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At Monday's Morrison Library event announcing the Hewlett gift, Chancellor Birgeneau led a round of applause for Walter Hewlett, the foundation board's chair, and its president, Paul Brest. (Peg Skorpinski photo)
 

Berkeley announces largest-ever gift: $113 million
Chancellor Birgeneau points to Hewlett Foundation gift, which will help create 100 endowed faculty chairs, as emblematic of 'the importance of private funding to realize our public purpose'

| 12 September 2007

UC Berkeley has received the largest private gift in its history, it was announced on Monday, Sept. 10. The $113 million gift from the William and Flora Hewlett Foundation provides endowment support that will help close the funding gap between Berkeley, the nation's preeminent public university, and its elite private peers.

The Hewlett gift - which, says Chancellor Robert Birgeneau, represents a "turning point" in the financing of public higher education - gives the campus a major new source of endowed funds to attract and support world-class faculty and graduate students. The gift is a challenge, providing $110 million to match other private donations, dollar for dollar, to create 100 new endowed faculty chairs. The additional $3 million supports managing the endowment funds for enhanced returns.

Largest gifts to UC Berkeley

. $113 million, The William and Flora Hewlett Foundation, which includes a challenge gift to raise money for 100 endowed faculty chairs, 2007

. $50 million, from an anonymous donor, to launch the Berkeley Health Sciences Initiative, 1999

. $46.5 million, William V. Power, for faculty excellence, graduate-student fellowships, and the Health Sciences Initiative, 2003

. $40 million, the Li Ka Shing Foundation, to support construction of the Center for Biomedical and Health Sciences, 2005
With the match, the Hewlett challenge ultimately will raise $220 million in funding for new chairs in all of the campus's 14 schools and colleges. The total will represent an almost 50 percent increase over Berkeley's current $468 million in endowed-chair funding.

There currently are 351 endowed chairs on campus, in a wide variety of academic fields, ranging from classics to insect biology.

The Hewlett name will not be attached to the new chairs, at the request of the foundation. Instead, each chair may be named for the donor who matches the Hewlett funding, or for someone the donor wishes to honor. For each new chair, an eminent professor will be selected as the chair holder; he or she will receive a portion of the earnings generated from the endowment to support his or her research and teaching.

"This gift is an extraordinary vote of confidence in the contribution that UC Berkeley and all great public universities make to society," says Birgeneau. "It is a recognition that public universities can and must compete with the best private universities and can only do so through a partnership between public funding and private philanthropy."

The good news brought a statement from Gov. Arnold Schwarzenegger: "This historic donation is terrific news for the University of California, Berkeley, and a great example of how private support can help our schools flourish....It is crucial that we attract and retain the best professors and faculty members to keep California's universities the most competitive in the nation."

Bridging the private/public gap

The chancellor and other campus leaders have long pointed to disparities in endowment income between Berkeley and the "elite privates" - universities such as Yale, Harvard, Princeton, and Stanford - regarded as Berkeley's academic peers and competitors for top faculty and graduate students.

Retaining these top scholars is a matter of equal concern; supported by burgeoning endowments, elite privates often make lucrative job offers to Berkeley's leading faculty. In the 2006 fiscal year, Harvard's endowment was nearly $30 billion and Stanford's topped $14 billion (while Berkeley's was $2.5 million) - and endowments at private peer institutions have been producing returns that often have exceeded 20 percent annually. The sheer size of those endowments gives those institutions a commanding fiscal advantage in such competitive arenas as the creation of research facilities, support for graduate students, and - perhaps most critically - the attraction and retention of top-flight faculty. (For more on Berkeley's competitive position, and the ways in which the Hewlett gift will strengthen it, see "Sustainability 101.")

Between 2000 and 2006, the campus retained 162 of 236 faculty with competing offers - a nearly 70 percent retention rate. However, in Birgeneau's view, this success was achieved only through extraordinary efforts and cost-cutting measures that cannot be continued over time.

"With only a third of our annual budget coming from state funds," he says, "increasing the size of Berkeley's endowment is the only way to sustain a stable financial foundation for the future."

Ongoing discussions

For more than a year, Birgeneau and the Hewlett Foundation held frequent discussions about how the foundation's support could set the stage for a new way for private philanthropy to aid the mission of the country's top public universities. The foundation is known for the high value it places on sustaining and improving institutions that make contributions to society.

The beginning of a beautiful friendship

Venture capitalist Larry Bock considers energy "the single most important problem this country needs to address." In his view, the research being conducted at Berkeley to develop nanotechnology-based solar cells is "the way to go about solving the problem." Last year, Bock underscored his commitment to cracking the energy conundrum when he and his wife created the Larry and Diane Bock Endowed Chair in Nanotechnology.

Although neither Bock is a Berkeley alumnus, their familiarity with Berkeley has grown as Larry Bock has drawn on faculty expertise for some of the four dozen companies he's founded, co-founded, or financed. Professor of Chemistry Paul Alivisatos, a nanotech pioneer who was selected to hold the Bock chair, is on the scientific advisory board of one of those companies, Nanosys, Inc., which Bock started in 2001 to communicate the promise of nanotechnology.

While donors don't get to select the faculty member who holds the chair they've endowed, Bock says about Alivisatos, "I couldn't have picked a better person if I had chosen him myself."

Since establishing the chair in nanotechnology, Bock has found at Berkeley a community of like-minded thinkers. His relationship with the campus has expanded: This past spring he gave the College of Chemistry's commencement address and joined the college's scientific advisory board. He has also served as an informal mentor to several Berkeley students, providing them with internships at his companies.

"Endowing a chair is much more than making a monetary gift," says Scott Biddy, vice chancellor for University Relations. "Donors often form lasting, meaningful relationships with the campus and our faculty, as the Bocks have done. The Hewlett gift offers the potential for a hundred people to become involved in the Cal community in such a way."

- Wendy Edelstein

At the announcement of the gift in the Morrison Library on Monday, Walter Hewlett, chairman of the foundation's board, referred to Berkeley as "the crown jewel of public higher education" in the United States and spoke with conviction about the challenges confronting the campus today:

"The great public universities, and Berkeley in particular, are in danger today of losing their position in the pantheon of great universities. The cost of running these institutions has for years been going up faster than general inflation or state revenues. Berkeley has already fallen behind its peers in what it can afford to pay its faculty.

"We cannot, and we must not, let this trend continue," he said. "This is why the Hewlett Foundation has stepped forward at this time to help finance a coordinated challenge to endow 100 faculty chairs . reaching out to the friends, alumni, and supporters of UC Berkeley for their help in this endeavor..We hope in this way to extend the beneficial effect of our own philanthropy as well as to encourage giving by others."

He noted that if Berkeley is to continue its unique role in society, it will need support from private sources. "We hope this gift will inspire the multitude of loyal Berkeley alumni and friends to hark and respond to her need at this time. This is the hour to step forward and help one of the greatest causes in our society today, and one of our greatest hopes for a better tomorrow," Hewlett said.

The chancellor said the challenge gift "is already generating interest from our friends, who have expressed excitement" in stepping forward with matching funds.

Paul Brest, president of the Hewlett Foundation and, as a former dean of Stanford Law School, an experienced raiser of funds, jokingly told faculty at Monday's event that it "will actually be fun" to raise the matching money for the new chairs, though they won't need to be fundraisers themselves to make the chairs a reality.

"But you're a necessary part of the equation," he told the many professors and deans attending. "You have an unprecedented opportunity to explain the university's mission - and your contribution to it - to alumni and others in order to gain their support. And you will find an eager and receptive audience."

A chair to wave

Neurobiology professor Geoff Owen, dean of biological sciences in the College of Letters and Science, knows first-hand what an important tool the Hewlett chairs will be in retaining and recruiting faculty. Since 2002 he has been faced with 37 retention cases - about seven a year - among his faculty of 120.

"Chairs make a huge difference in the life of individual faculty members, as they provide discretionary funds," says Owen. "Situations crop up every year where, if you could put your hands on some money, you could make a real difference in your work. If we can wave a prestigious chair in front of somebody, it does make a difference."

Anthropology professor and department chair Rosemary Joyce, who spoke at Monday's announcement event about the benefits that will flow from the Hewlett gift, says that in addition to higher salaries, the packages being offered to faculty members by Berkeley's competitors include cutting-edge research facilities, research budgets for multiple years, library development funds, summer pay, graduate-student support - and endowed chairs.

"Private universities have much higher proportions of named chairs, and people with chairs are recognized as the leaders of their disciplines," says Joyce, who spent most of her first semester as department chair retaining three professors. "A big part of what the Hewlett chairs will do is to say that the university recognizes leadership. We have a larger proportion of leadership at this academy than at other places, but we recognize a smaller proportion." (Other faculty spoke with the Berkeleyan about the benefits of endowed chairs; see "What a difference a chair makes!" below.)

Endowment income from the Hewlett chairs will also provide funding to schools and colleges for recruiting top graduate students, who are being offered substantial fellowship packages by private schools. According to a Graduate Division survey, when the stipend offered by Berkeley to a prospective graduate student is greater than or equal to a non-UC competitor's offer, 75 percent of the students choose Berkeley. But when it is less, Berkeley is chosen by only 15 percent of the students.

"What Berkeley has going for it are two things that can't be downplayed in retention issues," says Joyce, herself the subject of a competitive offer from another university in the past. "One is the quality of our graduate students and the diversity of our undergraduates. The other is Berkeley itself - the intellectual life and the faculty depth and the notion of being part of the leading department in your discipline."

"The intellectual environment here is so rich," adds Owen, "that nobody wants to leave it. People here are that good. And when you are surrounded by people who are that good, the exchange of ideas and the excitement of learning is tremendous."