Over the years, time and use have taken their toll. In the late 1990s, the three volunteer organizations that support Terrace Hill — the Terrace Hill Commission, the Terrace Hill Society and the Terrace Hill Foundation — united in a major capital fund-raising effort to restore and renovate the landmark as a Legacy for Iowans. The campaign was successfully concluded in 2001, having raised more than $4 million.

Contributions from the Legacy for Iowans campaign were used to install a sprinkler system; update fire alarms and smoke detectors; upgrade heating, ventilation, air conditioning, electrical and plumbing systems; rebuild deteriorating porches, cornices, balconies and doors; repair and replace the original slate roof; fix dormer, brick, mortar, foundation and drainage systems; repaint the exterior; replace and repair windows; construct a service courtyard; restore the exterior of the Carriage House; and initiate educational outreach programs for students statewide.