Officials use fundraising engine in effort to eclipse rival

College Dean Melvyn P. Leffler wants the University to be one of the top 10 schools in the nation -- public or otherwise.

But after witnessing the University's state funding slow to a trickle in the early 1990s, Leffler and other officials were both worried about holding onto the University's academic reputation and anxious to lead the nation in specific areas such as medical research, business technology and entrepreneurial leadership.

To get there, he and other administrators, including President John T. Casteen III, are raising massive amounts of money through the University's Capital Campaign, and are in the process of changing the paradigm for public school funding.

"We could not sustain our position among the major universities without developing new sources of revenue," Casteen said.

As a result, they have embarked on an intense fundraising campaign, tapping the private market as an alternative to state funding.

"Private financing of public education is the most outstanding achievement" of the Campaign, Vice President for Development Bob Sweeney said.

Both deans and administrators agree that private donations have become crucial to the University's academic future.

"I fervently believe that the University of Virginia's position cannot be sustained without this level of private philanthropy," Sweeney said.

Officials and Board of Visitors members have been concerned about the University's finances since the late 1980s, when endowment funds grew at a sluggish pace. Then state support as a percentage of all University funding fell from around 27 percent in the late 1980s to about 12 percent in the 1990s.

"We anticipated major cuts in state support, and those cuts in fact happened," Director of Development and Communications Bill Sublette said.

In the early 1990s, Casteen and the administration began formulating a fundraising campaign, considering a goal of $500 million. By the time the campaign started in 1995, that goal had been pushed to $750 million. In February 1998, the goal was then set to an ambitious $1 billion, which was reached last December.

The University is one of 20 schools in the world that has aspired to reach $1 billion through fundraising, Sweeney said. Less than 10 have achieved it.

Now past the mark, and with over eight months left until the original Dec. 31 deadline, the fundraising continues.

The University has had fundraising efforts before, but nothing of the same scope. The last campaign, from 1980 to 1984, brought in a mere $145 million, about 13 percent of the current campaign's $1.1 billion.

The success of the new campaign was in part fueled by Sweeney's fundraising structure. On top of the University's departmental efforts, in which each school lobbies donors, he instituted a regional fundraising force, sweeping the nation to reach alumni and friends of the University.

Another approach is to encourage huge "leadership" gifts, donations that set the pace toward a goal, Sweeney said. Examples include $10 million for the University Library from David A. Harrison III, $13.3 million from the William H. and Alice T. Goodwin for the Darden school, and another $60 million for Darden from Frank Batten Sr.(see related article).

To win the donors' support, officials have to develop personal relationships with potential donors and find out what projects they are interested in funding, Sweeney said.

That means many college deans and officials have been hitting the road, with Casteen leading the way.

"It all starts at the top," said Gordon Burris, special assistant to the president. "He's the best fundraiser of them all."

Currently Casteen spends 35 percent of his time, or 60 percent of a 40-hour workweek, in fundraising activities. He has license to spend up to 80 percent of his time on the road, giving his second in command, Leonard W. Sandridge Jr., broad responsibilities as a result.

In addition to high-ranking officials schmoozing with potential donors, trained development officers also do a large share of the grunt work. Development officers travel to major cities throughout the nation, soliciting gifts from both big and small donors.

Such efforts have led to what University officials -- and the outside world -- consider a surprisingly successful campaign.

The second half of the story is how the University spends the proceeds.

Much funding goes to maintaining the University's academic ranking and making investments in areas in which the administration and donors believe the school can excel.

One such project was a $30 million expansion of the Law School grounds, making the school, already in the top 10, even more prominent in the nation.

"We've had deans from other law schools -- Chicago, Stanford -- say, 'you have the best law school complex in the country," said David H. Ibbeken, executive director of the Law School Foundation.

Meanwhile, the Commerce School recently installed a high-tech "bridge-center" to allow for cutting edge financial data analyses, at $1.3 million for construction and $7.3 million for software over five years, Commerce School Dean Carl Zeithaml said.

"It rivals anything that you would see on Wall Street," Zeithaml said. The Management Information Systems department is also strong, partly from gift funding.

"I think we are the leader in that," he said.

The Darden School is expecting to become the leader in entrepreneurial leadership through the Batten Institute.

The donor-funded Robertson Media Studies Center may be "one of the best uses of technology in science," and similarly funded medical research gives the University as good a chance as anyone to produce a cure for prostate cancer, Sweeney said.

Also, $35 million has been designated for the prestigious Jefferson Scholars program -- a program that attracts high-caliber students by providing full four-year scholarships.

Still, for all the spending on cutting-edge areas, officials contend that much of the funds must be spent maintaining operations at a competitive level with rivals.

"We still have absolutely compelling needs," Leffler said, listing needs such as more financial support for graduate students and faculty and more professor endowments.

Many donations take the form of endownments -- currently 857 professorships, fellowships and scholarships have been created with such endowments. With endowments, the donations are invested and the income is used to fund the specified purpose -- to keep a professor on staff, for example.

Endowment amounts are invested by a mostly independent group of managers in a portfolio of U.S. and foreign stocks, bonds, venture capital funds and hedge funds, University Treasurer Alice Handy said.

But not all the amount counted in the Capital Campaign is money in the bank.

Eleven percent of the present amount is in a category called "future support," money the University has not yet received, and may never be paid, should the donors later decide they can not afford the gifts.

Still, donors are coming through for the University, especially in Charlottesville, which Sublette said is an area nearly as generous as New York. Alumni and friends of the University make up 65 percent of contributors, and University fundraisers continue to try to build close relationships with alumni.

"The success of evolving and soliciting older alumni -- engaging and involving them," is a key aspect of the Campaign, Sweeney said.