Endowment Soars — Along With Minds — at Renowned Institute

THE PHILANTHROPY 400

No. 374

The Institute for Advanced Study, in Princeton, N.J., knows its august history is its selling point. Few other institutions have employed so many luminary minds, including the

poet T.S. Eliot; J. Robert Oppenheimer, director of the Manhattan Project; and the quantum physicist Niels Bohr — 22 Nobel Prize winners in all, including an economist who won the award this year. And of course everyone wants to know about Albert Einstein, who after being forced out of Germany in 1932 spent a happy quarter century pondering the cosmos while strolling the institute’s forested, 800-acre grounds.

But the past crept up unpleasantly on the institute in recent years. It had not run a capital campaign since the 1970s, and its endowment was sagging. That might not have been a problem, except that other financial support was scarce.

The books and scholarly articles produced at the institute “don’t arise from people pursuing predetermined programs” or “programmatic research,” says Peter Goddard, director of the institute.

“Programmatic” research is pretty much the opposite of the institute’s open-ended, exploratory ethos, and it wasn’t getting far telling results-obsessed foundations that it let people sit around and think all day. So when Mr. Goddard took over the organization in 2004, leaving a similar organization he had been running at the University of Cambridge, he says, with British understatement, “the trustees realized we needed to do a bit more.”

Mr. Goddard, a renowned physicist, did so well so quickly that the Institute for Advanced Study vaulted onto the Philanthropy 400 for the first time, at Number 374, raising more than $46-million in 2006 as part of its new, $100-million capital campaign. That fund-raising success, plus some shrewd investments, has helped the institute’s endowment swell by 44 percent in three years, to $683-million.

No Sales Pitches

Mr. Goddard and Michael Gehret, the institute’s chief fund raiser and associate director for development and public affairs, say they have succeeded in part because they don’t waste time trying to sell people on the organization’s approach. The institute’s scholars let their inclinations wander, sometimes fruitfully, sometimes not, among fundamental problems of math, science, and history. Esoteric thinking drives the institute, but doesn’t always appeal to donors. Indeed, “if they don’t understand the point already, people won’t get it,” says Mr. Goddard.

Mr. Gehret says the people most likely to give are “people who’ve gotten Ph.D.’s and who either start in an academic field and later go into business or who go directly into business and make a great deal of money.”

An example is Charles Simonyi, who earned a Ph.D. in computer science from Stanford University in 1977 and proceeded to make $1-billion, Forbes magazine reports, developing Word and Excel programs for Microsoft.

Mr. Simonyi heard about the institute through a friend on the Board of Trustees in the mid-1990s, and, finding the institute’s work irresistible, Mr. Simonyi soon joined the board himself. He now chairs the academic affairs committee and will become chairman of the board in 2008.

It is easy to see why the Institute for Advanced Study appeals to Mr. Simonyi. The intellectual framework for computers was laid out there by the mathematician and legendary polymath John von Neumann, who, like Mr. Simonyi, also immigrated to the United States from Hungary as a teenager. In addition, Mr. Simonyi has given $75-million from his personal foundation “to spread excellence,” and he believes the institute, “a university of universities,” exemplifies that aspiration.

Mr. Simonyi started his giving in 1996 by endowing a professorship in theoretical physics for around $6-million and then donated $5-million more in 2000, enough for the institute to name its mathematics building after him. He then decided to give $25-million to the institute’s capital campaign to raise $100-million over four years. The contribution, made through his private foundation, was used to inspire others to give.

As with most gifts, the institute added that one to its endowment, which Mr. Goddard calls its most important asset. Although the institute draws an enviable array of scholars in all fields — a post there is among the most prestigious in academe — it grants no degrees and therefore has no alumni to solicit. As a result, the institute leans much more heavily on its endowment than do its peers in higher education.

Mr. Goddard and Mr. Gehret impress upon donors that the endowment will preserve the independence that attracts great minds to the institute. Describing his approach, Mr. Gehret says, “You always want to have something to raise money for. And it’s a good story to tell. It’s very easy to believe in the institute’s mission.”

A flush endowment also helps the institute stay intellectually relevant by pushing into new fields. Another big gift the institute received in its 2006 fiscal year was a pledge for $10-million to help establish a nascent Center for Systems Biology, a field that combines mathematics, physics, and biology and is an example of the nontraditional work done at the institute. The pledge was contingent on the institute raising $10-million from other private sources.

The donor that made that commitment was the Simons Foundation, which was founded by James H. and Marilyn Simons. Mr. Simons, another institute trustee, earned a Ph.D. in mathematics from the University of California at Berkeley and served as a visiting member of the institute in 1972-3. He later made $4-billion, according to Forbes, at the Renaissance Technologies Corporation using mathematical models to pick apart Wall Street.

Large gifts, however, do not account for all of the institute’s $46-million.

The organization has also made an effort to attract small gifts, in part by reinvigorating its Friends of the Institute club.

Members of the club were mostly local residents who had always supported the institute in a general way, attending faculty lectures and other events. But the institute began pursuing them for more financial help, creating a Founder’s Circle — $25,000 in annual support — and establishing other tiers to acknowledge people who made smaller gifts.

Indeed, though it takes on universal problems and has a cosmopolitan feel — 60 percent of the institute’s visiting scholars live outside the United States — local connections have always been important to the institute.

A New Jersey businessman, Louis Bamberger, and his sister, Caroline Bamberger Fuld, founded the institute in 1930 with $5-million. They later increased giving to $16-million, the equivalent of $200-million today. And though the institute has no formal relationship with nearby Princeton University, the two institutions enjoy close intellectual relations.

In fact, that close relationship inspired a similar institute in Cambridge, England, which led Mr. Goddard directly, and through him Mr. Gehret, to their current posts.

Studying Physics

As a full-time physicist, Mr. Goddard had twice visited the Princeton institute for a yearlong stint, in 1974 and 1988. He worked primarily in string theory, an abstract and ambitious branch of physics that tries to produce a “unified theory” of matter and energy. Not coincidentally, Einstein pursued this exact goal in his 22 years at the institute.

In 1992, in Cambridge, Mr. Goddard helped establish the Isaac Newton Institute for Mathematical Sciences, which he consciously modeled on the Institute for Advanced Study.

He also served as its first deputy director, and in that role he faced challenges more mundane than unifying physics — but no less important for the institute’s future.

“Before that, I hadn’t thought about what fund raising involved at a serious professional level,” he says. A little surprisingly, he liked it. “I found it immensely rewarding. Enormously affirming.”

So when the Institute for Advanced Study offered him the director position in 2004 — a job that required both scientific acumen and the fund-raising mentality of a start-up — he took it.

To serve as his top fund raiser, Mr. Goddard sought Mr. Gehret, who had worked primarily for symphonies in San Francisco and Chicago. And just as Mr. Goddard remembers being transformed during his two visiting years at the institute, Mr. Gehret says his time has changed him professionally.

Like the scholars on whose behalf he works, Mr. Gehret suddenly found the freedom to work on a long-term horizon, a change from the rushed world he was used to.

“For some orchestras, it was a matter of funding the next week,” he says. “In Chicago, we were doing four concerts a week, really pushing to get people there.”

The slower pace at the genteel institute, and the lack of aggravation that results, better suits him: “It’s a tremendously civil place. As much as I love the orchestra world and loved the concerts, it wasn’t a particularly civil place.”

The institute’s history blends easily with its pastoral setting. A pond and a forest with walking paths sit just south of it and a few hundred acres of corn just north. To potential donors, who approach by car on Einstein Drive, follow the walking paths Einstein frequented, and stroll by Founders Rock, an on-campus monument Einstein helped dedicate, it can be a potent mix.

And that’s why Mr. Goddard must be careful. Given its past, someone could easily view the institute as an intellectual museum only. So after a stroll on the tranquil grounds, Mr. Goddard takes them to campus buildings to meet Einstein’s successors, hard at work and buzzing with ideas, and can introduce them to the institute’s latest Nobelist, Eric S. Maskin, a 2007 laureate in economics.

“We’re proud to remind ourselves of the association with Einstein, and we remind people of that,” Mr. Goddard says. “But we have to remind them this is a living institution.”