A flood of money is pouring into the state’s top schools as the University of Chicago and University of Illinois have landed some of their largest-ever single donations within a week of each other.
Ken Griffin, the richest man in Illinois, committed $125 million to U. of C.’s economics department, university leaders will announce Wednesday. It is the second-largest gift in the university’s history, officials said, behind the $300 million from David G. Booth to the business school in 2008.
Last week, Larry and Beth Gies gave $150 million to Urbana-Champaign’s business school, which will be renamed in their honor. That is biggest gift in the university’s history.
And those gifts, coming amid a sustained economic expansion and as equities markets set records seemingly every day, are just the latest in what has become a cascade of private money for top universities.
In 2017 alone, the Duchossois family donated $100 million in May for research to University of Chicago Medicine — the medical school’s largest ever donation — and Amy and Richard F. Wallman gave the university’s Booth School of Business $75 million in October.
The recent mega gifts shows several factors at work, experts say.
The University of Illinois, University of Chicago and Northwestern University all are in the midst of multibillion-dollar fundraising campaigns, which tend to attract prominent donations.
Experts also say it is common for large gifts to be revealed in the fall, close to homecoming celebrations.
Nationally, data show significant growth in gifts and commitments to higher education institutions even as donations in the high eight figures or even nine figures remain relatively rare.
Additionally, public universities are becoming more ambitious and successful in fundraising, routinely generating outside donations comparable to top private institutions. The University of Illinois at Chicago, for example, announced its own $750 million fundraising campaign on Saturday.
“It’s not just because everyone wants to be in the ‘three comma’ club of billion-dollar campaigns,” said Jim Moore, Jr. president and CEO of the U. of I. Foundation. “The reality is that the funding model for public higher education is changing. The public funds are just not there like they once were. Private support is going to continue to play a greater and greater role in the current and the evolving funding model for these institutions.”
Griffin’s gift will support scholarships for third- and fourth-year economics majors through the university’s Odyssey program, which eliminates loans and work-study requirements for low- and middle-income students. It also will help launch the Kenneth C. Griffin Applied Economics Research Incubator, school leaders said.
The economics department will be named for Griffin, who also is a member of the board of trustees.
In an interview, Griffin said he wanted to help continue U. of C.’s advances and achievements in economics. Richard H. Thaler won the 2017 Nobel Memorial Prize in Economic Sciences last month, the university’s 28th award in that category.
“I am proud to support the incredible economics department at the University of Chicago,” Griffin said. “So many of the great thought leaders that have shaped economics — Gary Becker, Milton Friedman — what an unbelievable success story they’ve had in their field.”
Griffin also said he wanted to support the university’s need-blind admissions, in which a candidate’s ability to pay is not considered in the admissions process.
“As Americans, I think we really believe that with the meritocracy that exists in our country, the equality of opportunity is so important to the foundation of our culture and our society,” Griffin said.
Amanda Woodward, interim dean of the social sciences division, said there is a growing desire within the field of economics to do more research involving field experimentation and big data analytics.
“Both of those research endeavors are expensive,” Woodward said. “They take a lot of work to do well and to develop. “There’s just a need to support this kind of research that isn’t filled in any other way. This kind of gift really enables that, and that will be much of the effort of this research incubator.”
The Gies family gift will be used to create graduate programs and make the course offerings more accessible to students, regardless of location or economic status, leaders said. Before this, U. of I.’s top gifts were $100 million from Thomas M. Siebel in 2007 and from the Grainger Foundation in 2013.
The Gies gift was announced as University of Illinois was starting the public phase of a five-year, $3.04 billion fundraising campaign, the system’s most aggressive effort ever. Within a year of Northwestern’s public fundraising launch to raise $3.75 billion, the university secured a record $101 million donation from Roberta Buffett Elliott, then a $92 million gift from alum Louis Simpson and his wife, Kimberly Querrey.
U. of C. opened a $4.5 billion campaign in 2014, the biggest in the Chicago area, later raising the target to $5 billion.
Only 13 other schools have secured donations of $100 million or more in 2017, according to a database of large gifts compiled by The Chronicle of Higher Education. Only six universities received gifts equal to or larger than $150 million this year.
A 2017 study by Marts & Lundy, a fundraising consulting firm, show the dollar value of education gifts above $10 million increased from $5.57 billion in 2015 to nearly $6.2 billion in 2016, an 11 percent jump. There were fewer gifts of at least $50 million, but the cumulative value of those donations grew from $2.94 billion to $3.21 billion, according to the study.
One factor driving the largesse, one expert said, is the expanding economy and soaring equities markets.
“There’s always been a strong correlation between major gifts and the market,” said David Bass, senior director of research for Council for the Advancement and Support of Education in Washington, D.C. “The fact that there are a lot of people with a lot of appreciated assets, it can be a very desirable things to say you’re going to cash out now. When people think of their financial planning, it’s a good moment to make those kinds of gifts.”
Griffin’s net worth, for example, increased by $1 billion this year, according to Forbes.
Bass added that benefactors see higher education giving as a way to achieve tangible social, scientific and economic change.
“When (donors) make a major gift to a university, it might not be because of fondness for alma mater,” Bass said. “It might be because they look at that university as a partner that can help them achieve a major philanthropic purpose: ‘I want to cure a disease or I want to create opportunities for a whole generation of students in a state.’”
Michael Faber of University of California, San Francisco had a similar point of view.
UCSF, which solely offers graduate and professional programs in health sciences, collected nearly $600 million in 2016, according to an annual survey from the Council for Aid to Education. UCSF also claimed the largest gift among public schools in 2017: a colossal $500 million donation from the Helen Diller Foundation, according to The Chronicle.
“I think one of the big things driving the funding here is that people want to solve a big problem,” said Faber, associate vice chancellor of university development and alumni relations. “They don’t necessarily give to UCSF, but they give through us to things like diabetes and cancer, things we’re really good at tackling.”
UCSF was the most successful public institution at fundraising although many others, even in the Midwest, are amassing yearly donations that put them in league with top private schools. University of Michigan raised about $434 million, Ohio State University collected more than $386 million and Indiana University secured about $361 million, according to the CAE study.
Bass said the first major fundraising campaigns at public colleges started in the 1980s and gained momentum as state support began declining.
“What we’re seeing I think is the culmination of decades of work in public higher education,” he said. “One of the success factors for a campaign is having long-established relationships based on trust and confidence with prospective donors. Those relationships can take a long time to build.”
Indiana University has been so successful with its current campaign that school officials reset the goal from $2.5 billion to $3 billion, according to Jeff Lindauer, vice president of advancement services and managing director of capital campaigns for the IU Foundation.
Lindauer said one key to IU’s success is carefully matching potential donors to projects, programs and initiatives that fit their philanthropic interests.
“It’s sort of a joke in higher education that every university needs a parking garage. It’s really hard to find a donor interested in funding a parking garage,” Lindauer said. “If we meet with you as donor, for us to be successful, we need to do less of the speaking and more of the listening, and hear how the donor wants to realize their philanthropic dream.”
The three University of Illinois schools detailed their funding goals this month. In addition to UIC’s $750 million campaign, Urbana-Champaign and Springfield previously revealed their aims of $2.25 billion and $40 million.
All told, the three-school system is aiming to collect over $600 million more than the previous campaign, “Brilliant Futures,” which ended in 2011 and collected a record $2.43 billion.
“These are ambitious goals but we’re going to meet them and exceed them,” President Timothy Killeen said.
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