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Posted on Thu, Sep 5, 2013 : 5:58 a.m.

$200M U-M donation puts spotlight on upcoming multibillion-dollar fundraising campaign

By Kellie Woodhouse

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Fundraising campaigns aren't built in a day.

University of Michigan unveiled a $200 million gift from New York real estate tycoon Stephen M. Ross early Wednesday morning; and while it took only a few hours for the higher education world to learn of the gift, it took college officials years to work with Ross and secure the contribution.

That's in part because Ross' gift is not only intended to provide funding for scholarships and new and upgraded buildings at the Stephen M. Ross School of Business and on the athletic campus, but also to spur other donors to action.

The university's capital campaign launches on Nov. 8 and the 73-year-old Ross will serve as chairman.

His $200 million gift is the largest single donation in university history and he previously donated $100 million to the business school that now bears his name. With lifetime giving to U-M totaling $313 million, Ross is the most generous donor ever to contribute to the university's coffers.

With these milestones secured for now, Ross is heralding in the next fundraising campaign, which will include his most recent grant.

U-M President Mary Sue Coleman and other U-M officials have been mum on the fundraising goal, but Coleman Wednesday promised the campaign would be U-M's "most significant." The last fundraising campaign ended in 2008 after four years and raised $3.2 billion, or $700 million more than the school's original goal.

"It's very strategic," U-M Vice President for Development Jerry May said of Ross' donation and its timing. "Steve, as chair of the next campaign, is part of the strategic process to actually create momentum, and so this is one of the biggest momentum building gifts we could ever have."

The gift comes about four months after the school announced a $110 million gift from Charles Munger —then the largest gift in college history— that will go toward funding a graduate student residence hall and fellowships.

In March, Helen Zell, wife of billionaire real estate tycoon Sam Zell, donated $50 million to fund a creative writing program. Also in March, a foundation formed by the now-deceased Samuel and Jean Frankel gave $25 million to the U-M Cardiovascular Center to finance clinical research and patient support. In September 2012, U-M's art school was renamed the Penny W. Stamps School of Art and Design in honor of Penny and E. Roe Stamps, who donated $32.5 million to the school.

All donations received since July 2011 will count toward U-M's upcoming fundraising campaign.

While many recent donations —such as much of Ross' gift, Munger's grant and Stamp's donation— have centered around buildings, either constructing them from scratch or renovating them, U-M officials say the upcoming campaign won't be as building-focused as the last campaign. Over the past decade, U-M has spent an average of $523 million per year on construction projects.

"Obviously there's buildings," Ross explained in an interview Wednesday. "Scholarships are very much a priority to really attract the best students there are, knowing today how much it costs to go to school."

Ross also said U-M will ask for endowments for professorships.

Coleman said the fundraising campaign will be focused on student aid and funding new student-centered programs and academic initiatives.

"We’re very focused around program," she said. "But, as Steve has said many times, if you don’t have the right facilities, then you can't do the education right."

Coleman, May and other U-M officials —such as business school dean Alison Davis Blake and athletic director Dave Brandon— have been consulting with Ross about a possible gift for multiple years. About a year or 18 months ago, Coleman asked Ross for a large gift and Ross agreed.

May said U-M is in the final stages of securing about 10 other large gifts, donations of $5 million or more, some of which will be announced before November. He said large gifts take between six months to 18 months to secure.

U-M Regent Kathy White said such gifts are becoming more and more important to Michigan higher education in an era of dwindling or flatlining state support.

"Public universities increasingly rely on our donor support to maintain and strengthen our excellence," she said.

For U-M, having an accomplished real estate builder worth $4.4 billion, according to Forbes, chair its campaign will likely mean a steady stream of sizable donations. Ross said he expects to do some "arm twisting" with donors and in an interview Coleman joked that the 1962 business school alumnus can be "very persuasive."

Kellie Woodhouse covers higher education for AnnArbor.com. Reach her at kelliewoodhouse@annarbor.com or 734-623-4602 and follow her on twitter.

Comments

C'est la vie

Fri, Sep 6, 2013 : 6:11 p.m.

It'll be great to have more stupendously beautiful structures to admire around campus. In contrast, other parts of Ann Arbor begin to resemble shanty towns, as residents delay basic repairs and struggle to keep up with property tax payments. Thank you to Mr. Ross for giving us a bright spot amidst all that!

nekm1

Fri, Sep 6, 2013 : 6:08 p.m.

With gifts like this, why is there any out of pocket tuition? Don't need more buildings, but how about some work for tuition opportunities?

Superior Twp voter

Fri, Sep 6, 2013 : 3:40 a.m.

But wait a moment. Isn't Mr. Ross a 1%'er? Isn't he among the RICH that has raped America? Isn't he just like Mitt? Mitt gives to benevolent causes, too. Oh yea, I get it now.

C'est la vie

Fri, Sep 6, 2013 : 6:02 p.m.

@Goober: You forgot to end your comment with your trademark "Go figure!" I may miss that when AA.com switches onto Mlive and I don't bother reading the comments!

Goober

Fri, Sep 6, 2013 : 4:51 p.m.

You are correct, dsponinni that the democrats are ruining America.

dsponini

Fri, Sep 6, 2013 : 12:28 p.m.

The obstructionist tea party of stupid HAS been ruining America for the past six years. Sometimes the truth hurts.

JLBD4

Fri, Sep 6, 2013 : 2:26 a.m.

Perhaps the university could contribute some funds to help support the fire department????

PersonX

Fri, Sep 6, 2013 : 1:31 a.m.

Let us hope that the capital campaign will not focus only on the professional schools but will also try to raise money for undergraduate education, for the arts and for graduate education, which is in dire straights. This is where UM trains the next generation of teachers/scholars. Business may be important, but it is hardly an intellectual proposition and football, fun though it may be, has not one thing to do with the educational goal of universities. Some of these things have been forgotten under this administration. The timing of the campaign is strange; a new president will come in who will have had nothing to do with planning it and will have to live with the goals of the outgoing president, whatever one may think of her.

Honest Abe

Thu, Sep 5, 2013 : 9:22 p.m.

Not one single, hungry mouth will benefit from all that money. You could donate a can of soup, and it would make more of a difference than that $200,000,000.00 ever will.

rm1

Thu, Sep 5, 2013 : 4:06 p.m.

One poster says: " It would be nice if some of these amazing amounts of money could go to scholarships" The article before does say the Ross donation is '"intended to provide funding for scholarships and new and upgraded buildings". And Mr. Ross is quoted as saying: ""Scholarships are very much a priority to really attract the best students". As for the other ill-considered complaint echoing around here, about U-M depriving Ann Arbor of chunks of its tax base, this gift doesn't seem to do any of that. The "new and upgraded buildings" are "at the Stephen M. Ross School of Business and on the athletic campus," which U-M owns. Of course, upgrades -- I understand the main focus -- don't require land acquisition. This poster should probably read the article before venturing to comment.

Sparty

Thu, Sep 5, 2013 : 6:44 p.m.

Amen @rm1. Posters seem focused on the $253 million that the State provides the UM in public aid and the fact that the University doesn't pay property taxes (although it does pay rental income for all of the properties that it rents), which is less than 5% of it's annual budget of $6 BILLION Dollars all pumped into the Ann Arbor Economy. SIX BILLION DOLLARS flowing into Ann Arbor. Without that, Ann Arbor would crash into devastation.

rm1

Thu, Sep 5, 2013 : 5:42 p.m.

I'd forgotten about the Edwards Bros. property. I should have said: "little of this gift seems headed for that use, although one parcel on S. State, contiguous to -- indeed essentially surrounded by -- the athletic campus seems ripe for acquisition." I have trouble understanding the complaint about U-M eroding the AA tax base. If the University did not pump the greater part of its $6 Billion total budgets into the local economy -- salaries etc. for faculty and staff, construction, purchases of supplies, hotel and restaurant receipts from football and other function attendees, etc. -- the AA tax base would be a fraction of what it is. Some people should get some perspective.

Trepang674

Thu, Sep 5, 2013 : 1:36 p.m.

Seriously Ross, you give the Athletic department a 100M..??? just to get a box seat?

andys

Thu, Sep 5, 2013 : 12:53 p.m.

"or $700,000 million more than the school's original goal." Wow, that's really shooting for the moon!

Kellie Woodhouse

Thu, Sep 5, 2013 : 3:48 p.m.

Indeed, that would be a lot of money. Thanks for noting.

DJ Earl

Thu, Sep 5, 2013 : 1:13 p.m.

Maybe once Sept 12 comes along there will be editors available to the writers.

Ned Racine

Thu, Sep 5, 2013 : 12:50 p.m.

Hi - Mr Edwards? It's Dave Brandon. We're ready to buy the Edwards Bros. property now.

Kellie Woodhouse

Thu, Sep 5, 2013 : 4:08 p.m.

Ah, yes. I am sure U-M planners are closely watching that property. We're working on an update there for readers.

JimmyD

Thu, Sep 5, 2013 : 12:44 p.m.

Yes these donors pick the programs they want. How quaint that they should have some ownership to the $MMM they're donating. If you want to make a donation to your favorite area, have at it.

Soothslayer

Thu, Sep 5, 2013 : 11:56 a.m.

Instead of continually increasing the size of the UM fiefdom at the expense of the Ann Arbor tax base why not use these resources to assist students from Michigan with tuition and living expenses? Imagine a focus on expanding accessibility for higher education, what a precident that would set.

Sparty

Thu, Sep 5, 2013 : 6:38 p.m.

If these donors didn't help with the buildings and technology, professorships, etc., that money would have to come out of the general fund ... meaning that the Students would have to pay more. Therefore, the donors ARE helping the Students HUGELY and seem to not be getting the appropriate gratitude in return.

RUKiddingMe

Thu, Sep 5, 2013 : 12:11 p.m.

Maizeman, dude; when they lower tuition let me know.

MaizeMan1999

Thu, Sep 5, 2013 : 12:07 p.m.

Dude... "Coleman said the fundraising campaign will be focused on student aid and funding new student-centered programs and academic initiatives."

missmisery

Thu, Sep 5, 2013 : 11:07 a.m.

It would be nice if some of these amazing amounts of money could go to scholarships, but most people who plunk down that kind of cash want a building named after them. I'll hope that some of the other donors won't be so egotistic and allow their gifts to go to the students.

JimmyD

Thu, Sep 5, 2013 : 12:40 p.m.

Miss - so you'd prefer that they not donate money?

MaizeMan1999

Thu, Sep 5, 2013 : 11:53 a.m.

Their money still goes to the students, even if a bit indirectly. Every dollar that a donor spends on renovating old buildings or building new ones is 1 less dollar that will need to come from the general fund will need to do the same. The more slack that's given to the general fund, the lower the tuition. Anyways, if you read the article, it says very clearly that the focus of this upcoming capital campaign will be focused on providing student aid.

zip the cat

Thu, Sep 5, 2013 : 10:47 a.m.

And with all the gazillion bucks they got they still get aid from the state And still do not pay any property taxes A total friggin crock of bull

Eep

Thu, Sep 5, 2013 : 6:03 p.m.

@mstairs - Since when do churches not have to pay postage? As far as I know, most non-profits (including churches) are eligible for a special postage rate that's below the normal amount paid by individuals and businesses, but they certainly don't get to mail things for free.

rm1

Thu, Sep 5, 2013 : 5:34 p.m.

"with all the gazillion bucks they got they still get aid from the state?" A little perspective. Last year U-M got $273.1 million from the Michigan legislature. ( http://www.annarbor.com/news/by-the-numbers-university-of-michigan/#.UDvEmEJU6I4 ) That's under 5% of the total budget of about $6 Billion (total budget = the general budget and the other three budgets). From memory, the legislature's contribution is up a couple of percent this year. If it sank much lower, I imagine the chorus urging privatization would grow louder (however unrealistically) But why exactly isn't it a good thing that the U-M brings in some billions, a large share of which is spent in the local economy? I can never understand what this complaint is about, except maybe satisfying an urge to complain? 8 votes up? really? If these funds did not flow into the local economy, Ann Arbor's tax base would be dramatically smaller.

mstairs

Thu, Sep 5, 2013 : 4:41 p.m.

Churches should also have to pay taxes/postage.

Eep

Thu, Sep 5, 2013 : 12:25 p.m.

@MaizeMan - Not actually true. Non-profit organizations pay property taxes on real estate that isn't being used for their charitable mission. In Michigan they are even liable for paying property taxes on vacant land that they own. This doesn't apply to public universities - which are exempt from taxes because they are part of the state government - NOT because they are non-profit organizations.

MaizeMan1999

Thu, Sep 5, 2013 : 11:44 a.m.

Michigan ain't alone. No non-profit university in the US, heck, no non-profit organization at all pays property taxes.

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