This is an extraordinary time in Stanford's development. Advances in knowledge will shape this century, and the University is positioned to lead the way, fueling innovation in many areas.
Stanford's trajectory—from its founding 128 years ago to its emergence as one of the world's preeminent research and teaching universities—is largely due to a focus on excellence, and its entrepreneurial culture. Over the past 30 years in particular, the University's ability to anticipate and embrace change has been key.
For example, we have utilized the physical proximity of our schools to encourage collaboration and a more multidisciplinary approach to research and teaching, essential to addressing today's complex challenges. At Stanford, the whole is greater than the sum of the parts and that helps us attract the best students and faculty. The average number of awards won by today's professoriate is more than double what it was 30 years ago. U.S. News ranked five of Stanford's schools—business, education, engineering, law and medicine—in the top five in its 2014 Best Graduate Schools, and London's Times Higher Education recently ranked Stanford first in the world in the humanities and second overall, tying with Oxford.
To attract the most promising young scholars, Stanford significantly increased graduate student support. Twenty-five years ago, 71 percent of our graduate students received some form of financial support; today it's 85 percent. Since 2000, the University's own fellowship funding for graduate students has roughly tripled. The University-wide campaign that ended last year renewed attention to graduate student support and funded 400 new interdisciplinary and school-based fellowships.
Discovery does not happen in outmoded facilities, and over the past 25 years, Stanford's campus has been renewed. Much of that renewal occurred within the past 12 years—from our new Arts District to cutting-edge facilities such as the Knight Management Center, the Science and Engineering Quad, the Li Ka Shing Center for Learning and Knowledge and the Lorry I. Lokey Stem Cell Research Building.
Stanford's financial strength—and the unwavering support of our alumni and friends—has made these investments possible. Over the past 30 years, Stanford's endowment per student grew 6 percent annually, after inflation. University revenue increased an average of almost 3 percent per year, but the composition changed. External research funding, which drove the growth of the University from the 1960s through the end of the last century, contributes 9 percent less to annual revenue than it did 30 years ago. Endowment income, up from 6 to 21 percent of annual revenue, plays a far bigger role today. Although this change will not completely insulate us from the risk of reductions in the government's investment in research, the larger endowment provides much needed security.
We cannot rely on past approaches to fuel future innovation. In the coming decades, our capacity for campus growth will be constrained. Research funding from the government will likely not grow or will grow much more slowly. One area of great uncertainty is what will happen to the investment returns on the endowment. Will they show the stable and high growth rates seen in the 1980s and 1990s, or is the volatility of the last decade the new normal? We must be prepared either way. The philanthropy of alumni and friends, a significant contributor to Stanford's rise to excellence, will be even more critical.
There are tremendous opportunities ahead. And if we think strategically, focusing on opportunities offering the greatest impact, we can ensure that Stanford will continue as a pioneer in 2040 and the decades to come.
John Hennessey was the president of Stanford University.
