University Business - July 2007 - (Page 14)

BEHIND the NEWS The Giving Season Pickens gives $50 million to UT, but with a caveat; others just give—a lot. THIS YEAR’S EARLY SUMMER SEA son might need to be renamed “the giving season” in higher education. Stock market volatility, warnings about the housing market, and other cautions about leading economic indicators didn’t prevent high-profile donors from making some lavish gifts to universities. T. Boone Pickens, oilman and entrepreneur, captured the most attention with T. Boone Pickens two $50 million gifts to two medical centers that are part of The University of Texas System. The twin gifts—given to the Southwestern Medical Foundation and M.D. Anderson Cancer Center in Houston—do not exactly have strings attached, but they do come with some interesting stipulations. Each medical center must grow the $50 million into $500 million during the next 25 years, or none of the money can be spent. Further, if the investment teams do not make $500 million out of $50 million, the money must be given to Oklahoma State University, Pickens’ alma mater and a recent recipient of $165 million from him to help expand the athletics program. The stipulations are unusual, to say the least. “The time frame for keeping the gift and not spending it is extraordinarily long,” says Rae Goldsmith, vice president for communications and marketing at the Council for Advancement and Support of Education. Pickens’ added requirement that the money be given to another institution if the investment teams fail to reach their goals is unheard of in higher ed. “We U SO, WHO ELSE IS GIVING? Not to be outdone, other philanthropists and business executives are giving generously to higher ed this year. Some recent announcements include: Sanford I. Weill, now chairman emeritus of Citigroup, is part of a team of donors giving $400 million to Cornell to study diabetes, obesity, cancer, and diseases related to aging. Bill Gates is giving $105 million to the University of Washington through the Bill & Melinda Gates Foundation to create a global health institute. The university is kicking in an additional $20 million for the project. Washington and Lee University (Va.) received a pledge of $100 million—one of the largest sums ever given to a liberal arts institution—to boost need-based aid. An anonymous donor wants the University of Chicago to give full scholarships to 800 lower-income and deserving students. The money will also pay partial tuition for another 400 undergraduates. “Our donor is someone who himself felt his life had been transformed by the nature of the education he had,” President Robert Zimmer told the press. William Franke, the former CEO of America West Airlines, is giving $25 million to Northern Arizona University’s College of Business, a school he neither attended nor had any previous connection to. Thomas Siebel, former chairman of Siebel Systems, pledged that the University of Illinois will receive $100 million when he dies. He has previously given $40 million to the public university. Dorrance Hamilton, the Campbell Soup Co. heiress, will give $25 million to the University of the Arts (Pa.) to grow the endowment fund. Philanthropist Connie Lurie has given $10 million to San Jose State University’s College of Education (Calif.), while Washington & Jefferson College (Pa.) will use $10 million given by trustee John Swanson to build a new science center. —J.M.A. haven’t seen anything like this either,” adds Goldsmith. The foundation staffers at the UT facilities are confident, though. Obviously, large gifts like this are usually planned in advance and they were probably well aware of his expectations. Still, the investment team will have to achieve an estimated 9.6 percent annual rate of return to meet the requirement. General wisdom usually pegs good investment growth in higher ed at 9 percent, says Goldsmith. “He wouldn’t have given the gift if he didn’t think we could meet the goal and I don’t think we would have accepted it,” says Paul Bass, president of the Southwestern Medical Foundation. As for Pickens, his response is tied right to the bottom line. “My foundation will get a 10 for one yield on its money, and that’s good for all of us,” he says. —Jean Marie Angelo 14 | July 2007 universitybusiness.com http://universitybusiness.com

Table of Contents for the Digital Edition of University Business - July 2007

Contents
College Index
Company Index
Advisory Board
Editor's Note
People Watch
Sense of Place
Marketing
Viewpoint
Human Resources
Money Matters
Financial Aid
Community Colleges
Seeds of Scandal
Controlling the Flow
Special Delivery
Presidential Progress
Best Foot Forward: SOX and Financial Standards
Business Technology
What's New
Calendar of Events
Direct Connect
End Note

University Business - July 2007