In higher education, the word "development" doesn't refer to bulldozers and steel beams.

It means private fund-raising. In simple terms: cold, hard cash.

As such, development has become a very important word at Penn State.

Donors gave the university $171 million last year, about eight percent of the university's income.

That might not sound like much, but it is twice the total amount donors gave in 1996.

Donations are responsible for many of Penn State's new professorships, scholarships, buildings and research programs.

A major fund-raising program, the Grand Destiny Campaign, is almost certain to surpass its $1 billion goal years early.

The booming economy has been good for philanthropy, said Rod Kirsch, Penn State's vice president for development and alumni relations.

"We see this as continuing to increase as we become better at it, and as alumni understand how important it is in the context of how the university is funded," Kirsch said. "We see it as being a real important part of the university."

Kirsch has a framed sign on a table in his office that says: "Have you raised any money today?" It was a gift when he left his last job at Indiana University. But when asked, most development officials and donors point out that it's not all about the money.

Many alumni volunteer their time to the university. Those who stay in contact with Penn State can help recent graduates find jobs or internships.

Often, money and time go hand in hand.

Edward Hintz, a 1959 Penn State graduate and successful Wall Street investor, had an idea a few years ago. Hintz, who recently became Board of Trustees president, was the first Grand Destiny Campaign chairman. He figured New York City would be a good place to find wealthy Penn State alumni.

"I sort of thought, gee, there's probably a lot of people here we don't know about and they're probably doing pretty well," Hintz said. "So let's harvest it while we can."

The Wall Street Initiative was born, creating a network of investors and alumni who gather in Manhattan for hors d'oeuvres and cocktails a few times a year.

From there, it grew to connect with the Smeal College of Business. Now it helps students find internships with Wall Street investment firms that employ Penn State alumni.

Hintz said it's hard to link the Wall Street Initiative with specific donations, but said it has definitely resulted in more gifts.

More of Penn State's regional development committees might try similar programs in other cities soon, Hintz said.

Penn State tries to keep a strong relationship with its graduates, maintaining the largest dues-paying alumni association in the country. The alumni office also keeps a monster database of everyone known to be affiliated with Penn State.

Kirsch said they have records on 750,000 people, businesses and foundations. A staff makes 20,000 updates to the list every month.

When administrators visit another city, the database can provide them with the names of the donors who live there. The database also helps the development office organize mass-mailings and phone solicitations.

Considering that the development office runs off an annual budget of $7.1 million, the returns for Penn State are terrific. But Kirsch cautions that more donations don't necessarily relate to tuition or the state appropriation.

Money from students and taxpayers covers the nuts-and-bolts operation of the university. Private gifts are likely to be directed toward specific things that improve the university — like adding luxury options to a car.

A few recent high-profile donations show this. In 1999, MBNA America Bank committed $10 million for a career center, athletic scholarships, a fitness center and the new alumni center. The Mitte Foundation, a fund based in Austin, Texas, gave $8.2 million toward scholarships in the Smeal College of Business last year. In 1997, William and Joan Schreyer pledged a record $30 million to endow the honors college that bears their name. Many Penn State faculty and alumni make smaller but more numerous donations to the annual budget.