A tour of the Humanities Building underscored the need for a new academic facility for the College of Letters & Science. Bryce Richter

In July, Wisconsin governor Tony Evers ’73, MS’76, PhD’86 signed the 2021–23 state budget with dozens of line-item vetoes, capping a months-long process that saw the legislature scrap his original proposal and craft its own. UW–Madison emerged from the process with several important wins, including new funds for a critical campus building.

As part of the budget bill drafted by the Republican-led legislature and signed by the Democratic governor, the UW System Board of Regents regained its authority to set tuition rates for in-state undergrads. That ends an eight-year mandated tuition freeze at UW–Madison.

The budget also provides 2 percent pay increases for university and state workers in each of the next two years, plus $2 million for the UW’s Division of Extension to hire additional agricultural specialists.

Last spring, university leaders invited state politicians to tour a campus artifact with structural challenges: the Humanities Building (pictured above). The effort underscored the need for a new academic facility for the College of Letters & Science. The final budget obliged, covering roughly 70 percent of the projected $88 million cost. The new building, planned for the corner of West Johnson and North Park Streets, will feature 19 modern classrooms and consolidate departments and programs from seven campus locations.

“This new academic building will modernize the student learning experience and build research connections across campus, better serving the needs of our growing undergraduate population,” said Eric Wilcots, the college’s dean.

High on the list for UW–Madison was funding for a new engineering building that would enable the university to increase enrollment in the in-demand field by nearly a quarter. While funding for the building was not included in the final budget passed by the legislature, the budget does fund a major utility project on Engineering Drive, which signals future support for constructing the facility.

“We begin the new fiscal year with a solid budget that invests in our valued employees and provides funding for important new building projects,” said Chancellor Rebecca Blank.

Chancellor Rebecca Blanks says that “investment in higher education is key to boosting our economy, even in difficult times.” Bryce Richter

If the coming state budget includes what UW–Madison hopes for, it will mean important changes, both visible and invisible. University leaders and the UW System Board of Regents have proposed new buildings for the Colleges of Engineering and Letters & Science, as well as greater borrowing power.

In particular, UW–Madison would like to have bonding authority for capital projects and for program-related revenue, such as the funds brought in through residence hall fees, athletics, and parking fees.

“The UW is the only Big Ten school without bonding authority,” says Ben Miller, a senior assistant in the office of UW–Madison’s vice chancellor for university relations. “We believe the university should be able to borrow to cover operational expenses, particularly for those programs that generate revenue to cover their costs.”

The two building projects are also major initiatives. The College of Engineering would like to replace the building at 1410 Engineering Drive. A new structure would enable the college to teach an additional 1,000 undergraduate students, which would help the UW meet America’s growing need for engineers and others who work in STEM fields.

The College of Letters & Science hopes to replace the Mosse Humanities Building, which has been home to many arts and humanities programs since it opened in the 1960s.

The building has long suffered from structural and materials flaws. Music and arts programs left Humanities in recent years — to the Hamel Music Center and the Art Lofts, respectively — and a new academic building will better serve the remaining humanities departments.

In addition, the UW is seeking funds to increase online learning opportunities, provide more health services to students, increase student financial support, and add agriculture positions to UW Extension. Chancellor Rebecca Blank described the requests as “a modest proposal that recognizes that investment in higher education is key to boosting our economy, even in difficult times.”

The regents sent their request to the office of Wisconsin governor Tony Evers ’73, MS’76, PhD’86, in hopes that he would include the initiatives in his budget proposal, which is expected in February. That proposal would then go to the Wisconsin legislature’s joint finance committee.

“We’re hopeful to see our goals achieved,” says Miller, acknowledging that the coronavirus pandemic has left the state with a weakened economy and that the UW is one of many priorities. “We’ll have to build awareness and educate lawmakers [on the need for these projects]. They’re all important proposals for campus.”

Blank outlined several key goals and investments for the university. One is to build on educational outcomes by offering greater flexibility for students. An increase in online courses is helping students meet credit requirements while they’re studying abroad or doing an internship. The UW is exploring all-online degree programs for nontraditional students, with the hope of developing at least one undergraduate program by 2020. It’s expanding early-start programs, which allow incoming freshmen to earn credits during the summer, and rolling out gap-year programs, which will accommodate those who earn admission but wish to delay full enrollment so they can travel, work, or volunteer.

A second priority is accessibility. The UW established Bucky’s Tuition Promise last year to reduce the financial burden on low- and middle-income families. Four years of tuition is now covered for any incoming Wisconsin student whose family’s household income is below the state median of $58,000. Noting that the university has tripled its investment in scholarships over the past 10 years, Blank said that it still faces shrinking state and federal aid. “I want every student who can qualify for admission to UW–Madison to be able to afford to come,” she said.

Blank identified research as an area of concern, with the UW’s expenditures lagging behind its peers over the past decade. Despite an 11 percent increase in research dollars during the past two years, the UW has dropped to sixth in national research expenditures, following decades among the top five universities. To address the trend, the UW is increasing stipends to attract top graduate students and establishing industry partnerships with the likes of GE Healthcare, Johnson Controls, and Foxconn.

Above all, the quality of the university “rests on its faculty,” Blank said. A cluster-hire program, which recruits cross-disciplinary faculty members with aligned interest in high-demand research areas, will hire more than 50 faculty members over five years. Another program is giving departments new tools and financial support to recruit faculty members from underrepresented groups in their respective fields. The biggest barrier remains the lack of competitive pay. “We’re number 14 of the 14 Big Ten schools,” Blank said, noting that UW professors earn, on average, 10.4 percent less than those at peer institutions. “That does not reflect our reputation and our strength.”

All of these key areas, Blank said, require reinvestment from the university as well as a renewed commitment by the state. She concluded by quoting former U.S. Senator Daniel Patrick Moynihan: “If you want to create a great city” — and a great state, she added — “first create a great university, and then wait 100 years.”

Expansion of the School of Veterinary Medicine, the only veterinary school in Wisconsin, will allow it to serve more farmers and pet owners across the state. The current hospital was built to accommodate 12,000 patients a year; in 2016, it served 26,500. Flad Architects

The only certainty is uncertainty with a divided government, and so it goes for UW–Madison’s 2019–21 biennial budget request.

Last August, the UW Board of Regents approved an operating budget request of $107.5 million in new state funding for the UW System to support high-demand academic programs, with much of the funding tied to performance metrics.

The regents also approved a $1.9 billion capital budget recommendation (spanning the next two budgets) for the maintenance, renovation, or replacement of campus buildings, including a $90 million addition to the current UW–Madison School of Veterinary Medicine, which opened in 1983.

“With continued investment from the state, UW–Madison will remain a world-class university in education, health, and research that changes lives and powers Wisconsin’s economy,” Chancellor Rebecca Blank said at the time.

Newly sworn-in Wisconsin Governor Tony Evers ’73, MS’76, PhD’86, formerly the state schools superintendent, is expected to release his budget proposal in February or March. (It was not available at press time.) The negotiation process between Evers, a Democrat, and the Republican-led legislature could continue through the summer. The budget bill must be passed by the state assembly and senate before returning to the governor to be signed into law.

During his campaign, Evers signaled stronger financial support for the UW System, including funding to fully offset the ongoing in-state tuition freeze that was enacted under former Governor Scott Walker in 2013. The system received a $36 million increase in the current budget, following a substantial $250 million cut in 2015. To help generate revenue, UW–Madison has increased tuition for out-of-state students and professional degree programs over the past four years.

“We talked about how what’s best for our kids is what’s best for our state,” Evers said in his inauguration address. “And that means we need to fully fund our public schools at every level … from all-day pre-K to our university and technical college systems.”

Billboards placed around the state that tout the contributions of UW alumni are part of an unprecedented effort ahead of the next state budget. Vincent Lyles ’84, JD’87 oversees the Boys & Girls Clubs of Greater Milwaukee’s more than 800 employees and nearly 600 volunteers. Background Image ISTOCK/Photo Illustration

Five of the last six state budgets cut funding to the University of Wisconsin System, so Chancellor Rebecca Blank has a simple message for alumni and legislators this time around: it’s time to reinvest in the UW.

At a campus forum this fall, Blank told faculty, staff, and students that the cuts threaten the quality of the state’s flagship university. As some top faculty and staff depart, its reputation suffers.

Wisconsin is one of just nine states that have reduced support for higher education over the last two years. Thirty-nine states increased funds to colleges and universities. And, Blank noted, the UW’s peers are investing in new programs and research centers.

“My biggest challenge as chancellor is to first make sure this university can find a way to stabilize its finances so we aren’t constantly facing budget crises every two years of the sort we’ve seen this biennium,” Blank said. “But, second, I need to do better than that. I can’t just stop the cuts; we need to get ahead. I have to find the funds that help us reinvest in the university.”

Blank supports a board of regents request for $42.5 million in new funding to train students in Wisconsin’s most high-demand fields, such as computer science, business, nursing, and engineering. The proposal also emphasizes career initiatives, funding for building maintenance and renovation, and operational flexibilities.

That investment would be welcome news to professors who have seen some colleagues take positions at other colleges and universities. In a recent column in the Milwaukee Journal Sentinel, geography professor Jack Williams explained why he explored a job at another university — which offered better pay and more time to pursue research — and why he decided to stay.

“UW–Madison and the state universities are one of the great achievements of our country,” he wrote. “In this accelerating world, our mission of world-class research and education is ever more important. I’ve stayed to serve this state, and I remain hopeful that the state will return to supporting its great university.”

UW–Madison receives funding through five main channels: federal revenue, state revenue, gifts from donors and nonfederal grants, student tuition and fees, and revenue from auxiliary operations, such as University Housing and the Wisconsin Union. The state share, which used to be the largest source of UW funding, is now the smallest of those five, at just under 15 percent. Blank noted that state funds remain vital to the UW’s teaching, research, and outreach missions because they leverage funds from the federal government and other sources.

Wisconsin Governor Scott Walker is expected to deliver his budget proposal to the legislature early next year. He has indicated that there could be new funding for the UW System tied to certain performance measures, such as graduation rates and job placement.

During the last year, Blank has traveled across the state, meeting with legislators and business leaders and sharing the message that the UW is an economic engine for Wisconsin. A new ad campaign using private funds employs a variety of media, including billboards, to reinforce that theme by highlighting the contributions of UW–Madison alumni in each of the state’s 72 counties.

From a social worker in Grant County to a cranberry grower in Wood County to a language teacher in Menominee County, the stories are designed to demonstrate the influence of UW alumni on their Wisconsin communities.

“We won’t just be making our case to legislators,” Blank says. “We’ll go directly to the people of the state in new and creative ways. We can’t take for granted that everyone is aware of all of the ways in which this university and its alums are involved in communities across the state.”

Illustration: Danielle Lawry; Source: UW–Madison Facilities Planning and Management

After World War II, American universities experienced a building boom to handle the flood of incoming students. At UW–Madison, more than 40 percent of campus buildings were constructed in the 1950s, ’60s, or ’70s.

But volume meant speedy construction, producing structures that haven’t stood the test of time and now need attention.

That’s what William Elvey had to worry about — a lot — as UW–Madison’s associate vice chancellor for Facilities Planning and Management. He likens the university’s backlog of deferred maintenance to what happens when a snowball rolls down a hill: it gets bigger. “It keeps me awake at night,” he said before leaving the UW to work for Children’s Health System of Texas.

The UW’s current deferred maintenance costs are estimated at $1.2 billion and continue to grow. Unlike previous state budgets, the most recent budget didn’t provide $20 million a year in borrowing to cover the costs of capital projects that typically cost more than $50,000, such as replacing roofs, and less expensive maintenance work, such as roof patching.

“[The Humanities Building] is the poster child for deferred maintenance,” Elvey says. The concrete exterior of the 1960s-era building is in poor condition and has exposed rebar. Elvey says it reminds him of the Tom Hanks movie The Money Pit, about an unending home renovation project.

Over the summer, university officials elected to transfer nearly $2 million from academic and research funds to cover repairs to the exterior and roof of the Humanities Building and 23 other projects that were critical to safety, including fire escapes.

For the next two-year budget, UW System officials have requested $100 million to restore the money campuses received in the past for repair and maintenance projects.

Chancellor Rebecca Blank says that all parts of the campus will feel the pain of state budget cuts, and the reductions will likely affect how long it takes students to complete their degrees.

For UW–Madison, the hits just keep coming.

The latest is a $250 million cut to the UW System, matching the largest state budget cut in the university’s history and the sixth major cut in the last seven budget cycles. The result: UW–Madison, the largest UW System campus, is getting $58.9 million less in state funding this fiscal year, despite intense lobbying from university officials and alumni. State lawmakers also slashed $5 million from specific UW programs, such as the Wisconsin Bioenergy Initiative.

“It is clear that continuing to diminish state support for higher education in Wisconsin does nothing but diminish the UW System,” Chancellor Rebecca Blank said when the budget numbers became public this summer.

Blank prepared the campus for the cuts before the Wisconsin legislature completed its work on the budget bill in July, announcing that schools and colleges would address a $23 million cut from last year by eliminating more than 400 positions, including 70 layoffs. Another $9 million will come from administrative units, the athletic department will chip in $7 million to help, and the university will tap its dwindling reserves for another $10 million.

UW–Madison will close and merge some programs, decrease the number of classes by several hundred, and reduce advising services offered during the next two years. There will be fewer support services — such as information technology — for students, faculty, and staff, and the university will spend less to maintain buildings and facilities.

The UW System Board of Regents approved a plan to raise tuition by $3,000 each of the next two years for nonresident undergrads at UW–Madison, which will generate an additional $17 million. Tuition will also go up for graduate and professional schools. The budget bill also removes tenure for professors from state statute and puts it under the control of the regents, giving them more power to lay off faculty and staff. Blank says there won’t be any changes in the way the university operates. UW campuses have broad authority to establish tenure protections, according to UW System officials. At UW–Madison, a new committee is working this fall to establish policies mirroring tenure provisions that were previously included in state law.

“As with any university, our reputation depends on the quality of our faculty,” Blank says. “Unfortunately, the inclusion of this language has created negative, often inaccurate, national publicity that will hinder the ability of UW–Madison to attract and retain the best faculty and staff. We are doing all we can to combat that, and I have said unambiguously to the deans that we are prepared to counter outside offers and aggressively fight raiding efforts.”

Blank is focused on continuing to convey the UW’s value to the state to prevent another budget cut two years down the road.

State legislators have kept a close watch on the UW System’s finances since last year, when they accused officials of not clearly disclosing how much money they were keeping in reserve funds.

Although much of the $1 billion in reserves was already committed to specific expenses and tied to particular gifts, grants, and federal aid, state officials and others were angered that the UW Board of Regents raised tuition for students the last several years when it had cash on hand.

Last year, the legislature enacted a two-year tuition freeze, which continues in effect for undergraduate and graduate students for the coming academic year. Governor Scott Walker, who is up for re-election in November, has pledged to keep the freeze in place in his next budget.

The budget plan the regents approved this spring includes the freeze, but it also raises student fees and the cost of room and board. Students at the System’s thirteen four-year campuses, including Madison, have to pay an average of $39 more in fees, $115 more for housing, and $63 more for meal plans.

In the meantime, UW campuses are continuing to shrink balances in their reserve funds. Within a year, just 3.3 percent of the UW System’s $6 billion budget will be in cash reserves not designated for particular expenses. That’s low compared to institutions of similar size, but UW officials have viewed it as a necessary move to help repair relationships with the public and the legislature.

UW–Madison Chancellor Rebecca Blank has cautioned that it is reasonable for a large university to keep some amount of capital in reserve. “Such balances are a safeguard against revenue fluctuations caused by enrollment shifts or state budget cuts,” Blank wrote on her blog last year. “Keeping some funds in reserve is also a prudent practice to cover sudden cost increases for obligations like utilities or fringe benefits or as contingency for emergencies.”

UW–Madison entered the biennial state budget process earlier this year on solid footing. Wisconsin Governor Scott Walker included $89 million in new funding for the UW System in the proposal he sent to the state legislature in February.

Interim Chancellor David Ward MS’62, PhD’63 called it “the best budget we have seen in many cycles.”

By summer, things went from best to worst.

Lawmakers were outraged to learn the UW System had cash balances totaling $648 million, accusing university officials of mishandling taxpayer money and falsely inflating the financial stress on the System. Of that total, $298 million was ascribed to UW-Madison. Ward countered that this sum — less than 25 percent of the university’s annual budget — was relatively small compared to other peer institutions, and that most of the funds were already committed to projects across the campus.

In response, Walker unveiled — and legislators passed — a revised, bleaker version of the UW System budget. It removed the new money, froze tuition for two years, and also delayed for two years a plan that was to give UW–Madison more autonomy and flexibility in how it classifies, recruits, pays, and evaluates its twenty-one thousand employees. Walker signed the budget June 30.

Finances aside, one of the biggest challenges facing UW- Madison and its new chancellor, Rebecca Blank, is the damage done to its already fractured relationship with state lawmakers.

“The state provides only 15 percent of our support at this point, and it wasn’t very long ago that it was greater than 50 percent,” Blank said when she first arrived on campus this summer. “I want to make sure that our message gets out to the citizens of Wisconsin, of what the value of this university is as an educational institution and as a place of innovation.”

Can you hear me now? Kate Koberle, a floor manager for the UW Foundation’s Telefund program, gets an earful from Abe. Photo: Bryce Richter

Hoping to double alumni donations, the UW prepares to roll out an aggressive campaign. The key lies in getting to know you.

Why do so many of you fear Kate Koberle x’13?

She’s not a bad person. Underneath her Zooey Deschanel bangs are a sunny disposition and serious work ethic that make her the sort of daughter any UW alum would wish for. She studies landscape architecture. She aspires to run a marathon. And she’s doing her best to pay her way through school — or at least as much as anyone can in these days of $5,000-per-semester in-state tuition.

“My parents are paying for my room and board, which is great,” she says, “and they’re paying for all my food. But I’m paying for my tuition and my textbooks.”

That’s where the fear comes in — or if not fear, at least avoidance. Koberle works part-time for the University of Wisconsin Foundation (UWF), where she’s a floor manager for Telefund, the program that employs about a hundred students to call alumni — and parents of current students, and others — to solicit donations to support the university. For many grads, Telefund is all they know of UWF: a voice at the other end of a telephone line, asking for money. But last year, better than nine out of every ten of you tried not to have any contact with Koberle and her colleagues, or anyone else from the foundation.

That’s a matter of concern for the university. Telefund is one of the main sources of revenue for the annual fund, which is the pool of money that the foundation gives to UW-Madison each year to spend on whatever the university sees as its areas of greatest immediate importance: need-based scholarships, building maintenance, library improvements — the sorts of things the UW absolutely has to take care of, but that big donors seldom consider very sexy.

Last year nearly 38,000 UW alumni donated to the university’s educational mission — that is, leaving aside gifts to the athletic department. They contributed some $4 million, about half of which came through Telefund. To Mike Knetter, UWF’s president and CEO, those numbers are far too small.

When Knetter took over leadership of the Foundation in 2010, he found an organization with some $2.6 billion in assets. But that’s not cash. Most of it is in the UWF’s endowment, meaning that it’s intended to exist as a permanent investment. Binding contracts specify that the university can receive only a small amount, typically less than 8 percent, in any given year. Further, the vast majority of those assets — more than 93 percent — are restricted, meaning that the university can spend those dollars only for specific purposes designated by the donors, regardless of what campus might want or need.

Once upon a time, this worked out well. The university could depend on the state to pay its core expenses, while donations from alumni acted as what Knetter calls a “margin of excellence” — the additional dollars that would elevate basic education and research to world-class status. But state support has dropped from 35.3 percent of the UW’s budget in 1989 to 26 percent in 1999 to 17.6 percent in 2011.

“The traditional thing,” says Knetter, “is for state and tuition dollars to pay for the core budget, and [we’d say] that philanthropy … is the icing on the cake. But now it’s got to be part of the cake, as well, if we’re going to maintain the university in the way that we’ve come to expect it.”

Knetter believes the future of the university is tied to the health of the annual fund. This fall, UW-Madison is launching a campaign to double that fund’s donations, both in dollars and in the number of alumni who make gifts. To make this campaign work, however, the UW will have to understand why it is that so many of you avoid Kate Koberle.

The State of the UW

If you haven’t yet heard about UW–Madison’s new annual fund campaign, you will — and you’ll hear about it a lot.

Called Share the Wonderful, it will be a saturation effort. From now until November, you’ll see ads on television, online, in your mailbox, and in publications (including On Wisconsin). The effort is necessary, because the UW’s goals are aggressive:

• To receive gifts or pledges from between 40,000 and 60,000 alumni.
• To bring in $8 million to the annual funds of UW–Madison and its various constituent schools, colleges, and departments.
• To add a further $3 million to need-based aid programs for students.

The campaign will require UW- Madison to change its fundraising culture. In the past, it has focused on courting wealthy alumni to give large gifts aimed at specific purposes — restricted gifts, in the language of philanthropy. Knetter is stressing to UWF staff that they have to encourage unrestricted gifts, even if they’re smaller, and be prepared to justify what unrestricted dollars can do.

“I’ll meet donors occasionally [and] talk about the importance of less-restricted gifts,” he says, “and they’ll say, ‘Well, you know, I tried to make an unrestricted gift one time, and your staff got me to restrict it.’ In a way, it’s easier to steward a very restricted gift, because you can report out on exactly what that gift did.”

A switch to emphasizing unrestricted gifts will enable the university to think more strategically about how it spends money. But it will also require the university to think more strategically about how it raises money — another cultural shift.

Rather than sending out a large number of solicitations throughout the year, “this campaign will run like the United Way, perhaps just for two months,” says UW interim chancellor David Ward MS’62, PhD’63. “Everybody else would agree not to solicit during that period, so that you would have two months in which the solicitation would be unambiguously focused on large-scale, university-wide fundraising.”

That will mean that all the various campus entities — UWF, schools and colleges, the alumni association, the Union — will have to set aside their own mailings and their independent goals and let the annual fund take center stage.

“We’ll have to work in concert more than ever,” says Paula Bonner MS’78, president and CEO of the Wisconsin Alumni Association. “We’ve come to a point where we can’t focus so much on this individual project or that individual department. We’ve got to get the whole campus community to speak with a single voice, to tell our grads what it will take to keep the UW a world-class university.”

It’s a change that Knetter believes is overdue.

“We’ve been telling the story so long that philanthropy is the margin of excellence, that it’s the state’s job to [pay basic costs],” he says. “It was a nice way to sell philanthropy in those early days. Unfortunately, those days changed.”

Slipping State Support
In recent decades, state tax dollars have steadily become a smaller share of UW–Madison’s budget, dropping from 35.4 percent in 1989 to 17.6 percent in 2011. Only 10.3 percent of UW–Madison’s budget in 2011 came from general-purpose — that is, unrestricted — state funds.

The State of the State

The state isn’t likely to return to the early days and pay a higher share of the UW’s budget. It has too many other obligations, and there remains a disconnect between what the UW is doing and how citizens view the UW. To understand why the legislature doesn’t make funding the university a higher priority, one only need listen to voters. And no one has listened more closely to Wisconsin voters than Kathy Cramer Walsh ’94.

A UW professor of political science, Walsh has spent the last several years conducting research by sitting in on conversations in coffee shops, diners, and gas stations around the state, to understand how people talk about different political issues.

“There are certain places in every community where people get together to shoot the breeze,” she says. “And everybody knows that if you want the local news, that’s where you go to get it.”

These conversations have provided material for several research articles, including a working paper posted online in spring, for which Walsh asked her local pundits what they thought of UW–Madison. What she found was that outside of Madison and Milwaukee — in “outstate” Wisconsin — some people feel an emotional, political, and economic distance from the university. While they consider it an excellent educational and research institution, they think that it’s inattentive to the concerns of those who live outside of Dane County.

But the sense of distance, she believes, springs from Wisconsinites’ affection for their state university. “Especially with respect to the University of Wisconsin-Madison,” she says, “there’s a very profound fondness toward this place. It’s as though they feel so positive about it and feel as though it is their institution, that they want people on campus to listen more to their concerns. Because they care about it, they have strong feelings about it.”

Among those feelings was that the UW receives more than enough public funding already — and that it doesn’t do enough to give the state a return on its investment.

“It’s not surprising in many ways,” Walsh says. “This is a very privileged institution, just in general, [as well as] in comparison to the lives that many people in Wisconsin live. When you’re part of a place like that, you’re often blind to the people beyond it and blind to the ways in which [they] expect a lot of you because you are privileged.”

The university isn’t simply holding out its hand, waiting for new funds to fall its way. To achieve what the university envisions for the future, the campus is spending time looking seriously at its own operations and working from within to identify solutions to its funding challenges.

“Securing our position in the world for the future will not happen by doing things the way they have always been done,” Ward says. “We have to do things differently, because there’s no way we can continue on the same path. Too much is changing around us, so we must change ourselves.”

A trio of campuswide efforts is driving the university to become more nimble and creative, while at the same time strengthening its status as a leading research institution and educational innovation incubator.

An effort aimed at enhancing student learning will also improve the university’s capacity and identify new revenue sources. Ward is encouraging the academic community to explore how best to leverage online technology in instruction, which will lead to more courses being delivered by a blend of remote and face-to-face delivery — what’s called “blended learning.”

“Elements of courses will be conducted over the Internet, but a student’s experience will still be anchored in this physical place, which we know is so very important to our students,” Ward says. “We can diversify the timing, flexibility, and format of the learning experiences we offer by using technology wisely, and we are exploring new configurations of disciplines, departments, and curricula in response to changes in the discovery and integration of new knowledge.”

This effort, along with a second one aimed at achieving administrative excellence by enhancing efficiency, effectiveness, and flexibility, are approaches to help bridge the growing revenue gap.

A third initiative, called HR Design, is intended to give UW–Madison the tools to attract, develop, and retain the exceptional and diverse talent it needs to maintain its reputation.

“All three efforts leverage our culture of collaboration, innovation, and responsibility, and are helping us develop a comprehensive approach to best using our resources,” Ward says. “By preserving and enhancing the university’s reputation, we can define our own vision for higher education in a new era of greater self-sufficiency.”

And yet there remains a difference of opinion between the university and the state over the level of tax support UW–Madison deserves, a difference that has only grown with economic changes during the last few decades.

“Financially, the sixties and seventies were a pretty good period for the state of Wisconsin, because it was a pretty good period for manufacturing and agriculture as competitive strengths for the American economy,” Knetter says. “That really started to shift with globalization and then the information technology revolution. Growth has shifted much more to the coasts and the Sunbelt, [and] the tax base, particularly in states in the upper Midwest, has just been beaten up. That’s created some major problems for public universities, because the tax base for funding our traditional mission just isn’t going to be there.”

Slow growth in the state’s tax base means that the university must increasingly rely on voluntary gifts from those who’ve received the most direct benefit from the UW: its graduates.

“Shame on us if we ever denigrate the investment that the state and taxpayers have made,” Knetter says. “That would be ridiculous, because they’ve built a university that’s way out of proportion to the resources of the state, by anyone’s accounting. And now, if we [alumni] are not willing to sustain it, that’s our problem.”

The State of Alumni

Nobody knows how to talk to UW-Madison alumni like Kate Koberle and her colleagues do.

Six nights a week, the Telefund room at the UWF building buzzes with activity. From 5:30 to 9:00, as many as forty students sit in rows at computer screens, working the phones, while three managers walk the floor, offering advice and encouragement.

“The role as a floor manager is to monitor phone calls and see how [callers] are doing and provide feedback,” Koberle says. “You want to make sure that they are going through their calls as they should be and not giving up.”

To go through the call means that students have to follow “the ladder,” the amount of money that the foundation hopes each call will generate. It’s called the ladder because it starts high and works downward, step by step, until the caller finds a figure that the prospective donor agrees to.

“In every call, you absolutely have to stick to the ladder,” Koberle says.

But the floor managers also give tips on how to talk to alumni, the basic lore that’s passed down across the generations of Telefund students: be real, be relatable, be positive.

“I talk [with alumni] about their experiences on campus and how maybe things have changed, but also about things that we have in common,” she says. “I ask how well they got to know their professors or if they had any favorite classes and stuff like that, and sometimes I actually find overlap in classes that I’m taking now. [You want them to] know they’re not just talking to their standard telemarketer, but they’re actually talking to a real person who’s actually studying at the University of Wisconsin.”

When calling alumni who’ve donated before, they can expect big returns — often a pledge rate of 80 percent or better. But when talking to alumni who haven’t previously donated, the level of success drops off significantly. “I think it’s typically a 5 to 8 percent pledge rate,” she says. And that’s among just the few dozen alumni they speak with during a night when they may dial hundreds of numbers.

It’s this resistance that Knetter wants to change. He first came to Madison as the dean of the School of Business, after graduating from Stanford and serving on the faculty at Dartmouth’s Tuck School of Business. He found himself surprised by the UW’s philanthropic record, both with its successes and its shortcomings.

“The Tuck School of Business is a pretty good fundraising machine, actually, even among business schools,” he says. “I think [the Wisconsin School of Business’s] endowment value was at about 70 percent of what the Tuck School’s endowment was, which I was pretty impressed by. But then our annual giving was only about 14 percent [of Tuck’s]. So clearly we’d done well in getting these endowment gifts, but not very well in developing a tradition of annual giving.”

A similar split applies to the university as a whole. In 2005, UWF had the forty-ninth largest endowment among American universities. By 2011, it had risen to thirty-fourth. But unrestricted annual giving has been stagnant.

“Some universities have very strong loyalty giving, and they’re trying to get to where we are in terms of their major giving piece,” says Alisa Robertson ’94, MBA’03, Knetter’s chief of staff and marketing. She defines major giving as those headline-setting, million-dollar bequests — typically once-in-a-lifetime gifts that go for a very specific purpose: Herb Kohl ’56 offering $25 million for the Kohl Center, or Jerome ’48 and Simona Chazen donating $25 million for the UW’s Chazen Museum of Art. Loyalty giving, however, refers to the donations a person makes to an organization every year — smaller gifts, generally, but with few restrictions.

“We have been able to build a major-gift operation without having that loyalty piece, which is a little weird, because you’d think you’d have to have loyalty to get to that other piece,” Robertson says.

To illustrate the difficulty in establishing loyalty giving, note that some 65,000 grads have never given a cent to the UW. To try to find out why so many alumni are reluctant to give, and how best to convince them to change their minds, the foundation commissioned a study by the A.C. Nielsen Center for Marketing Research at the School of Business. The center’s director, Professor Neeraj Arora MS’98, PhD’00, gave the project as an assignment to four of his students from the MBA class of 2013: Matt Johnson, Valerie Kuts, Kevin Sisco, and Cally Thornton.

The group had callers from Telefund survey nearly a thousand alumni who’ve never donated, seeking to learn why graduates choose not to give to the UW and what might change their minds. The survey presented a series of statements and asked how persuasive they would be in opening the respondents’ checkbooks:

• “When you donate to the UW, you can choose the school, department, or program that receives your money.”
• “Support from alumni like you allows faculty to conduct research that has an impact on the world.”
• “State funding per student at UW–Madison has dropped by 9.3 percent in the past decade.”
• “Your gift of $11 buys a required textbook for a student in need.”

The Nielsen students used demographic data to divide the alumni into a variety of segments. But to their surprise, they found that responses tracked in a similar way across all the groups. Irrespective of age, sex, region, or financial status, most alumni feel proud of their connection with the UW. They’d be more inclined to give to the university if they felt that it would enhance its reputation and strength. They’d like to see their gifts go to help the programs they choose, and to make new discoveries, particularly in medicine.

Conversely, they’re less sympathetic to arguments based on repairing a shortfall due to state budget cuts. They aren’t impressed that alumni from other eras donate more than they do, or that alumni from other universities give at a higher rate than Badgers do.

“We thought that there would be much bigger differences in how people responded to the messaging,” says Thornton. “We had tested thirteen different messages, and what was very surprising to us was that the ranking of the messages came out very consistently the same. No matter how we broke it down, [alumni] responded to the messaging in the exact similar way.”

Stating the Case

For UW–Madison, this is mixed news. On the one hand, it means that a campaign that reaches out to alumni doesn’t need to have an elaborate marketing strategy. If alumni across all regions, ages, and economic strata react the same way to messages about the UW, then there’s little need to break down the alumni population into segments and go after it piecemeal.

But the other side of the argument is this: if there’s not a striking insight into how to inspire alumni to give, then how will the foundation manage the dramatic increase that Knetter believes is necessary?

And his goals are aggressive. The $11 million total for this year is just the first stage in a journey toward hitting $20 million annually by 2016. The foundation will aim for these goals in spite of a sluggish national economy — and partially because of it. The recession that hit in 2008 damaged the university’s bank account — UWF’s total assets under management have yet to return to the nearly $2.9 billion it had five years ago. But college graduates have managed to ride out the recession better than those without degrees.

“We have to educate our alumni to think about contributing more than just that margin of excellence,” Knetter says. “And frankly, we think that the benefits that they derive from their experience here are worth that. It’s on us to make the case that that’s the day we’ve come to.”

But communicating will mean more than just telling alumni what the UW wants and needs. It will also require telling alumni what the UW is doing with those donations.

“We need to show greater clarity on the part of the university about its strategic objectives, and the role we need philanthropy to play in achieving them,” Knetter says.

If the UW gets better at communicating with alumni about its financial health, it may be able to better communicate with all of its stakeholders — the members of the state government, businesses, and the citizens of Wisconsin. And if the university is successful, it will make Kate Koberle seem less scary to you, which, really, is all she wants out of her work.

“It’s very, very fulfilling,” she says, “getting to work with alumni and do good things for the UW. I feel like I’m really doing good.”

John Allen is senior editor for On Wisconsin.