President Don Michael Randel on why the second
half of the University’s $2 billion capital campaign is as
important as the first.
The mid-May inauguration of the University’s
Paris Center included, among many celebratory events, a press conference
attended by a range of French media. As you might expect, one of
the questions the reporters posed had to do with money. How, they
asked, had the University financed this very nice facility near
the French national library and in the heart of an exciting new
academic neighborhood in Paris—what some predict will be the
Latin Quarter of the 21st century. The answer was simple: private
The Chicago Initiative is not about
the frosting on the academic cake.
The answer is also without precedent in France
or any country but the United States, where private philanthropy
has created the greatest universities the world has ever known.
And private philanthropy is what will sustain them at a moment when
the world needs them more than ever.
In that statement lie the hopes of the Chicago
Initiative. The Initiative, with its goal of $2 billion, is an unprecedented
effort to secure resources for the University. Thanks to the generosity
of a great many people, we have now passed the $1 billion mark (see
But another billion? Isn’t $2 billion an awful lot
of money? And does a university with an endowment of approximately
$3.5 billion really need that much more? Well, yes. And yes.
Why? The answers are many and bear repeating.
The University’s business is ferociously competitive and relentlessly
entrepreneurial. We compete daily for what is our principal asset—a
rather small (by worldwide standards) group of extremely talented
people. And we compete daily for these people against a handful
of institutions distinctly wealthier than we are.
We have prevailed in part because of the institution’s
extraordinary commitment to—and focus on—what matters
most, ensuring that the maximum share of our resources goes to support
our core objectives. We have done without what some of our competitors
have come to think of as the perks of daily life. But there are
limits beyond which such focus will not enable us to remain at the
top of the heap, which is to say a university able to attract and
retain the best faculty, staff, and students and thus able to remain
the most intellectually entrepreneurial of universities. Our people
create and sustain the culture in which the best ideas are challenged
by still better ideas, pursuing the life of the mind to places it
has never been before. That is entrepreneurship worthy of the name.
A few numbers help to define the entrepreneurial
challenges. The clearest single measure of university wealth is
endowment per student. Our richest competitor has an endowment per
student that is approximately $1 million more than ours. At typical
rates of endowment payout, this amounts to about $50,000 per student,
per annum, more than we have, which is a good deal more than we
charge our students each year. This is money that would be available
for faculty and staff salaries, student financial aid, library acquisitions,
facilities, and much else.
Another way to think about the relevant numbers
is to recognize that the principal streams of our costs, namely
people costs of all kinds, are rising faster than the principal
streams of our revenue. Tuition remains a more important revenue
stream for us than for better-endowed institutions, and tuition
growth is likely to remain at rates around 5 percent or less. But
salary and benefits (especially health care) cannot readily be constrained
to such rates as long as there is real growth in salaries in the
economy in general. Nor will the cost of financial aid be easily
constrained if we continue to believe that we have some responsibility
to young people from the bottom half of the nation’s income
distribution—we must remember that half of the nation’s
families of four live on slightly more than $50,000 per year.
Despite rising competitive costs, we have maintained
the discipline of balanced budgets. How have we fought off the gap
between revenue and expense? Again, the answer is simple—private
Make no mistake: the Chicago Initiative is not
about the frosting on the academic cake. Because of our competitive
position, the Initiative calls upon us to exercise greater self-discipline
than ever. As we pursue the second half of this essential undertaking,
we must more than ever remember the values at the institution’s
core and ensure that resources are aligned accordingly. If we succeed
in raising $2 billion but fail to add significantly to resources
for faculty support, undergraduate and graduate financial aid, the
facilities necessary to create the knowledge that will shape the
21st century, and the programs that benefit real people in our own
community and elsewhere, our success will be hollow.
I am as confident as I can be that we will succeed—but
not because it will be easy. Rather, I believe that there are those
who understand the unique value of this university at this particular
moment and who will commit their resources to sustaining it. And
I am confident that Chicago’s disciplined commitment to what
matters most will ensure that we make the best possible use of those
resources and thus justify the faith of those who join the Initiative.