign have been monetized as of this date. That's very
surprising. One would expect at the end of a campaign to have perhaps
40 percent of the campaign total, or even 50 percent, still in the form
of pledges. But in actual fact, almost all of our pledges have been
Key Factors in the Success of the Campaign
How did we achieve what is truly a spectacular success? I think it
was due to three factors. First and foremost, the affection and support
of the Trojan Family. Second, a new emphasis on "compelling excellence"
(which I shall discuss later on in more detail). And third, the
extensive and intensive involvement of our deans and faculty in the
fundraising process itself.
First, let me elaborate on why the
Trojan Family served as a key factor in the campaign. The Trojan Family
includes not just our alumni, but also our current students, parents,
faculty, staff, trustees, donors, neighbors, and athletic fans. All of
these people are, or can become, members of the Trojan Family through
their devotion to USC and its mission. We proudly say that membership
in the Trojan Family is lifelong and worldwide, and indeed the bonds
among Trojans around the world are extraordinarily strong. Let's take
for instance Dr. Ken Leventhal, our national campaign chairman whom I
mentioned earlier. He graduated from UCLA, not from USC. But Ken has
spent 26 years of his life as a USC trustee. He is a Trojan through and
through, and he and his wife Elaine gave $15 million as a naming gift
to USC's School of Accounting to help kick off the campaign.
The second key to the success
of this campaign is what we call compelling excellence. Shortly after
Alan Kreditor, a former dean of one of our professional schools, became
senior vice president for university advancement, he said to me, "You
know, Steve, I think this campaign is going to have to be structured a
little differently from other campaigns." I asked him what he meant,
and he replied: "We will of course depend upon the sentiment and
affection that members of the Trojan Family feel for this institution.
That will be an important basis for running the campaign. But we need a
second basis, and that is compelling excellence." I asked him what he
meant by "compelling excellence." He said, "Steve, imagine a potential
donor: he's a Stanford graduate; he doesn't feel any bond with USC;
indeed, if anything, he feels a bit of antipathy toward all things
Trojan. But his interests in terms of his private philanthropy are in a
particular field, and in that particular field our faculty are so
damned good that this donor feels compelled to make his gift to USC."
All of us quickly adopted Kreditor's philosophy. As a result, more
than half of the $2.85 billion raised in this campaign came from
non?USC alumni. Of course, I don't want to shortchange our own alumni.
Donations from USC alumni alone exceeded our original $1 billion
campaign goal. And the percentage of alumni making annual donations to
USC rose from about 13 percent at the campaign's beginning to 34
percent today. However, the fact that more than half of our campaign
money came from other universities' alumni stunned our competitors
This is the only university in history to have received four gifts,
each of which totaled
$100 million or more. Three of these mega?gifts came from non?alumni.
Walter Annenberg, a graduate of Penn, gave us $120 million at the
beginning of the campaign to establish the USC Annenberg Center for
Communication. Alfred Mann, a double graduate of UCLA, gave us $113
million to establish the Alfred E. Mann Institute for Biomedical
Engineering here at USC. The W. M. Keck Foundation gave us $110 million
as a naming gift for our School of Medicine, even though Robert Day,
chairman of the foundation that provided the gift, is not an alumnus of
USC. The fourth $100 million megagift again came from the Annenberg
Foundation, but this time our own alumna and trustee Wallis Annenberg
was a driving force behind the gift.
Part of our story about compelling excellence is based on the
dramatic improvement in the academic quality of USC's undergraduate
program. From the fall of 1991 to the fall of 2002, our average SAT
scores went from 1070 to 1335. That's a 265?point increase, which we
believe is unmatched by any other university in the last decade. In
addition to a mean SAT score of 1335, our incoming freshmen have a
grade point average of 3.96. USC now gets 10 applicants for every
opening in the freshman class, and most of our freshmen come from the
top 6 percent of their high school class.
Twelve years ago, about 10 percent of our entering freshman class
were legacies ? that is, students whose parents or grandparents are USC
alumni. As we cranked up the academic standards here at USC, there was
widespread concern that the percentage of legacies in the freshman
class would shrink. But do you know what happened? When we boosted our
standards, we suddenly were flooded with thousands of applications from
Trojan legacies. Today almost 20 percent of our freshman class are
legacies, so our commitment to the Trojan Family has actually been
enhanced by higher academic standards.
UCLA and UC Berkeley are two wonderful universities with which we
compete directly. USC passed UCLA in mean SAT scores a few years ago,
and we just learned that our mean SAT scores are now 35 points higher
than those of Berkeley.
A huge halo effect occurs when an undergraduate program is truly
excellent. Let me tell you a story. A few years ago someone conducted a
poll to determine the public's perception of the quality of law schools
in the United States. Survey respondents were asked to name the 10 best
law schools in the country. When the answers were compiled, the survey
found that the law school at Princeton University always placed near
the top. The problem is, Princeton doesn?t have a law school. But
Princeton does have one of the best undergraduate programs anywhere,
and that fact creates a halo which ultimately enhances the public's
perception of the quality of the university as a whole.
Then, too, our having won nine NCAA national championships, 24
conference championships, and a Heisman Trophy over the past nine years
contributed to the success of the Building on Excellence campaign. In
fact, USC's Department of Intercollegiate Athletics raised $142 million
as part of the campaign, which is by far the most that has ever been
raised by that department in a nine?year period.
Deans and Faculty
The third key to the success of
USC's Building on Excellence campaign was the high level of faculty and
decanal involvement. The greatest single asset we had in this campaign,
and indeed the greatest single asset we have in the university, is our
outstanding deans and faculty. They initiated most of the fundraising
efforts that comprised this campaign, and they often patiently spent
two to three years cultivating a potential donor. As it happens, donors
give to faculty and deans much more than they give to university
presidents and vice presidents. That's why practically every gift, and
every part of our endowment, is earmarked at the time it comes in. No
large pot of fungible funds resulted from this campaign; rather, our
fundraising consisted primarily of numerous investments made by
individual donors, which investments were then used to further the work
of specific faculty and programs in accordance with the donor's wishes.
What has been the overall result of the Building on Excellence
campaign? For one thing, USC's endowment has more than quadrupled. We
have 125 new endowed chairs and professorships, and we have 25 new and
expanded research institutes or centers, including the Casden Institute
for the Study of the Jewish Role in American Life, the Zilkha
Neurogenetic Institute, the Donald P. and Katherine B. Loker
Hydrocarbon Research Institute, the Annenberg Center for Communication,
the Daniel J. Epstein Department of Industrial and Systems Engineering,
the Norman Lear Center for the Study of Entertainment and Society, the
Alfred E. Mann Institute for Biomedical Engineering, the Wrigley
Institute for Environmental Studies, the Lloyd Greif Center for
Entrepreneurial Studies, and the Harold E. and Henrietta C. Lee Breast
Center. I'm pleased to say that most of these centers involve more than
one academic department or school, thereby directly supporting USC's
emphasis on interdisciplinary research and teaching.
As a result of our campaign we've received five school?naming gifts,
each of which was the largest gift of its kind at the time it was made.
The five schools are the USC Leventhal School of Accounting; the USC
Marshall School of Business; the USC Rossier School of Education; the
USC Thornton School of Music; and the Keck School of Medicine of USC.
These five naming gifts had an electrifying effect on the faculty and
students of those schools. The fact that a donor is not only willing to
put her money into a school or program, but also wants to associate her
family name with the school, makes a tremendous difference to the
faculty, students, and alumni of that school. As my wife Kathryn and I
travel around the country talking to alumni, we find that even those
alums who graduated many decades ago adopt the new name of the school
from which they graduated. Thus an alumnus might say, "I graduated in
1960 from the Marshall School of Business," even though the gift from
Gordon Marshall didn't change the name of the school until 1997.
An important asset of USC's overall fundraising effort is what we
call our Good Neighbors Campaign. Before we introduced this program, we
were raising about $100,000 a year from faculty and staff for United
Way. But in 1994 we launched our Good Neighbors Campaign as a way for
our faculty and staff to contribute to programs that directly benefit
the neighborhoods surrounding our two campuses. As a result, we're now
raising about $700,000 a year in voluntary contributions from faculty
and staff through the Good Neighbors Campaign. Over the past nine years
we've invested nearly $5 million in our neighborhoods, mainly through
joint ventures between USC-based organizations and community groups.
This is not an example of noblesse oblige; rather, it is USC forming
respectful partnerships with our neighbors to achieve common goals for
the community. The programs funded by the Good Neighbors Campaign were
a major factor in Time magazine's designating USC as the College of the
Year 2000. These community programs also aided USC's overall
fundraising and recruitment efforts, because students now come to USC
expecting to take part in community service. That is a special feature
of a USC undergraduate education which sets us apart and gives us a
competitive edge in student recruitment.
Through the Building on Excellence campaign we've received many
gifts for new or improved USC buildings and grounds, including funds to
create the Kathleen McCarthy Quadrangle. I believe this large green
expanse between Doheny Memorial Library and Leavey Library is one of
the most beautiful quads in America. We have also opened new facilities
and are building others, including the International Residential
College at Parkside; the Zilkha Neurogenetic Institute; the Harlyne J.
Norris Cancer Research Tower; the Jane Hoffman and J. Kristoffer
Popovich Hall for the Marshall School of Business, the Ralph and Goldy
Lewis Hall for the School of Policy, Planning, and Development; the
Ronald Tutor Hall of Engineering; the Louis J. and Helene Galen
Athletics Center; Dedeaux Field, which was completely renovated; an
addition to the Donald P. and Katherine B. Loker Hydrocarbon Research
Institute; the Katherine B. Loker Track Stadium; and the wonderful
renovation of Bovard Auditorium.
Our campaign greatly strengthened our balance sheet, primarily by
dramatically increasing our endowment. This improvement in our
financial strength led our chief business officer, Dennis Dougherty, to
devise a plan which would use inexpensive debt capital, backed by
endowment, to fund the largest building program in USC's history.
Indeed, over the next six years, we'll be building 1.4 million square
feet of new research laboratories, teaching facilities, and
The campaign also greatly expanded our donor count: in all, some
350,000 people made contributions to the Building on Excellence
campaign. The money they contributed is very important, but the
voluntary support that prompted their donations is equally as
important. As the saying goes, "Where your treasure is, there will your
heart be also." This campaign allowed us to strengthen our boards of
councilors and establish an outstanding Board of Overseers for the Keck
School of Medicine. This board of overseers comprises a wide variety of
exceptionally strong community leaders who genuinely believe that USC
and its medical school have the potential to transform Los Angeles in
the years ahead.
Transforming Los Angeles is a good segue to considering the future
of USC and its initiatives. Should we start a new campaign? If so,
when? And what should be the philosophy behind such a campaign? The
Keck School of Medicine of USC, the USC School of Engineering, and the
USC College of Letters, Arts and Sciences are already planning new
fundraising initiatives. Should we encourage those initiatives to go
forward on their own, or should we somehow weave them together into an
overall fundraising effort?
We are also involved in several other new initiatives to enhance
USC's academic and research mission. The College is in the process of
hiring 100 new senior faculty ? outstanding professors from around the
world ? who will increase the number of faculty in the College by 25
percent. The Keck School of Medicine is planning to hire 135 new
research faculty. The graduate student initiative established by
Provost Lloyd Armstrong last year involves raising $100 million to
support and improve graduate education. We're also continuing to
evaluate our graduate programs in order to ensure that the ones we
retain will be among the best in the country.
Provost Armstrong and a committee of leading faculty are currently
developing a new strategic plan for USC. Our first strategic plan,
which was approved by the trustees in 1994, and a subsequent update of
that plan approved in 1998, have both been resoundingly successful.
These strategic plans were tied to, and undergirded, the Building on
Excellence campaign. Because of the interplay between fundraising and
our strategic planning, we were able to reach many of our programmatic
goals ahead of time.
One of the greatest virtues of the 1994 plan and the 1998 update is
that they are concise documents. I have never seen an academic plan
before that was less than 150 pages long with 47 highest?priority
goals. But USC's strategic plan was only 15 pages long, including the
appendices; as a consequence, it was read by a large number of people.
The provost has given me his assurance that the new plan will also be
short and succinct.
In addition to brevity and focus, it is imperative that the new
strategic plan reflect and contribute to Los Angeles' new role as a
global city. After all, our university grew up with Los Angeles. When
USC was founded in 1880 in a small white?frame building, Los Angeles
was a dusty little village of 10,000 people. As the needs of a growing
Los Angeles became apparent, USC was there to meet those needs.
Today Los Angeles has a new role of global importance ? it is de
facto the capital city of the Pacific Rim. This vast region, which
includes much of the Americas and Asia, is playing an increasingly
important role in the world's economy and political structure. The
capital of the Pacific Rim is not Singapore or San Francisco or Tokyo
or Sydney; rather, the capital of the Pacific Rim is Los Angeles and
Southern California. USC needs to support this new role for Los
Angeles, not only for the good of the city, but also for the good of
our students. Indeed, USC's international appeal and focus is not
limited to Asia. Recently the London Times published an article
reporting that USC is now the favorite American university for British
students who choose to go abroad for their college education.
When Kathryn and I were recruited to USC in 1991, we found a healthy
sense of dissatisfaction on which to build. Everyone on campus was
saying, "We?re not satisfied with what we are today. We want to be
better, and we can be better." The first strategic plan grew out of
that sense of dissatisfaction and achieved spectacular results. I think
the new plan will also reflect this ambitious and healthy
We all know that momentum is a vector, having both a magnitude and a
direction. USC's momentum right now is very large, and its direction is
upward. Upward momentum is difficult to build but easy to lose.
Therefore we must continue to work hard and build on our current
success, especially since so many of the institutions with which we
compete are in a weakened condition.
This is decidedly not the time for us to slow up or take a breather.
Rather, we must keep pressing upward toward increasingly lofty goals.
We must fire up the furnaces of ambition to a white heat, and take
advantage of the extraordinary and exciting opportunities before us.
Thus our celebration of the completion of our Building on Excellence
campaign does not mark the close of our efforts to make USC a better
university; rather, it signals a new beginning.