With Hackney at helm, U.rode financially stable

University officials give President Sheldon Hackney top marks for fiscal leadership during his 12 years at the University, but they say tough challenges lie ahead. "I think he did a very fine job financially and was a major force in helping raise money for the University," the University Trustees' Budget and Finance Committee Chairperson Robert Fox said recently. "I think President Hackney gets high grades for his financial acumen." When Hackney became president in 1981, the University faced several financial problems. The University was severely underendowed for an institution of its size, with an endowment of only $218 million. Harvard University's endowment was $2.5 billion in 1981 and Princeton University's was over $1 billion a decade ago. The University had also just begun to repair the financial damage of five years of operating deficits, totalling $11 million, that the University had incurred during the early to mid-1970s. Another problem was that faculty salaries were below the level of several peer institutions, posing the threat that professors would be drawn away to other schools and the University would have trouble attracting new faculty members. "[But the financial situation] wasn't that bad," Hackney said last week. "The worst thing is that we were terribly underendowed." Hackney said that the University has made "tremendous" improvements in the the endowment through two funding-raising campaigns, Choosing Penn's Future and the $1 billion Campaign for Penn. "We have improved greatly, although we are still somewhat underendowed," Hackney added. "We are 15th in the country in endowment and over the next two to three years we might leap up three or four places in ranking because of our recent capital campaign." Currently the endowment is over $1 billion, almost five times its 1981 level. While Hackney gives credit for the campaign's success to Senior Vice President for Planning and Development Rick Nahm -- who headed the $1 billion capital campaign -- Nahm said this week that much of praise should go to Hackney. During the Choosing Penn's Future campaign, Hackney organized fundraising efforts so that all of the schools' separate fundraising efforts would be coordinated with the central administration's development office, Nahm said. "When we started this last capital campaign we could connect all the schools' efforts together so that everyone gained," he added. "That could never be accomplished without [Hackney's] leadership." Nahm also said Hackney had a vision for two things which were accomplished at the University and nowhere else in the country: the link between institutional planning and fundraising and the coordination of all parts of the University into a single development effort. "By putting those two initiatives together, Penn has raised more money than it could ever be expected to raise had it used any other system," he said. "That is something you will not find anywhere else at the research universities." Other University officials said that the University's ability to balance its budget for 11 of the past 12 years is a testament to Hackney's fiscal abilities. "I think that the test of his financial leadership is the fact that, in the current economic climate, the University has managed to balance the competing needs of all of its various programs and still remain with balanced budgets with the exception of the Vet School," Budget Director Stephen Golding said recently. Golding also said that the University's total operating budget has more than doubled in the last 12 years and now totals more than $1.5 billion. Provost Michael Aiken said that Hackney came up with the idea for the University's development campaign and credited Hackney with having maintained balanced budgets. Aiken also said that Hackney's initiative in beginning a new cost containment process is critical to the University's future. Hackney allowed his subordinates to use their own initiatives while working within a framework of goals he helped establish, Aiken added. "He gave all of his first lieutenants goals to accomplish but gave us the freedom to do it in our own way," Aiken said. He also said that faculty salaries, a source of concern in 1981, now rank sixth in the nation, according to a list compiled by the American Association of Universities. "We've had 11 to 12 years of growth in earning capacities," he added. "You can see that these were rather good years for faculty from that point of view." Hackney said the University has done well financially during his tenure. "The past is quite a spectacular story of success," he said. "We have not only operated with balanced budgets every year, but increased faculty salaries not only in real terms but in terms of our peers as well. And we have added programs, facilities, done renovations, and we have increased the endowment from $218 million to over $1 billion." But Hackney and other University administrators say that many challenges lie ahead. "One of the most important challenges for the University in fundraising is to maintain a sense of institutional purpose and direction that only the president and provost can provide and to be able to maintain that until the a new president and provost are found," Nahm said. The University, which has received millions of dollars from the state in the past, looks as though it may not be receiving large sums of state funding anymore. "The biggest challenges are right now because the actions of the state," Hackney said. "We are runnning the biggest budget deficit we have ever run and we see the need to slim down the administrative structure of the University. "We need to take costs out of the budget and we have a process that is in place that will do that during the next three to five years," he added. "That is the challenge."

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