'U' leads state in endowment funds

By Lisa Koivu

Daily Staff Reporter

Thanks to generous donations from alumni and gifts from major corporations, the University has an endowment fund totaling more than $2.5 billion - more than any school in the state.

Endowments at four private colleges in Michigan and 13 public institutions, including the University, total more than $3.6 billion.

Michigan State University, with a $265 million endowment, comes in second.

According to the University's News and Information Services, endowments are given to the University by donors who as a condition of the gift only want investment returns spent so the principal is maintained in perpetuity.

Endowments typically take the form of stocks, bonds, cash and real estate. Judy Malcolm, director of development communications, said the endowments are made up primarily of large gifts to the University.

"The people donating decide what the money should go for. Some decide to endow professorships or scholarships, and some want the money to support particular programs," Malcolm said.

Malcolm said endowments for professorships add prestige because they enable the University to attract the finest educators. "Money going towards professorships often pays the professors' salary, for the research to be done and often for research assistants. Every year part of the investment is paid out, and the money can last forever," she said.

In 1989, University endowment funds totaled $400 million, but thanks to donations from alumni such as A. Alfred Taubman, that total has escalated throughout the past decade.

Taubman, a former School of Architecture student whose company owns and operates some of the nation's premiere retail facilities, donated $30 million to the University last summer. The gift was the largest ever given to any architecture school in the nation and was Taubman's largest donation to the University.

Prior to the donation last summer, Taubman gave millions of dollars to help construct the Medical School's library and a health care center at the University Hospitals.

The largest factor in the University's large endowment is tied to a campaign started in 1992 aimed at generating $1 billion. Donations from companies including Ford, Chrysler, General Motors and Dow Chemical helped the University to acquire $1.3 billion in five years.

The University uses its endowments to fund many academic projects and programs on campus, such as research, teaching and other expenses which otherwise would be funded with tuition revenue, allowing the University to keep tuition increases lower, according to News and Information Services.

At Grand Valley State University in Allendale, President Arend Lubbers has made building on its $35.5 million endowment a priority.

"We use the endowment earnings almost exclusively to support our scholarship and financial aid programs," Grand Valley spokesman Matt McLogan said. "If we didn't, some students couldn't go here."

Harvard University tops the nation in endowments with $14.2 billion.

- The Associated Press contributed to this report.