This is the second half of President Pusey's annual report. It deals entirely with the University's immediate capital needs. The first half dealt with other subjects. -- Ed.

But the greatest achievement of 1965-66, I hope the historians may one day say in retrospect, was the advancement of plans for the largest effort to secure new capital funds ever yet undertaken by the University. Since this will seem startling news to many, I must make an effort at some length, to describe it.

We have been continuously occupied in recent years in raising large amounts of new capital, in the first instance to meet a backlog of accumulated need. There have been two widely publicized successes in the effort. The first was the Program for Harvard College which ten years ago set out to gain $82.5 million and in the end it succeeded in raising $103 million. When the task of providing in Lehman Hall a center for the non-resident Dudley House is completed in January 1967 and when the tenth undergraduate house, now on the architect's drawing board, opens in September 1969, we shall be able at last to say that this Program is really completed.

The second major effort in recent fund raising was the Program for Harvard Medicine, which sought $58 million, chiefly to support new professorships and complete the Countway Library. This effort was brought to a successful conclusion during 1964-65, the final year in the long period of George Berry's extraordinarily constructive Deanship.

These, and a number of smaller less publicized efforts carried on at the same time during these years, helped the University to catch up with many existing needs, but by no means with all of them. And as the University has continued to respond to challenge in a period of dynamic development, inevitably many new, and some very large needs, have been freshly engendered.

Harvard is a university, but from another point of view, it can only be understood as a kind of federation of semi-autonomous institutions, all parts of which are ultimately responsible to the President and the Governing Boards. There are ten major units of instruction and research--such as the Law School, the Medical School, the Business School, and the Faculty of Arts and Sciences (serving both the College and Graduate School)--each with its own independent departments and interests; and there are various other sime-independent units, many of considerable size, in the museums, forests, and other kinds of centers which together make the many departments of Harvard here and abroad. Each department is a separate budgetary unit with its own resources and needs, responsible for its own finances. So from a financial, as opposed to an intellectual point of view Harvard is many institutions, and its endowment is divided in comparatively small amounts among them (in quite unequal amounts, some would be quick to say). Though the University's endowment may seem large in total, when its separately owned fractions are measured against the demands of the many and various scholarly activities of the University, their adequacy comes quickly into question.

A New Policy

It is not surprising in view of the University's present standing in the world, and its extraordinary vitality, that demands for new capital are many and urgent. In view of their multiplicity it was decided last year that the University could not now mount another single central effort for capital funds and give it more prominence and attention than a number of others. Instead a new policy of fund-raising was adopted. Under this a number of efforts of equal standing (in terms of the attention and assistance they may expect to receive from the central administration) have now been authorized. The success of all of them is important for the University's health. Though the asking of no one of them considered in itself is frighteningly formidable, together they add up to a new, for us, stupendous goal of more than $160 million. But such is the measure of our present, immediate need for additional capital funds!

Let me try to indicate the importance and urgency of this effort by quickly running through the principal campaigns now in progress or in prospect. (I should like to say at once, parenthetically, that a major ground for hope for success in these efforts is the quality of the alumni leadership we have been able to attract to head them. These leaders' acceptance of such responsibility testifies both to their loyalty and devotion, and to the importance of the causes they have agreed to serve).

I have already referred to the proposed relocation of the John Fitzgerald Kennedy School of Government. The first step for Harvard in this large plan involves construction of a new building for international studies, the need for which has been recognized for a long time--indeed since before Mr. Kennedy was elected President. The building is intended to provide a home for the several international and regional programs which have developed, chiefly in the Faculty of Arts and Sciences, during the past twenty years. While these have grown rapidly in number, size and importance, they have had to subsist where they could, inefficiently, in inadequate and dispersed quarters. Two years ago, in connection with its large grant for international studies, the Ford Foundation promised $2.5 million toward a building to provide a centralized home for these programs. But an additional $6 million will be required to construct this building and to provide endowment to support its operating cost. The Honorable Douglas Dillon, now serving a second term as Overseer after long and distinguished public service, is leading the effort to secure these funds. Though they have proved difficult to get, something more than $1.4 million of the amount required has now been raised, and surely the remainder will be found. But, as has been indicated, much, much more will then be needed to complete the desirable major move now proposed for the whole Kennedy School.

School of Design

A committee chaired by another Overseer, John L. Loeb, is seeking $11.6 million for the School of Design. This is the first serious venture to provide new capital for this School since its initial establishment more than sixty years ago. The School has wanted a new home for generations and it now also requires additional endowment for a number of purposes: to provide more fellowship support for students, to bring its inadequate level of faculty salaries closer to the general University standard, to establish professorships in new areas of concern, and properly to care for and strengthen its invaluable library collections. More than $4 million of the $6 million needed for the building has now been raised. (This includes a construction grant of a little more than $2 million granted on a matching basis by the Office of Education of the Federal Government). And approximately $2.5 million of the $5.5 million needed in added endowment has now also either been given or pledged. At the same time, happily, the effort being made for capital funds has brought sizeable helpful new increments in "soft money" for current expenses. But despite all that has been achieved, this important drive for new capital remains some $5 million short of its goal.

The annual operating budget of the Graduate School of Public Health has risen from $1.4 million to more than $6 million during the relatively short period of Dr. Snyder's deanship. During this same period more than $8 million has been spent by the School, for new construction and remodeling of its physical plant, and its endowment resources have risen from $6 million to more than $18 million. But the School still has longe-range capital needs estimated at $30 million. A pressing immediate goal has been to raise $7.4 million to add eleven floors to finish one of its major research buildings begun more than five years ago and to complete the final floor on another. The School was promised $2.4 million toward this undertaking by the Health Research Facilities Branch of the National Institutes of Health. Other donors--foundations, corporations, individuals--promised other sums; but crucial amounts were contingent upon the full cost of construction being raised by the end of 1966. By an heroic effort during which the Dean and his helpers campaigned tirelessly for months the funds, where assured and it is a pleasure to announce that contracts for the new construction have now been let. Meanwhile something more than $1 million is still required properly to equip the new areas. And in the not distant future $5 million will be required to raze the Huntington Building and erect on that site a new structure for teaching and research.

Business School

The Business School acquired last year two new small, and one completely remodelled building. Following a pattern set in the School's original buildings, they were named for Secretaries of the Treasury--this time, because of the interest and help of friends, for the recent Secretaries, Douglas Dillon, George Humphrey, and Robert Anderson. But the School seeks other buildings and additional capital both in the long and in the short range. The amount of the School's annual costs of operation covered by income from endowment is exceptionally small. In an effort to improve this situation, Dean Baker has been trying to add three endowed professorships a year. He has been successful in this effort in each of the past two years. Last year there were added the Royal Little Professorship of Business Administration, the George Gund Professorship of Commercial Banking, and the Frank Plumpton Ramsey Professorship of Managerial Economics, the latter, however, a joint professorship with the Department of Economics in the Faculty of Arts and Sciences.