COLUMN: CMU 'a decade behind' in fundraising, development, due to lack of innovation
I am a proud '77 graduate of Central Michigan University. I have readily and happily devoted my time, energy, passion and financial resources to my beloved alma mater, but recent decisions by the university administration have forced me to make a difficult decision. I have resigned from the advancement board after realizing our administration is not capable of leveraging our vast alumni talent to push for university greatness.
My involvement began in 2009 when former CMU President Mike Rao invited me to serve on the development board. While flattered by the invitation, I initially declined, having no interest in serving on a "ceremonial board." President Rao and development director Mike Leto assured me that the board engaged in weighty, substantive endeavors.
Based on my background, a career in worldwide building for a client and partner, Cisco Systems, Inc., and 20 years in law, as a member of the senior leadership with one of California's largest and most profitable firms, I felt confident my background would benefit CMU.
Hoping to make a significant difference, I joined the development board. As someone fully and professionally engaged in idea generation and in challenging conventional thinking — two traits essential for thriving in the Silicon Valley where every day is a cage fight — I have been reminded to my dismay that the entrenched bureaucracy at CMU is not looking for innovative solutions to problems.
Exhibit 1
MAC Universities’ Endowments
- 1.Buffalo $619M
- 2.Ohio U. $550M
- 3.Miami, O $460M
- 4.Toledo $416M
- 5.WMU $330M
- 6.Akron $238M
- 7.Ball State $193M
- 8.CMU $130M*(includes a $32M pension refund “windfall”)
- 9.Kent State $118M
- 10.BGSU $118M
- 11.NIU $71M
- 12.EMU $67M
*source: Wikipedia
Under President George Ross the university has not demonstrated a serious commitment to fundraising, the primary function of its advancement board. Filled with CMU pride, energy and entrepreneurial spirit, I took it upon myself to carefully study our organizational structure and staffing. Exhibit 1 demonstrates how far CMU has fallen behind other MAC schools. We are almost $500 million behind Buffalo and control about one third of Western Michigan University’s endowment.
President Ross made a decision to de-emphasize development when he placed a part-time executive with no fundraising experience atop the organization. We stagnated and wasted critical time. Our modest $130 million endowment ($98 million but for a recent $32 million state pension windfall refund we placed in the fund) is now $146 million behind the MAC average.
Meanwhile, our president and staff resisted every attempt to raise the fundraising bar at CMU, dragging their feet in refusing to adopt a mission statement, sharing our donor lists, giving histories, fundraising staff performance levels, and staff overhead budgets. They also pushed back hard against benchmarking statistics necessary to “measure” how CMU was performing compared to our “peers.”
Our modest endowment struggled to prudently invest its then perhaps $90 million endowment. Our returns were far lower than the top endowments like Harvard, Yale, Stanford and Michigan. I wanted to understand why and by how much? I sought from our own Development staff information about CMU’s historic returns and those of nearby University of Michigan. Information reluctantly provided by CMU’s staff revealed that Michigan was consistently earning a 3 percent higher rate of return than CMU over 10 years (and 35 percent during the two years prior to that.) Likely this was with lower overall risk.
I explored with Gov. Rick Snyder my idea of CMU’s “co-investing” or piggybacking on UM’s investments, to share its substantially higher returns. The Governor loved the idea, so I prepared and circulated a proposal for the idea to be considered by the development board.
Our administration did everything it could to kill the idea. David Burdette, then vice president of finance, characterized the idea as “raising serious legal, moral and ethical concerns” in his effort to cast me as some kind of villain. As a contributing alumnus, I was appalled. The episode benchmarked for me the extraordinary incompetence I was dealing with at CMU in development under our president.
Had we worked a deal through the governor’s office to co-invest in the University of Michigan’s endowment, something we were unwilling to even explore, we might have enjoyed something like an additional $3 to $4 million in annual returns. That’s more than our looming and just announced $20 million deficit. Interestingly, President Ross never disclosed this budgetary problem to his advancement board.
Consequently, I made it my mission to demonstrate the need for CMU to hire an experienced development professional. Last year, our first partial year with our new, experienced Advancement lead, Bob Martin, was CMU’s most successful in its history in raising outside capital. I asked to be placed on the search committee to identify our new advancement lead, the only board member to make that request. Our president declined and never called me about his reasons why.
President Ross’s decision to de-emphasize development has now put CMU a decade behind. His fear of failure made him extremely reluctant to hit the “go” button on our second capital campaign. This delay has cost CMU millions. Higher Education is an arms race. It takes money to stay in the game and even greater resources to reach aspirational goals. Had we encouraged, rather than punished, innovation and idea generation on our board and in our community, who knows what powerful ideas and opportunities we might already have discovered?
President Ross has not been interested in finding out who has what talents on our board. It appears he does not understand how to “partner” with this important function of his own university. CMU doesn’t know how to leverage the enormous talents of its accomplished advancement board — the pantheon of our university’s “stars.” This past week saw a rash of resignations from our board and our most important subcommittee, its investment committee, over our university’s struggle over advancement.
Sadly, I have not heard from President Ross two weeks after my resignation. Nor have the others who have tendered resignations. I have, however, heard from many concerned others.
Todd J. Anson is a California attorney, real estate developer and venture investor and major donor to CMU. He has been recognized professionally by Ernst & Young as “Entrepreneur of the Year” in San Diego, by NAIOP as its “Developer of the Year” and by CMU as a “Distinguished Alumnus” of the College of Science & Technology. He has taught at the Haas School of Business at Berkeley in the MBA program. He is a graduate of Mount Pleasant High School and graduated Summa Cum Laude from CMU in 1977.
