Tuesday, October 30, 2007

The Wisconsin Naming Partnership

This is a brilliant idea:

Alumni Give $85 Million to Name Wisconsin School of Business
The Wisconsin School of Business at the University of Wisconsin-Madison has received an unprecedented gift totaling $85 million from a small group of alumni who have formed the “Wisconsin Naming Partnership” to support the school’s mission.

This innovative partnership provides a naming gift that will preserve the Wisconsin name for at least 20 years. During that time, the school will not be named for a single donor or entity. This unprecedented naming partnership will uphold tradition and greatly enhance the value of the school to students, the campus and the state.

The Wisconsin naming gift is the first of its kind received by a U.S. business school. Conventional business school naming gifts adopt the name of a single donor in perpetuity. By preserving the Wisconsin name for 20 years, this gift leaves open the option of future naming gifts.

UW-Madison Chancellor John D. Wiley calls the gift “a creative act of philanthropy and a major milestone for our university.”

Why would a school want to keep open the opportunity to name itself? The answer seems to be that the price tags for naming business schools are going up faster than just about anything, including the returns to university-managed endowments. Perhaps this is because naming schools is the province of the ultra-rich, who get where they are because they can build wealth faster than conventionally managed funds. So if the school sells the name today and invests the money, it gives up the opportunity to sell the name for a higher current value later on. Wisconsin's solution is to rent the name for 20 years. It allows the school to use a large gift today, without foreclosing the possibility of a much larger naming gift in the future. To really determine how much value it adds, we would have to make assumptions about what the giving behavior of the members of the partnership would have been over that period in the absence of this gift (with or without a conventional naming gift).

The Milwaukee Journal Sentinel reports on it here, including a list of other large gifts to business schools in past years.


Tom said...

Branding? Change your name every 20 years? Nice business school.

Thomas said...

I think you are totally missing the point. The gift here was to keep the University of Wisconsin name on the business school for "at least the next 20 years". The majority of business schools have allowed a single donor to put his or her name on their building or even their entire program for a one-time gift. That name stays forever. UW has said that there is more equity in the Wisconsin brand than any single donor's name, and the gift made here was to prevent private naming for at least 20 more years. I think it's brilliant!