Thank you!

You may have heard about the incredible gift that we announced this past weekend, from John and Tashia Morgridge. Maybe it’s the amount that got your attention: $100 million. That’s the largest single gift from individual donors that we’ve ever received, and comes on top of a number of other gifts from the Morgridges in years past.

But it’s not just the amount that should catch your attention. This is a unique gift. It’s not for buildings. It’s not for naming rights to a college or center. It’s all designated as matching money to help fund faculty chairs. That means that anyone who wants to endow a named faculty chair need pay only half the usual endowment level and the Morgridge gift will match and endow the other half. And the name on the chair will be whatever name is selected by that donor. The Morgridge name will not be on any of these chairs.

This is a very Wisconsin gift, and a gift that reflects the values the Morgridges have always demonstrated. It’s not about them. It’s about making UW a better place and about inspiring other alums to give back.

What’s the effect of this gift? It’s transformative. The current levels established to endow named faculty awards are $1 million for a professorship, $2 million for a chair, and $3 million for a distinguished chair. We currently have 34 faculty awards that are funded at or above $2 million in endowment — FAR less than many of our peers — and another 102 chairs that are funded below $2 million. Most of these were given by generous alums at a time when the “price” of endowing a chair was less.

The Morgridge gift of $100 million will generate another $100 million in matching dollars … that’s $200 million in total for newly created faculty awards. If all were done at the chair level, that would amount to 100 new $2 million endowed chairs. These new chairs will provide appreciation, resources and professional status to highly productive UW faculty; they will help retain these researchers at UW; and they will give us additional tools to recruit new rising stars from elsewhere to Madison.

And, just to demonstrate that the Morgridges are not the only donors who care about the university, some of our other major donors tried to figure out how they could thank the Morgridges for their generosity over the years. They decided, since the Morgridge name is not on any of these chairs, that they would endow a chair in the Morgridges’ name.

As a result, more than 10 other donors have created the John and Tashia Morgridge Chair in Leadership, which will be held by the sitting chancellor. The endowment income received on that chair will be discretionary funds for the chancellor to use to seed new projects across the university — again, a very Wisconsin gift, with other donors’ gift money in someone else’s name for the benefit of the university. I’m deeply honored to be the first holder of this chair.

I’ve been around other universities that received very large gifts. But I’ve never been in a place where the donors were so self-effacing, and where they were so focused on what’s good for the university and its needs. I’m just overwhelmed by John and Tashia’s support and generosity, and by the support and generosity of all of our friends and alumni. We couldn’t be as good as we are at UW without you!

Let me clear about what this gift DOESN’T mean, however. It doesn’t mean that we have $100 million in new money to spend. Endowment gifts spin off 4.5 percent in income each year. So a $100 million gift, once we’ve fully received all the money, means that there is $4.5 million per year available for us to spend. Once we receive income from other donors to match this (which will probably take five or more years), that will become $200 million in endowment and $9 million in spendable income per year.

Gifts like this are enormously useful, but they in no way lessen the importance of maintaining a strong financial base of support from the state, from tuition, and from research dollars. Compare the $9 million that will be generated from this gift to the $23 million in budget cuts that we received in the spring of 2013 from the state. Or compare it to the $26 million that would be needed if we were to raise all of our faculty salaries to the mean level of their peers, which include public universities such as Michigan, UC Berkeley and Ohio State.

The income from these endowment funds will not be used to hire new faculty. That’s what state dollars do. The income from a $2 million chair pays $90,000 a year. That’s not nearly enough to hire a top-rate senior researcher in any field. Furthermore, a good part of these funds go to the professor for his or her research. Being a chaired professor means having dollars available from the chair’s endowment to seed new research, to buy equipment, or to hire undergraduate or graduate student research assistants. In this sense, faculty chairs ADD TO our current resources, but they don’t replace other dollars or fill other holes.

The University of Wisconsin–Madison is an amazing university and its financial stability depends upon the availability of state and federal funds, tuition, and philanthropy. We continue to work with every one of these partners to develop a vision that serves the university.  Our private donors are a key part of that equation and this gift reminds us all of how much we rely on the generosity and support of all our alumni donors.

Once again, thank you!