MONEY TALKS PAY OFF FOR USC

Univer­sity’s quest to raise $6 bil­lion by the end of 2018 is pow­ered by a mas­sive fundrais­ing ma­chine

Los Angeles Times - - FRONT PAGE - By Larry Gor­don

AUSTIN, Texas— USC Pres­i­dent C. L. Max Nikias was 1,400 miles from the Los An­ge­les cam­pus, but he knew just howto ap­peal to his au­di­ence.

In a swanky ho­tel ball­room, he told the crowd of alumni and donors that Texas had be­come the largest feeder of stu­dents to USC af­ter Cal­i­for­nia, and that stu­dents from their state scored sig­nif­i­cantly higher on the SAT than the av­er­age of all ap­pli­cants. Then he in­tro­duced Texas’ first lady, Ce­cilia Ab­bott, whose daugh­ter will at­tend USC in the fall. That, he joked, could cause con­flicts for the gover­nor’s fam­ily dur­ing football games.

The three-day, three-city Tro­jan sprint through Texas was un­der­way, one that could help USC raise the $1.8 bil­lion it needs to reach its am­bi­tious $6-bil­lion cam­paign goal for schol­ar­ships, fac­ulty hir­ing and build­ing by the end of 2018.

“We love Texas,” Nikias told the crowd. It was part of a stump speech he de­liv­ered in Hous­ton and Dal­las. And be­yond the Texan pa­tri­o­tism, it echoed many other talks he’s given around the coun­try, and the world, about how the pri­vate univer­sity has be­come a re­spected re­search in­sti­tu­tion.

Un­der Nikias and his pre­de­ces­sor Steven Sam­ple, USC has shed its de­ri­sive stereo­type as the Univer­sity of Spoiled Chil­dren and risen sig­nif­i­cantly in ad­mis­sions selec­tiv­ity and aca­demic rank­ings. It has lured top fac­ulty from such places as UCLA and Yale Univer­sity, and at­tracts stu­dents from around the globe.

In two decades, it has climbed from 51st to 25th in U.S. News& World Re­port’s rank­ings of na­tional univer­si­ties.

Be­hind that suc­cess is an elab­o­rate and pow­er­ful fundrais­ing ma­chine that ex­tends from down­town Los An­ge­les to China, In­dia and be­yond.

An eye-pop­ping 450 peo­ple work on the univer­sity’s fundrais­ing team, dou­ble

the staff from four years ago when the cur­rent cam­paign be­gan.

They meet with phi­lan­thropists and the lead­ers of foun­da­tions and cor­po­ra­tions that sup­port higher ed­u­ca­tion; some work like de­tec­tives, re­search­ing po­ten­tial donors’ port­fo­lios and abil­ity to give, track­ing prop­erty hold­ings, cor­po­rate dis­clo­sures of large stock pur­chases and ca­reer ad­vance­ments. Oth­ers help ar­range the wide-rang­ing travel of Nikias and the deans of USC’s in­di­vid­ual schools — to places like Hong Kong, Mum­bai, Sao Paulo, Washington and New York — to meet alumni and par­ents.

The ef­forts have paid off in a big­way.

At $732 mil­lion, USC ranked third among U.S. col­leges, be­hind Har­vard and Stan­ford, in the ac­tual cash do­na­tions it col­lected last year, ac­cord­ing to the Coun­cil for Aid to Ed­u­ca­tion. In the late 1990s, USC ranked as low as 16th. In­creas­ingly, the univer­sity’s schools, de­part­ments, fac­ulty chairs and build­ings bear the names of donors— part of a care­fully priced strat­egy that of­fi­cials say en­cour­ages even more gifts.

Some skep­tics, on and off cam­pus, say that USC and many other large Amer­i­can univer­si­ties have taken on a cor­po­rate fla­vor that em­pha­sizes fundrais­ing in un­seemly ways. But oth­ers say there is no al­ter­na­tive to a mas­sive money cam­paign if au­ni­ver­sity like USC is go­ing to thrive. In fact, ex­perts say, USC’s $4.5-bil­lion en­dow­ment is con­sid­ered small for its am­bi­tions, dwarfed by Har­vard’s $35 bil­lion and Stan­ford’s $21 bil­lion; com­peti­tors such as North­west­ern Univer­sity and the Univer­sity of Notre Dame come in at $9.7 bil­lion and $8 bil­lion, re­spec­tively.

“A gen­er­a­tion ago, USC was a very good re­gional univer­sity. To­day it’s a world­class in­sti­tu­tion and, among other things, it took money to­get there,” said Terry Hartle, se­nior vice pres­i­dent at the Amer­i­can Coun­cil on Ed­u­ca­tion. Most aca­demics around the coun­try, he said, be­lieve that USC “has come a longway in a very short pe­riod” and that only NYU has made a sim­i­lar as­cent in the same time.

In try­ing to raise money, even in this era of so­cial media, it seems that noth­ing trumps old-fash­ioned face time with the univer­sity leader. So Nikias, his wife and an en­tourage of about a dozen flew to Hous­ton in late April and then drove nearly 400 miles — from ho­tels to restau­rants to pri­vate homes— to wave the Tro­jan flag in Longhorn coun­try.

Al­bert Chec­cio, USC se­nior vice pres­i­dent for ad­vance­ment, likened it to a tour by coun­try rock mu­si­cians, com­plete with sound checks and show times. But in­stead of road­ies, the show was staffed by con­ser­va­tively dressed alumni of­fice em­ploy­ees. And rather than a band, the star at­trac­tion was a for­mer en­gi­neer­ing pro­fes­sor with a Greek Cypriot ac­cent.

Tours like this “keep peo­ple con­nected, and peo­ple who are con­nected are the peo­ple who are sup­port­ive,” Chec­cio said.

Go­ing into the Texas events, USC lead­ers re­viewed brief­ing books with de­tails on how much some au­di­ence mem­bers have do­nated to the cam­pus in the past, as well as their pro­fes­sional ac­com­plish­ments. Nikias said that helps to spark con­ver­sa­tion on the re­cep­tion line and at smaller din­ners. Although some show­man­ship is re­quired, Nikias said, it is­more im­por­tant to know your au­di­ence and to be au­then­tic.

“You can­not fake it,” he said.

In Hous­ton, stand­ing be­hind a bou­quet of Tro­jan car­di­nal and gold roses, Nikias de­liv­ered a half-hour speech tout­ing the cam­pus — it ad­mit­ted just 18% of ap­pli­cants, and fresh­man SAT scores for the in­com­ing class are in the top10% na­tion­ally. The crowd cheered when he re­counted how USC re­cruited top neu­ro­sci­en­tists from ri­val UCLA, and au­di­ence mem­bers seemed im­pressed by a video show­ing plans for the $650-mil­lion Univer­sity Vil­lage of dorms, class­rooms and shops north of the main cam­pus.

Of course, Nikias also spoke of money.

Here called hav­ing to sur­mount skep­ti­cism when the $6-bil­lion goal was an­nounced. At the time, it was the largest cam­paign in Amer­i­can higher ed­u­ca­tion; it has since been topped by Har­vard’s. Nikias said that 240,000 of the 270,000 do­na­tions so far have been for $1,000 or less; 27, in­clud­ing one re­ceived af­ter his Texas trip, were at least $25 mil­lion, and four of those were $100 mil­lion or more.

Nikias and his wife, Niki, hosted a pri­vate din­ner at an Austin res­tau­rant for 18 guests. With so many do­na­tions in hand, find­ing enough oth­ers in the next 3 1/2 years means “it’s not the time to re­lax … and I don’t want to celebrate in any way... We’ve got to be con­stantly ex­pand­ing or re­new­ing the donor pool,” Nikias said in an in­ter­view.

Since he be­came presi---

dent five years ago, Nikias has trav­eled ex­ten­sively across the U.S. and over­seas, hop­ing to make new friends for USC and re­con­nect­ing with old ones. Those trips are aided by the univer­sity’s re­cruit­ing and alumni of­fices in Hong Kong, Shang­hai, Taipei, Seoul, Mum­bai, Mexico City, San Fran­cisco, Washington and New York. The univer­sity may open another of­fice in Texas. (USC de­clined to di­vulge how many do­na­tions have come from over­seas or to pro­vide a state-by-state break­down.)

The univer­sity has a boardof trustees with 53 vot­ing mem­bers, in­clud­ing many of the city’s most suc­cess­ful de­vel­op­ers, bankers and foun­da­tion heads. The list in­cludes Dream Works’ Steven Spiel­berg, Tu­tor Perini Corp.’s Ron­ald Tu­tor and An­nen­berg Foun­da­tion CEO Wal­lis An­nen­berg.

And its cor­po­rate-like ap­proach to fundrais­ing— plus its use of money to at­tract star tenured re­searchers — has brought crit­i­cism. Some part-time fac­ulty, who teach many of the school’s un­der­grad­u­ate classes with­out the guar­an­tee of long-term em­ploy­ment, say USC cares more about donors than about them. As a re­sult, a cam­paign to union­ize those pro­fes­sors is un­der­way; it is re­sisted by the ad­min­is­tra­tion.

In the Austin ho­tel ball­room, the crowd of 150 skewed on the younger side, re­flect­ing the area’s high­tech and en­ter­tain­ment econ­omy. Af­ter shar­ing some of his thoughts about the school’s higher aca­demic stan­dards, Nikias told them: “I’m adding value to your de­gree, and that’s why you have to give back to the univer­sity.”

Brian Led­erer, 29, an alum­nus who now is study­ing for a master’s in busi­ness ad­min­is­tra­tion at the Univer­sity of Texas, was pleas­antly sur­prised that he was not pressed to write a check that night. He had given small amounts to USC in the past, and Nikias’ talk im­pressed him enough to ce­ment plans to give more af­ter he pays down his stu­dent loans. The speech, he said, made peo­ple “re­al­ize where your money is go­ing when you do give back. And it showed the im­por­tance.”

Sylvester Martin Shel­ton, 86, are tired doc­u­men­tary film maker who earned a master’s at USC’s cin­ema school in the 1950s, said the re­cep­tion was “first-class.” But “in terms of open­ing my pock­et­book,” he thought that Nikias pushed too hard and too long.

“It didn’t en­gen­der em­pa­thy,” he­said. Still, Shel­ton said hewould con­tinue mak­ing an­nual gifts to the School of Cin­e­matic Arts, which would count to­ward the cam­paign. Some other alumni were up­set that the event con­cen­trated so heav­ily on the sciences and busi­ness pro­grams.

Na­tional ex­perts said such trips have be­come com­mon for many univer­sity of­fi­cials and that big schools regularly em­ploy sim­i­larly large staffs to con­duct deep donor re­search.

Though USC is feel­ing the pres­sure to meet its cam­paign goal and would likely need large gifts to do so, it and other schools also want small do­na­tions from young alumni who may turn into mega-donors decades later, said Amir Pa­sic, dean of In­di­ana Univer­sity’s Lilly Fam­ily School of Phi­lan­thropy and a for­mer fundraiser at Johns Hop­kins.

Chec­cio said that USC spends about 11 cents to raise each gift dol­lar, a per­cent­age sev­eral na­tional ex­perts said was con­sid­ered rel­a­tively low.

But he de­clined to say how much USC spends an­nu­ally on fundrais­ing, or how much the Texas trip cost. While Nikias flew first class, Chec­cio and other staffers flew in coach; much work was done by vol­un­teers. “Ev­ery­one’s con­cerned about the costs,” Chec­cio said.

In north Dal­las, USC of­fi­cials hosted a se­lect, af­flu­ent group.

Tom Hicks, a lever­age buy­out busi­ness­man who owned the Texas Rangers and part of the Liver­pool soc­cer club in Bri­tain, of­fered his 25-acre, French chateau-style es­tate for a cock­tail party. He and his wife, Cinda, have busi­ness de­grees from USC.

Af­ter a se­cu­rity check to en­ter the gated prop­erty, the 80 or so guests were greeted by the Niki­ases in a for­mal lobby. The deans of USC’s en­gi­neer­ing and busi­ness schools, who had pri­vate meet­ings with Texas donors that week, spoke one-on-one to guests.

Nikias de­liv­ered re­marks in­for­mally from the top of the small stair­case lead­ing to the sunken liv­ing room. He made many of the same points he had dur­ing other stops on the trip, but did not di­rectly men­tion fundrais­ing. Only when a guest asked about the cam­paign’s progress, caus­ing the au­di­ence to laugh, did he dis­cuss the $6bil­lion goal.

In an in­ter­view, Nikias was asked whether some peo­ple might re­sent USC for tak­ing dol­lars that could go to such other causes as fight­ing home­less­ness or sup­port­ing the arts.

He noted that donors are free to make per­sonal de­ci­sions— and that there­was a lot of wealth in the U.S.

“No­body would ar­gue against all the needs that ex­ist around theworld, or even in the L.A. Basin. But at the end of the day, I am the pres­i­dent of this univer­sity and I pledged to look af­ter the very best in­ter­est of this univer­sity. So for me, I live and breathe USC.”

Whether the Texas au­di­ences were ready to make large pledges re­mains to be seen. USC of­fi­cials said they did not ex­pect to snare any spe­cific gifts, although clearly some donors were be­ing iden­ti­fied for fol­low-ups in the months ahead.

“This per­sonal touch and good will al­ways pay div­i­dends,” Nikias said dur­ing a stop for cof­fee. “One thing you learn in fundrais­ing is that you have to be pa­tient. You can never rush it. No doubt, there will be gifts from Texas.”

‘No­body would ar­gue against all the needs that ex­ist around the world, or even in the L.A. Basin. But ... I pledged to look af­ter the very best in­ter­est of this univer­sity.’

— C. L. MAX NIKIAS,

USC pres­i­dent

Thomas Mered­ith For The Times

USC PRES­I­DENT C. L. Max Nikias, left, greets 1951USC alum­nus Robert Ban­croft and his wife, Karen, at a fundrais­ing event in Austin, part of Nikias’ tour through Texas to woo po­ten­tial donors.

Pho­to­graphs by Thomas Mered­ith For The Times

“WE LOVE Texas,” USC Pres­i­dent C. L. Max Nikias told a crowd of USC alumni in Austin in April. He also spoke in Hous­ton and Dal­las.

FU­TURE USC stu­dents An­nalise Pasztor and Aarya Surya­van­shi, sit­ting with their fam­i­lies, laugh dur­ing Nikias’ key­note speech. USC is cam­paign­ing to raise $6 bil­lion for schol­ar­ships, fac­ulty hir­ing and build­ing.

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