‘The Serena Williams of Fundraising’

Linda A. Cicero/Stanford University

The request was for a nine-figure gift.

It was early in Stanford University’s $1 billion fundraising effort for its undergraduate programs, announced in the fall of 2000. President John Hennessy, new to the job, asked his vice provost for undergraduate education to lead a presentation for a high-net-worth couple.

In a conference room on campus, John Bravman moved through the facts and figures in his carefully prepared PowerPoint slides, explaining some half-dozen programs the university hoped to build or strengthen. But it wasn’t long before the designated pitchman found himself sitting back to listen to Mr. Hennessy, who, unscripted, spoke so eloquently that it was easy to forget that he had inherited the campaign.

“John can paint a compelling picture like no one I know,” says Mr. Bravman, now the president of Bucknell University in Lewisburg, Pa.

The donation from the couple, relatively new in their philanthropic relationship with Stanford, followed thereafter.

It provided an early glimpse of what was to come: a stunning 16 years of fundraising captained by Mr. Hennessy and punctuated by a trio of billion-dollar-plus campaigns, all of it underscored by the doubling of the university’s endowment to $22.2 billion. Indeed, when he steps down in August, he will do so as one of the most prolific president-fundraisers in the history of higher education.

Not everyone is cheering. How much money is enough money, critics ask? But even as some lawmakers and nonprofit observers skewer the nation’s richest private universities for building up enormous untaxed endowments that they contend do little good for society, Mr. Hennessy champions development as an indispensable tool. Donors, he says, want to invest in ideas and institutions that generate social returns.

“It may be they are interested in curing cancer. It may be they’re interested in taking care of children,” Mr. Hennessy says. “It may be they are interested in reducing inequality in the country. The right thing is to find an alignment that works between what the donors want to see happen and what the university is capable of doing.”

‘A League of His Own’

To be sure, Stanford’s fundraising in recent years benefited from its relationship with technology entrepreneurs and venture capitalists. Mr. Hennessy is one of them. In addition to his $805,000 salary, the former Stanford engineering professor personally earned millions of dollars as a board member and shareholder in companies like Google and Cisco Systems.

But to ascribe the numbers solely to Stanford’s proximity to the skyrocketing wealth of Silicon Valley is a mistake, according to those who know its development operation. They describe a world-class fundraising team, investment in alumni relations, buy-in from the university’s powerful faculty, and a president with a long-term vision and the brilliance to communicate it to donors large and small.

“John Hennessy is the Serena Williams of fundraising,” says Bruce Flessner, a consultant who specializes in helping colleges and universities secure major gifts. “He plays in a league of his own, year after year after year. Stanford fundraising is about much more than records, but the university holds all the records.”

In a recent interview in his office on the Palo Alto, Calif., campus, 63-year-old Mr. Hennessy says he has focused much of his fundraising on big goals like increasing financial aid, bolstering the university’s arts programs, and creating interdisciplinary and multidisciplinary leadership positions on campus.

If there is a naivety about development, it’s that some think the wealthy should give simply because they have the means, says Mr. Hennessy.

“I’ve never found that argument, that you owe something to Stanford, you owe something to society, to be the one that is successful,” he says. “Most people who are wealthy do feel they want to give back, and they want to acknowledge the success they have had. But in the end, they want to know what their gift is going to do.”

Donors are smart. And they talk.

“Having happy donors is a great way to get more happy donors,” Mr. Hennessy says.

Winning Streak

Just how good has Stanford been at minting chatty, smiling donors under its outgoing president? Last year, it raised $1.63 billion, topping the Council for Aid to Education’s annual Voluntary Support of Education survey. It’s a familiar perch — Stanford finished No. 1 in the yearly tally of donations to colleges and universities 10 times in the past 15 years.

In 2012, with many institutions and charitable fundraisers still trying to shake off the Great Recession, Stanford became the first university to break the $1 billion mark for fundraising in a single year. Even after telling the Board of Trustees in summer 2015 that the following academic year would be his last, Mr. Hennessy continued to attract major gifts. In February, the university said that Nike co-founder Philip Knight was donating $400 million to support a new international-scholars program for graduate students from the developing world, to be led by Mr. Hennessy. It was the biggest among more than $700 million in donations to support the effort.

Even Mr. Hennessy seemed surprised: “I’ve raised a lot of money during my 15 years at Stanford,” he said during a conference call regarding the program. “I’ve never raised this much money this quickly.”

While the university’s fundraising for 2015-16 won’t formally conclude until the end of August, this year’s donations will boost total fundraising during Mr. Hennessy’s presidency to more than $12 billion, development officials say.

Growth Trajectory

The success at Stanford is the result of multiple factors, according to people on and off campus. By 2000, the university was already on a major growth trajectory. It enjoys extraordinarily devoted faculty and alumni and is imbued with the can-do attitude of Silicon Valley. Including its medical school and hospital, Stanford has an advancement staff of nearly 500.

Martin Shell, vice president of the office of development, speculates that the university’s coffers have also benefited from a broader social and political climate in which some individuals’ trust in government to solve problems has been diminished and donors have turned to higher education as institutions that can produce change.

And then there is Mr. Hennessy. His breadth and depth of knowledge give him the ability to ask probing questions that ultimately produce a set of ideas that are compelling both for the institution and for donors, Mr. Shell and others say.

“He can have a conversation with faculty members who have just published a new piece on Shakespeare, and five minutes after that he can be talking to an astrophysicist who is working at our linear accelerator,” Mr. Shell says.

Another key contribution from Mr. Hennessy: keeping the fundraising message on creating programs, constructing buildings, educating students, and solving world problems. That proved hugely effective during the Stanford Challenge, the university’s biggest campaign. The public phase ran from 2006 to 2011. As the president and others traveled the globe to talk to key constituents — they dubbed the tour “Leading Matters” — the top-line, $4.3 billion goal was rarely mentioned, Mr. Shell says.

“The less we talked about how much money we were raising, the more money we raised,” he says.

In 2009, during the Great Recession, Mr. Hennessy, Mr. Shell, and others debated whether to scale back or suspend the travel, which involved flying administrators and faculty to gatherings that sometimes attracted more than 1,000 people.

“I distinctly remember John saying, ‘No, we need to keep doing this. We are going to move forward. Doing Leading Matters is not about this campaign. Doing Leading Matters is about the next campaign and, even more importantly, about the next campaign after that Stanford does,’ " Mr. Shell recalls.

The Stanford Challenge raised $6.2 billion.

Magnetic Personality

Those who worked alongside Mr. Hennessy in fundraising describe a personality so magnetic that people can’t help but be drawn in. Steven Denning, the chairman of private-equity firm General Atlantic and of the Stanford Board of Trustees, got to know Mr. Hennessy while serving as one of four co-chairs of the Stanford Challenge campaign. His gifts to the university have included a $50 million pledge for a new building for the Knight-Hennessy Scholars program.

When the outgoing president approaches him with an idea, “I have great trust and confidence that not only is it a great idea that fits within his vision for the university, but I have great trust and confidence that he will be able to raise the capital to execute it, bring it to fruition, and make it a tangible reality,” Mr. Denning says.

And having been a member of the faculty, Mr. Hennessy commands tremendous respect among Stanford’s educators, which creates momentum for new undertakings and related fundraising efforts.

“He has the ability to appoint and marshal a wonderful set of players — deans, institute directors, fundraisers, faculty — and get them to all point in the same direction with the same purpose,” says Jeffrey Koseff, director of the Woods Institute for the Environment at Stanford.

Endowment Criticisms

Development at Stanford has not been without its bumps. During the Great Recession, Mr. Shell eliminated 50 fundraising positions, 19 by layoff and the rest by attrition. They were part of a reduction of 500 jobs across the campus.

And there will almost certainly be scrutiny ahead, with untaxed private university endowments and megagifts back in the cross hairs of Congress. One lawmaker has called for regulation that would require universities with endowments of more than $1 billion to spend a percentage of investment returns on student aid.

Others taking aim include The New Yorker writer Malcolm Gladwell. In a recent episode of his podcast that includes an interview with Mr. Hennessy, Mr. Gladwell tore into the new Knight-Hennessy Scholars program and its $700-million-plus endowment as a “boutique graduate program for 100 elite students.”

“Are precious metals also involved? Helicopters? Are they doing this on a beach in St. Barts?” Mr. Gladwell said. He described Mr. Hennessy’s responses to his questions — which included the outgoing president saying it would be hard to refer a major donor on to the public University of California system because he could not guarantee that the money would be well spent — as ridiculous, if not offensive. The university declined to comment on the podcast.

In his interview with The Chronicle, which took place before the Gladwell podcast was released, Mr. Hennessy said proposals on how to spend university endowment returns are gaining momentum amid valid concerns about the rising cost of higher education. But he calls them “not particularly good ideas.”

“I think what is misunderstood often is the role that endowment plays in subsidizing the entire educational process,” Mr. Hennessy says. “If we have an endowed chair and that faculty member is teaching courses, in some sense through the endowed chair we are subsidizing tuition because that salary is now paid not by tuition dollars but by endowment dollars. This seems to be completely missed in Congress.”

Emotional Ties

Mr. Hennessy, who is to be succeeded by Marc Tessier-Lavigne, a neuroscientist and president of the Rockefeller University in New York, says that competition for big donors is tough. The courting process is a slow one. The time between when a donor makes a first gift to the university and when that individual makes the first $1 million gift is about 20 years.

Mr. Hennessy says he sees many institutions of higher education that underinvest in alumni relations. At Stanford, development and alumni-relations work are done in concert.

“Alumni relations is the way you build that emotional tie. You build that knowledgeable alum who knows about the institution and remains engaged with it over many years,” Mr. Hennessy says. “That is harder to do because all smaller institutions — they’re pressed for money. And this is an investment you make today for the payoff 20 years from now.”

What does he looks for in a top development person? He describes someone who is a talented fundraiser in his or her own right and can work with administrators to fine-tune ideas and make them attractive to donors.

“I want somebody who can strategize with the senior leadership in the university in order to build a successful donor program,” Mr. Hennessy says. “This is where development has to come together with the academic side of the house to build something that is really successful.”