University of Wisconsin-Madison business alums are taking their famous Badger pride to new heights, issuing an unusual—and lucrative—mandate to the school: "Keep That Name."
In an unusual twist in the business school naming game—generally, a wealthy donor gives a multimillion-dollar gift to get his name on the school—the school formally known as Wisconsin School of Business has received an $85 million group donation from alumni that will allow the school to keep its current name for the next 20 years.
The school announced the gift on Oct. 27 during homecoming weekend, surprising the B-school world as it bucked the trend of adding a new moniker in exchange for a big-time donation. A group of 13 alumni, known collectively as the "Wisconsin Naming Partnership," donated at least $5 million each to the school as part of the deal.
A Midwestern Asset
A long-term interest in the greater good of the Wisconsin B-school—and the escalating value of naming rights—is what spurred alums to become members of the naming partnership, says Ted Kellner, a 1969 graduate, and chairman and CEO of Milwaukee-based Fiduciary Management. Kellner says he signed onto the deal because he realized the Wisconsin name would be a strategic asset for the school in years to come; it could eventually bring upward of $200 million to $225 million for the school in 20 years, he estimates.
"It really is a very creative way to leverage a very important asset, which is the name of the school," says Kellner.
Ab Nicholas, a 1952 alum of the school and one of the 13 donors, says the concept had a Midwestern modesty that appealed to alumni.
"Probably three to five of us could have funded the $100 million to put our name on the B-school, but instead, we chose to be part of this," says Nicholas, who played basketball during his time at the school in the 1950s and is now chairman and CEO of Chenequa (Wis.)-based investment firm Nicholas Co. "This is part of the Wisconsin tradition. The egos are removed. We wanted to keep the name of the Wisconsin School of Business, which is very Wisconsinite."
Securing Brand Identity
The Wisconsin announcement is a "new twist on a very old tradition" of university giving, says Rae Goldsmith, a spokeswoman for the Council for Advancement & Support of Education. The practice of naming a school after a magnanimous donor dates back to 1636, when the Great and General Court of the Massachusetts Bay Colony voted to name Harvard College after its first benefactor, John Harvard.
In recent years, gifts from large donors have helped schools strengthen their programs, hire new faculty, and fund more aggressive recruiting efforts. Business schools have been particularly successful in soliciting large donations from alumni and have renamed schools in return. For instance, Carnegie Mellon University renamed its business school in 2004 after receiving a $55 million gift from hedge fund manager David Tepper. The same year, the University of Michigan renamed its business school after getting $100 million from real estate developer Stephen Ross.
Wisconsin School of Business Dean Michael Knetter anticipated following that well-worn fund-raising path when he took his job in 2002. His original vision was to solicit a $50 million donation from a prominent alum in exchange for the naming rights. However, he says, he realized that by giving away its name, Wisconsin would essentially lose one of its most valuable assets, especially if naming prices continue to rise at the rapid rates seen in the past decade.
In addition, the school would have to create a new brand identity, a costly endeavor and one that might irk alumni, students, and faculty who have a loyal Midwestern pride in the school's name, he says.
"Our name is a brand we want to stick with, and I didn't want to create that tension on campus of, 'Oh, there goes the B-schools giving themselves their own name after some wealthy individual,'" Knetter says.
After mulling it over, he decided to take a different approach. In 2005, he set out asking a handful of alumni whether they would be interested in donating $5 million to the school in the interest of maintaining the school's name for 20 years. Over the next two years, the idea snowballed and donations to the project climbed to $20 million, then $60 million, and—during the two weeks before the school made the announcement—up to $80 million. Just hours before the announcement was made at homecoming weekend, another $5 million rolled in, bringing the total to $85 million.
"We never had a $5 million unrestricted gift in our school's history, so to get 13 in one day—that's pretty cool," says Knetter. The school plans to use the majority of the money to hire new faculty for the school and to improve programming, he says.
John Fernandes, president of the Association to Advance Collegiate Schools of Business, says the "do-not-name" deal appears to be a first, and could have a ripple effect in the larger B-school world. While the idea is unlikely to take hold with the top-ranked business schools—most of which are already named—other state business schools and relatively young business schools will take note.
"This is probably an idea that other business schools will replicate," Fernandes says. "There are probably 50 schools today not named that are thinking, 'Do you think we can round up 10 to 15 donors to give us up to $50 million?'"