USC pursues aggressive fundraising effort despite hard times

Just outside USC’s central administration building, a new wall honors a handful of very special donors, those whose gifts to the private university have totaled at least $100 million apiece over time. Among them are film director George Lucas, Los Angeles philanthropist Wallis Annenberg and the Keck Foundation.

But the wall still has plenty of empty marble for what USC hopes will be many additional names over the next six years, as the Los Angeles university pursues the most ambitious publicly announced fundraising goal ever in U.S. academia: $6 billion by 2018.

The USC campaign, made public in August, already has garnered three new gifts of at least $100 million each, along with speculation about the potential risks of setting such an ambitious goal in a weak economy.

“Coming out with a $6-billion goal certainly generated a lot of conversation in the field, and they did it in a very bold and brash way. But that is a part of the makeup of USC and is different from the way the Ivy Leagues might treat that kind of thing,” said Donald Fellows, president of Marts & Lundy, a prominent fundraising consulting firm with past ties to USC.

As it gears up for the drive, USC plans to double its fundraising staff by next year, to about 400, officials said. The university has recently opened development offices in San Francisco, New York and Washington and may follow with Chicago and Dallas. It also reaches out to potential donors through alumni offices in Shanghai, Hong Kong, Taipei, Seoul and Mumbai.

USC’s 300,000 or so living alumni are the campaign’s main focus, with special attention paid to about 50,000 people, companies and foundations the university believes can each afford to give at least $100,000 and possibly much more.

The university raised some eyebrows by announcing its target goal at a time it had only about $1 billion, or 17% of the total, in cash and pledges. (That figure has since risen to $1.4 billion.) Experts said that universities typically quietly raise funds for several years and don’t go public until 40% or 50% of the total is assured. By breaking that tradition, USC triggered questions about overconfidence, even possible arrogance, by an already wealthy school.

USC President C.L. Max Nikias, who last year succeeded Steven B. Sample, an accomplished fundraiser himself, said the university felt confident enough not to wait for more donations or for the economy to improve. He said he wants to ride the recovery while pushing the message that USC has boosted its academic reputation in recent years but needs a larger endowment to enter what he called the “undisputed academically elite status, so there is no question, no argument, that you belong in that club of world-class universities.”

Nikias acknowledged that the goal, and the timing, could be risky. Nonetheless, he said, “I’m not afraid to take that risk because I believe in the strategies and I believe in the Trojan family. I know it is more pressure on me and the rest of us. But, hey, why not?”

A new president often helps fuel university fundraising, said Rae Goldsmith, a vice president of the Council for Advancement and Support of Education, based in Washington, D.C. “When a new leader comes on board, it provides some momentum and enthusiasm,” she said.

Nikias, an electrical engineer, charms many donors with his Mediterranean manners and the Greek-Cypriot accent from his youth. He likes to quote the philosopher Cicero on a citizen’s obligations. He says he spends about 80% of his time on some aspect of fundraising and personally handles all gifts of at least $5 million, courting potential donors during dinner parties and football games and trying to match their interests with campus needs.

At a recent holiday dinner at the university’s presidential mansion in San Marino, 200 guests included older alumni who have listed USC as a beneficiary in their wills. Those in attendance heard student carolers and were given a soft sell, relatively speaking, by Nikias. He referred to the $6-billion effort and the “spirit of charity and generosity and goodwill.”

Some guests wondered privately whether USC’s goal is too big, given the economy, but not James Parks, 61, who earned a bachelor’s and master’s at USC’s business school and created a successful accounting firm and other ventures. He has given substantially to his alma mater and says it is listed in his will for a seven-figure bequest. “I feel that I owe a certain amount back to USC for what the education at the university has done for me,” he said.

In nurturing such donor ties, USC took unusually splashy steps this year to acknowledge several large gifts. Its full-page thank-you ads in newspapers and magazines around the country startled traditional fundraisers. The plaques and other “naming opportunities,” such as adding the Dornsife name to the College of Letters, Arts and Sciences after a $200-million gift from an alumni family, has some campus wags wondering if every rock and bench will one day bear a plaque.

Al Checcio, who left Fordham University last year to become USC’s senior vice president for university advancement, said he takes no offense at such comments. “There is nothing more important in my opinion than thanking people for what they do,” he said. “I learned that from my mother.”

Checcio declined to say how much USC spent this year on advertising and other fundraising efforts but said it generally costs the university about 8 cents for each dollar it raises; experts said that figure is relatively low among U.S. universities.

The public thank-yous are a shrewd strategy, according to Tim Seiler, director of The Fund Raising School at Indiana University’s Center on Philanthropy. Although it may turn off a few potential donors, many more think otherwise, he said. “People like to be associated with winners and successful fundraising. Even a donor who gives a modest gift feels part of something big,” Seiler said.

When asked the price to put a donor’s name on one of the handful of USC schools that do not yet bear one, Nikias laughed. “Ideally, I want $50 million, but it’s all negotiable,” he said.

Also up for naming are scholarships, for at least $1 million each; faculty chairs for at least $3 million; research institutes, for $10 million to $25 million; and buildings, at varying prices. Nikias said, however, that donors have no say on academic research or faculty hiring.

“Several of the people I have interacted with needed to be educated about how the university is run. I tell them they don’t get to pick the dean,” he said.

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