News & Updates
Breaking the Billion Dollar Barrier
Marts & Lundy Partners with Michigan State University in Record-Setting Campaign
Oct. 25, 2007
Michigan State University can boast of a plethora of awards and achievements as one of the country's first state land grant universities—from cutting-edge research in medicine, engineering, and forensic science, to its scenic campus in East Lansing that's home to more than 45,000 undergraduate and graduate students pursuing some 200 areas of study.
And then there's Michigan State's memorable drives to win the 1979 and 2000 NCAA basketball championships.
But for all of its slam dunk successes, as the state-assisted school prepared to launch a capital giving campaign more than eight years ago, its development team knew it was playing catch-up with other Big 10 schools in the fundraising arena.
Others institutions of higher learning, including cross-state rival Michigan, were operating at a higher level of participation and gift-giving. "MSU is the youngest program in the Big 10," explained Marti Heil, associate vice president for university development at Michigan State. "We have not been actively fundraising as long as our sister institutions." It needed to increase its donor base.
With public funding of universities drying up, Michigan State officials knew they needed help to hammer out a more focused, information-based fundraising strategy. They turned to Marts & Lundy and its expertise in "blending the art and science of philanthropy."
They knew they could count on the firm's veteran consulting team, including Roy Muir, co-leader of Marts & Lundy's Higher Education Practice Group. Muir served as MSU's campaign counsel, continuing the university's relationship with Marts & Lundy that started in 1998.
Michigan State gave high marks to Muir and Marts & Lundy after the close of The Campaign for MSU, a record-breaking capital campaign that surpassed the university's expectations with commitments of $1.439 billion. That topped an already-ambitious overall goal of $1.2 billion for the eight-year-long effort.
Gifts from alumni and other individuals made up nearly 50 percent of the total, with a documented cumulative total of nearly $700 million.
"Marts & Lundy has a great reputation," Heil said. "We'd known Roy because he had been my counterpart for 23 years" at the University of Michigan.
The Campaign for MSU illustrates why public universities—facing shortages of state funding—must generate more of their own revenues to remain competitive and affordable.
"Nationally, public universities are experiencing a pretty steady and significant decline in tax-driven support from their states," Muir explained.
Several decades ago, he said, public universities such as MSU received about 75 percent of their general fund revenue from state coffers. "There were cases where that reached 90 percent," Muir said.
That sum has steadily dropped to 50 percent or less today, he said, with some public universities deriving less than 20 percent of general fund revenue from their state governments.
"That's particularly true of Big 10 and Pac 10 institutions—the research institutions," Muir said.
This has led to steep tuition hikes at public universities, he said, which can only be offset by ongoing fundraising.
Heil underscored the importance of MSU's connection with Muir and Marts & Lundy.
"Because of the age of our program, we hadn't built the relationships with those individuals" who were potential donors, she said. Eight years ago, Michigan State University got most of its outside financial support from corporations, foundations, and associations. In 1998, MSU reported about 65 percent of its gifts came from large organizations, recalled Charles H. Webb, MSU's vice president for university development.
For this campaign, the university set out to bring its gift-giving campaign into better balance, with equal participation from individuals and organizations.
"For the first time in MSU history, we took our database and engaged Marts & Lundy's services in ranking all of our alumni" and their ability to give back to the university, Webb said.
Working with public information such as census data, real estate records, and stock trades, the campaign team scoured 450,000 records. "We then did profiles for 3,700 individuals we thought had the greatest capacity to make a gift to MSU," Webb said. "In many cases we didn't know these people; in some cases they were people we did know."
With Muir's help, they completed position papers for potential donors to make the case for supporting an individual college or the university at large.
The individual touch was critical to the infusion of new cash into MSU's endowment. "We went and met with each one of them," Webb said. "Over 60 percent made a donation."
On Muir's advice, the university made sure to bring in MSU's academic leadership.
"We had 100 percent of the deans at the table," Heil said. "It was clearly a campus-wide event, and our deans felt very much engaged and felt part of the decisions."
Gifts of more than $1 million also surged, with 218 secured during the campaign—an amount that nearly doubled the 118 received during the previous 50 years.
The campaign also solidified future support: the number of planned gifts has soared in number and value, with 1,650 planned gifts documented at a value of $346.6 million in future support.
Another major achievement of the campaign is the creation of 1,575 new endowments, with a value of $476 million. This total includes nearly 100 new endowments in support of chairs and more than 1,000 new endowments to support undergraduate scholarships, graduate fellowships and other student-related funds.
Muir and Marts & Lundy continue to work with MSU on its post-campaign strategy and on planning for the next capital campaign. Webb said the university looks forward to continuing its productive partnership with Marts & Lundy, whose "good counsel" helped the university find "the right direction and strategy."