In the stock market, an initial investment of $20 million that results in a $120 million pool is seen as a brilliant move by a venture capitalist.
But could a bureaucratic institution that is 143 years old make a similar move? At the University of Washington, the answer is "yes" as it launches a Matching Initiative that will add $120 million to its endowment.
The initiative takes $20 million in UW royalty and licensing revenue and adds another $20 million from visionary donors"The Founders"to create a $40 million pool. The UW then seeks private donors who would like to have their gifts matched on a 2 to 1 basis. Over the next few years, the UW hopes to attract $80 million in gifts that qualify for the match. Add up the three sources of revenue and the UW ends up with $120 million to benefit students and faculty.
Leveraging precious UW dollars in a time of tight budgets could be a gamble, but the results are already paying off, says Associate Vice President for Development Marilyn Montgomery. There are already several founders who have given more than half the funds necessary to build the Matching Initiative Pool, she says, and the UW has already had seven gifts that qualify for the match.
Scholarships, fellowships and professorships in chemistry, forest resources, engineering, computer science and university-wide programs have already benefited. "There has been a demonstrable up-tick in commitments from donors who know that their gifts will be matched," Montgomery says.
The new initiative comes at a crucial point in the history of the University. "The University of Washington, like many other public universities, realizes that the amount of state funding is not going to increase substantially. How do you fill in the gaps to keep that margin of excellence?" asks Director of Special Projects Debra Friedman.
Looking at matching programs at other public and private universities, President Lee Hunstman realized that the UW needed to commit some of its own revenues if it wanted others to step up. For years the UW had set aside income from royalties and patents. Huntsman initiated the idea of leveraging $20 million in revenue that did not come from taxpayers or tuition to increase the UW's endowment. "President Huntsman deserves a lot of the credit for this," says Montgomery. "He had the foresight to carry it forward."
The UW regents agreed. When they approved the plan Jan. 16, Regent Jeffrey Brotman, '64, '67, said, "This is one of the few times we've put our money where our mouth is. It's significantly easier to sell the idea of scholarships when the UW is coming up with its own money, too."
The next step was to find "The Founders." Most donors want to make a contribution to a specific department or program. UW officials had to find donors willing to make a different kind of giftone that goes to a matching pool.
The first founder was the Washington Research Foundation (WRF), which has supported the UW for many years and is a UW Presidential Laureate. The foundation committed $5 million, while continuing to support other programs on campus. Another founder is venture capitalist David Bonderman, '63, former president of the UW Foundation. "Both WRF and David are a broad-thinking and entrepreneurial. They are clearly enthusiastic about transformational gifts to the UW," says VP for Development and Alumni Relations Connie Kravas.
Other founders include Regent William Gates, '49, '50, and his wife Mimi Gardner Gates; Microsoft executive Bill Neukom and his wife Sally Neukom; and bequests from several estates. As of May, more than $11.2 million in founder gifts were matched with $11.2 million in UW fundscreating a pool of $22.4 million.
The UW is currently in discussion with donors who would like their gifts matched on a 2-to-1 basis from this pool. To qualify for a match, gifts must go to undergraduate scholarships, professional and graduate fellowships, and faculty professorships or chairs. The minimum amount to qualify is $100,000 for endowed scholarships and fellowships, which would get a $50,000 match from the pool, for a total of $150,000. The minimum for professorships is $250,000 and for chairs $1 million. These are matched at a 2-to-1 ratio.
To find out more about the UW Matching Initiative, contact the UW Foundation at 1-800-326-7566 or visit the Support UW site.