Johns Hopkins University announced today it would pledge about $3.2 million to Peabody Institute's emergency fund-raising campaign so the music school can meet a state-imposed deadline Saturday.
At a news conference, Johns Hopkins President William Richardson said Peabody, which is affiliated with Hopkins, had raised $11.8 million from private sources over the summer, leaving it short of the state-set quota of $15 million.
Richardson said the university will guarantee the $3.2 million that still needs to be raised, so Peabody can qualify for $30 million in state support that will put Peabody on better financial footing and assure that the conservatory remains open.
"The 3.2 million-dollar pledge is an expression of the university's confidence in Peabody," Richardson said. "The $12 million raised in such a compressed time created a favorable impression on the board of trustees."
If Peabody is unable to raise the $3.2 million in the next five years, the university will be obligated to provide the money. But Peabody officials said they were confident that the $3.2 million guaranteed by Hopkins would be raised from private donors during the five years that a state-backed plan to rescue the 130-year-old conservatory will take effect.
In the last session of the General Assembly, Lt. Gov. Melvin A. Steinberg backed a financial plan to rescue Peabody, after Johns Hopkins announced that it could no longer cover the school's annual deficits.
The three-part plan approved by the legislature calls for a mix of state, private and university support. The state is to contribute $30 million over five years to offset operating deficits and enlarge Peabody's endowment. The private fund-raising campaign, which had the Sept. 15 deadline, is to provide $15 million for the endowment.
Johns Hopkins will continue to partially cover Peabody's deficits until the endowment, a nest egg that generates interest income, begins to produce enough cash to cover the school's operating deficits.
"Hopkins is working out of two hats by covering the deficits and raising the pledge," said Steinberg, who was at today's news conference at Peabody. "It represents a good-faith commitment on behalf of the Board of Trustees toward Peabody."
Despite the positive outcome, Peabody's supporters had to admit that the highly publicized fund-raising effort had come up short.
"It was obvious to me that we would not make the goal based on a technicality [the Sept. 15 deadline], so, to comply with legislative intent we approached Hopkins to guarantee the goal," Steinberg said.
"It is a bona-fide pledge on their part; how they come up with the money is their problem."