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Hal Ritch wanted to surprise his parents with the perfect gift for their 50th wedding anniversary. As he mulled over potential presents, one idea rose to the top of the list: Why not endow a Stanford professorship in their honor?
"Both of my parents come from families of teachers," the 1973 Stanford alumnus said. "My mother was a teacher herself and three of my four sisters are teachers. Education has always been something my parents have respected and admired, so I thought that this would mean a lot to them, as, indeed, it has."
The Herald L. and Caroline L. Ritch Professorship in Humanities and Sciences is one of 12 endowed professorships that have been established so far during this academic year, the biggest collection of new chairs since the middle of the centennial campaign, according to John Ford, vice president for development. On average, only three or four professorships are established per year, "so it is very encouraging to see this happening," Ford said.
Push to increase percentage of faculty salaries covered by endowment
Stanford has 287 endowed professorships that provide about 21 percent of annual funds for faculty salaries a relatively low percentage compared to Stanford's peer institutions in the East. At Harvard, for example, endowed professorships provide 39 percent of the yearly costs for faculty salaries.
Ford is confident, however, that the recent surge signifies an upward trend. "I am very optimistic," he said, crediting the robust economy, in part, for the increase.
It costs $2 million to endow a professorship at Stanford. Income from the endowment gift essentially covers the costs of a faculty position in perpetuity. In many cases, it also goes toward defraying expenses related to the faculty member's work, such as library, secretarial, travel and other expenses.
"Many more alumni have enjoyed financial success in recent years and are in the position to consider making gifts at this level," Ford said.
Last week, David Filo and Chih-Yuan "Jerry" Yang, inventors of Yahoo!, the first online directory for the World Wide Web, became the youngest individuals to have endowed a professorship at Stanford in the 22 years that the university has kept records in this area. They are age 30 and 28, respectively.
"It's a wonderful story," Ford said. "These guys are barely out of Stanford and they're already recognizing, through their philanthropy, that Stanford played a key role in their success."
The university probably will step up its efforts later this year to attract new chairs as part of a larger drive to increase the size of its endowment, Ford said.
"There isn't a dean that I have talked to who isn't interested in raising more endowed professorships, so I think that that's a pretty clear message to me that we will be pushing for more," he said.
Last fall, President Gerhard Casper, in his state of the university address, stressed the importance of building the university's $3.8 billion endowment in order to decrease the university's dependence on federal funding.
Stanford currently derives 40 percent of its annual operating revenue from government grants and contracts, more than twice the percentage of its chief competitors, according to an annual financial report released by the university last week. Endowment income, the report states, ranks only fourth among Stanford's main sources of funds, behind federal grants and contracts; tuition and fees; and private gifts, grants and contracts.
Boosting the number of endowed professorships will go a long way to helping the university become more self-reliant, Ford said, because it frees up funds in the university's coffers to support other university initiatives.
How endowed professorships get distributed
Generally, there are two kinds of endowed professorships: incremental professorships, which create new faculty positions; and non-incremental professorships, which support the salaries of existing faculty. More than 90 percent of Stanford's endowed professorships are awarded to faculty who already teach here, Ford said.
According to Becky Smith, director of stewardship, endowed professorships generally have no strings attached, although faculty members are encouraged to write to the donor or honoree explaining what they did during the year and the way in which the income from the endowed professorship helped support their work.
In most cases, the funds are directed to the deans of the schools, who then distribute the endowed professorship to a particular department. If the donor hasn't specified a school preference for the professorship, however, the post is directed to the president or provost, who determines which school or department will receive the gift. All endowed professorships must be approved by the Board of Trustees.
Some are established as renewable appointments with set terms designed to give deans the flexibility to apply the available funds in areas of greatest urgency.
"We try to have these gift funds be less restricted so that the deans have more leeway to use them wherever they are necessary, depending on the priorities of a school at any given time," Smith said.
During the solicitation process, however, fundraisers and deans often work with donors to determine where Stanford's needs for an endowed professorship intersect with the donor's interests. As a result, Smith said, many donors request that the holder of the endowed chair be associated with a particular field of inquiry and the university is able to accommodate their request.
Since endowed professorships are held in perpetuity, however, it is critical that the terms of these posts are kept as flexible as possible, Smith added. If an academic field of inquiry falls out of vogue, for example, the university can consult donors about changing the terms of the professorship. If the donor has died, the university can litigate the matter and redeploy the faculty position to another academic discipline.
Different motivations for endowing professorships
People fund endowed professorships for a variety of reasons. Some, like Ritch, want to honor a friend or relative with a permanent gift. Others, such as Filo and Yang, are interested in advancing a particular field of study.
"Stanford was an integral part of the creation of Yahoo!," Yang said. "Through the endowment of a professorship, David and I feel that we can give back to the university by providing a long-term resource to advance levels of teaching and research. We believe that by allowing the endowment to focus on technology and having some emphasis on entrepreneurship, we can hopefully seed the next generation of great ideas and new businesses to develop."
Thomas W. Ford, a former Stanford trustee, has helped endow four professorships at the university two that were established in the past five months.
"It's a wonderful way to honor people, while, at the same time, contributing to Stanford in perpetuity," Ford said of the gifts.
In October, he provided the lead gift for the establishment of the Judge John W. Ford Professorship in Dispute Resolution in the Law School. The endowed professorship is named in honor of Ford's late father, who encouraged people to settle out of court rather than go through litigation.
And last week, Ford endowed a professorship in the School of Engineering that honors Kleiner Perkins, Mayfield and Sequoia Capital, three venture capital firms in the area.
"Since I invested in them and was a beneficiary of their success, I decided it was appropriate to honor them with a professorship," Ford said.
Willard R. and Inez Kerr Bell's decision to endow a professorship in engineering in 1987 was motivated by three reasons: concern over the diminishing competitiveness of the U.S. semiconductor technology, family loyalty to Stanford dating back to the university's founding, and a "sense of patriotic duty in a time of decreased government support of higher education and basic research."
When the Bells made their gift, however, they hadn't predicted it would have a fringe benefit: Over the course of the past decade, the couple has developed a close friendship with John Hennessy, who was named the Willard R. and Inez Kerr Bell Professor in the School of Engineering and is now dean of the school.
"We trade letters and when we are in the area, we drop by and visit John. We've even had dinner at his home," Willard Bell said. "My wife and I think we are very fortunate to have our name associated with such an outstanding young man."
In some instances, the donor already has strong ties with the faculty member who is named to the endowed professorship that he or she has established.
Burton J. McMurtry was pleasantly surprised when he was informed that his Ph.D. adviser, Anthony E. Siegman, was chosen as the first holder of the Burton J. and Ann M. McMurtry Professorship in the School of Engineering.
"We were enormously pleased when Tony was chosen," said McMurtry, who received his doctorate from Stanford in 1962 and endowed the professorship, together with his wife, in 1986.
"He was a great mentor as my professor at Stanford and he has continued to be a great mentor and friend ever since."
'Best of both worlds'
From the university's perspective, an endowed professorship has benefits that extend beyond the budgetary realm.
"This is the only way that universities can honor their most eminent faculty," said Provost Condoleezza Rice. "The chair holder is thus identified as someone of great achievement in his or her field."
When the donor has particular reasons to honor a field of study, Rice added, an endowed professorship can be "the best of both worlds, acknowledging the faculty member's contribution to a field that the donor wishes to further."
By Marisa Cigarroa