Search

The Value of Endowment


I worked at the UPMC medical center and with the University of Pittsburgh for most of my career. By the 1990’s health centers across the nation had an insatiable need for capital. They were taking on more debt. Hospitals had to respond by ramping up philanthropy.


Under the leadership of the Dean of the University of Pittsburgh School of Medicine, Arthur Levine, M.D., support from the National Institutes of Health grew remarkably. The development team needed to do more, especially with restricted and unrestricted major gifts, to support the research program. In addition, the University needed to establish endowed funds and chairs to continue to compete nationally.



Current-Use Funds

Restricted and unrestricted gifts can be used for priorities established by leadership and are always very valuable—they help the institution achieve key objectives, buy equipment that might be needed or provide client assistance. Every physician was grateful to receive such a gift. Every day the impact from gifts of every level was significant. Even more so when they were combined for a particular purpose.


Endowment

For those donors who want to provide a gift of magnitude to honor or memorialize someone or simply place their own name on a fund as a legacy of their support, I enjoy talking about endowment.


An endowment can bring great benefit. It can:

  • Provide stable funding.

  • Augment growth and productivity.

  • Launch a new area of work or sustain and promote an established area.

  • Bring prestige to the organization.

  • Provide momentum to attract other federal grants and private contributions.

The principle of the endowment is invested and can generally have a return of 4-6%. A portion of this is used to fund a program while a smaller portion is generally reinvested in the corpus of the endowment, ensuring that it continues to increase and remain competitive in the future.


Endowed Chairs

One of my favorite ways to structure endowment is for an endowed chair. These are coveted across universities, all types of educational institutions, arts and cultural groups. Over the course of my career my teams and I were able to secure almost 40 endowed chairs for the University of Pittsburgh in areas as diverse as pediatric research (pediatrics, immunology, pathology), cancer (melanoma, environmental oncology, precision medicine, women’s cancers), Alzheimer’s disease, cardiology, and many others.


What Does An Endowed Chair Do?

Scientific research is very competitive. Packages comparable to what major athletes are offered can be used to attract a key scientist working in a field on the edges of science. Chairs have become an integral part of a recruitment package and are regularly included, just as start-up funds, space, and support for the scientific team accompanying the individual.


An endowed chair:

  • Provides stable funding that can be used strategically to establish momentum.

  • Can attract other funds from the National Institutes of Health as well as other governmental funding sources.

  • Is a highly visible signal to the community of the institution’s priorities.

  • Can also be used as a centerpiece for a campaign to attract private funding.

Income from the endowment will help to ensure funds for the scientific leader to use year by year to remain as vigorous as possible. Income can be used to support the leader’s salary or that of his/her clinical or research team and can help reach new levels of achievement.


Something that is important to note: The purpose of the chair will remain intact into perpetuity. This argues for broad language when establishing the chair, and it also ensures that the donors’ explicit wishes are fulfilled. Additional funding can always to added to the corpus yet nothing can ever be subtracted.


Chairs are currently established at most national universities for between $2-3 million, with Dean’s Chairs or Division Chairs sometimes as much as $5 million. They help to forge new scientific frontiers and generally are so critical to departments that the name becomes woven into the very fabric of the institution. Such chairs will have an impact in perpetuity.


Economic Impact

Finally, chairs provide an impact on the economic vitality of the community. With the ability to recruit someone (who can bring a team of new people to the community who buy houses, go to restaurants, pay taxes) or retain someone in the community, chairs become valuable to the very health of the region.


Examples of Chairs

Chairs can be completed in several ways.


One of the first chairs on which I worked was one that was given by the Vira Heinz Foundation many years ago. This was an outright gift from the foundation that established the Vira Heinz Endowed Chair in Pediatrics…it was a wonderful tribute to a woman who not only made an impact at Children’s Hospital of Pittsburgh, but also at many organizations throughout the city.


Another chair established at Children’s was the Carol Ann Kraumer Endowed Chair in Pediatric Pathology—this was given by Carol Ann’s parents through a major planned gift in their will, realized upon their death. Carol Ann was a victim of polio and was a patient at Children’s while Dr. Jonas Salk was just a few floors up working on the polio vaccine itself.


The Pittsburgh Foundation gave a gift to the UPMC Hillman Cancer Center to help stimulate additional fundraising while bringing economic benefit to the community. Their contribution was $1 million from funds dedicated to cancer research. This gift was structured as a challenge grant. Then 20 members of the community each made gifts of $50,000 to match that amount, and The Pittsburgh Foundation Endowed Chair in Cancer Research was established. It is crystal clear that this gift sparked others to decide to make such a gift. Over the years multiple chairs devoted to cancer were created.


A chair that is a beacon of hope for patients diagnosed with amyloidosis was also made with a combination of contributions. It is named for a beloved former mayor: The Richard S. Caliguiri Endowed Chair in Amyloidosis and Heart Failure. Mayor Caliguiri fulfilled his role from 1977 through his death in 1988 of amyloidosis. He had an enduring love for the city and always felt ‘There is a good, positive future for Pittsburgh.’ This chair was given with a major gift from The Pittsburgh Foundation, from proceeds from the Great Race, and through efforts on the part of staff together with the Caliguiri Family on special events. The chair has helped to inspire the interest of the faculty and research team in amyloidosis and heart failure and has become a visible signal of Pittsburgh’s leadership on a national and international basis in this field. It is also clear that patients feel they are in partnership with a respected individual, Mayor Caliguiri.


In Summary

Endowed and immediate use funds assist in enabling research to grow and thrive, bringing new knowledge and better treatments for diseases affecting people in our own region and around the world. The creation of endowments makes an economic impact on the community and builds strength and leadership into the tapestry of important research at any institution. Philanthropic gifts represent sustainable advantages.

© 2019 Gayle Tissue Strategies

1643 Biltmore Lane, Pittsburgh, PA 15217

412.721.4719

LinkedIn Icon-15.jpg

Gayle Tissue Strategies