U of M's private giving dips, but it's still a record

The school saw an increasingly important source of funding drop from last year's historic high, but much of that money came from two unusually large gifts.

By JENNA ROSS, Star Tribune

Last update: November 13, 2009 - 10:40 PM

Donors gave less to the University of Minnesota this year than they did last year, but the second most in history.

The U brought in $267 million in gifts and pledges during fiscal year 2009 -- about 7.6 percent less than last year's record-setting total. Much of that money came from two unusually large gifts and from donations for the new, on-campus football stadium, a new report shows.

Private giving is a small part of the U's annual budget -- just 6 percent -- but it is of big import these days.

State funding, once the university's largest source of revenue, now accounts for only a fifth of its operating budget. So university leaders are looking to bump up other sources of income. One is private fundraising.

But private gifts don't work like public funding. The vast majority of donors give to specific projects or purposes, leaving little leeway for the university to use the money to fill gaps.

"Donors are not attracted to the pothole approach to funding the university," said U President Robert Bruininks.

Just $10 million -- or about 4 percent -- of the total amount given last year came as "unrestricted" funds. That is typical of most years, said Steve Goldstein, president and CEO of the University of Minnesota Foundation.

"It's small, but it's important, and it's flexible," he told the U's Board of Regents at its meeting Friday. Several regents wondered whether the U ought to focus on increasing that number in the future.

Last year's two biggest gifts were $50 million for the children's hospital from Caroline Amplatz, in honor of her father, a retired professor, and $40 million for the medical school to research Type 1 diabetes from Richard Schulze, founder and chairman of Best Buy.

The U calls these "transformational" gifts, and they're a priority.

Nabbing them takes time. The three biggest gifts took between 18 months and three years to bring in, said Becky Malkerson, president and CEO of the Minnesota Medical Foundation.

The goal, she said, is to match donor's priorities with the U's "areas of excellence." Donors want to see the U help cure diseases and make discoveries with their money.

Increasingly, they want to do so quickly. Donors are less interested in long-term endowments, Bruininks said. "They want to achieve real results not 40 years from now, not 50 years from now, but in the next 10."

Donors also gave and pledged $35 million for student support -- another priority and about 13 percent of the $267 million total.

Overall, it cost the U foundations 11 cents to raise a dollar last year, compared with 9 cents a dollar in fiscal year 2008 and 9.5 cents a dollar in 1999.

Despite the dip from the $289 million total in 2008, university leaders praised the annual report as "a positive outcome in a very difficult economic period," Goldstein said.

In a July report, the Council for Advancement and Support of Education estimated that schools, colleges and universities would see their private giving decline by an average of 3.9 percent for fiscal year 2009 -- but then rebound this year. Goldstein, too, was "optimistic."

Jenna Ross • 612-673-7168

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