Series: Turning to business for 'U' needs

By Stephanie Steinberg, Daily Staff Reporter
and Kyle Swanson, Daily News Editor
Published October 7, 2009

Working in laboratories and offices across the University, professors and researchers typically have more ideas than they know what to do with — whether it’s exploring advanced batteries that could help make widespread use of electric cars a reality, curing life-threatening diseases in developing countries or studying how psychological factors influence an individual’s decision to seek financial help.

While discoveries cannot be made without dedicated researchers who spend hours conducting experiments and studies, researchers cannot do their work without proper financial backing.

But with shrinking state appropriations and students upset over tuition hikes, private support has become increasingly important for funding research at the University.

Though federal stimulus funds may help fill the funding gap right now, development officers at the University work to establish long-term relationships with foundations and corporations whose financial support helps maintain fruitful and stable research at the University.

“They’re perhaps a little less interested in the cornucopia of ideas that might exist at the University,” Jefferson Porter, associate vice president for development, said. “They’re really looking for that one thing that’s going to help them solve the problem that they’re trying to solve.”

Foundations

Foundations are nonprofit organizations that use financial and sometimes other resources to advance one or more charitable purposes. Unlike fundraising from individuals, the University’s Development Office takes a very different approach to securing funding from foundations.

Maureen Martin, senior director of Foundation Relations, explained that foundations are often more motivated to give based on project funding proposals assembled by the foundation relations staff than on the relationship building that other operations may use.

“Professional foundations tend to have a bunch of staff who are domain experts, who can help the foundation make decisions about whether something really does move this social change forward or not,” Martin said. “In professional foundations, then, the University is always making tons of proposals.”

However, proposals must be created with demonstrated benefits for both the University and the foundation from whom money is being sought. Fortunately, because foundations publicly disclose the amount of money they’ve given for different projects, Martin said she is easily able to track down information.

“Foundation information is all public information, so my job is much easier than someone who fundraises in individual giving or in corporate giving,” Martin said. “I can know every grant they gave away last year … I can know how their portfolio is doing.”

Foundations also typically like to fund programs that will be sustainable or will have lasting implications on whatever issue is being addressed. This can be one of the more challenging parts for development officers to demonstrate, since oftentimes research proposals cannot guarantee beneficial results or findings.

“In community-based public health, you can’t say you’re going to solve those problems in three years, but what you can say is that you are not only working with the community organization to build the capacity to solve the problem, but you’re also training the next generation of leaders who will be community organizers, community activists, public health workers,” Martin said.

To increase the University's chances of receiving money from foundations, Martin said she often works with faculty members to determine which foundations would be most likely to fund specific research projects.

During the 2009 fiscal year, the Foundation Relations division of the Office of Development raised approximately $45.4 million from foundations. On average, gifts were just over $100,000 and each foundation that gave to the University averaged about $267,000 in total donations during the year.

Many foundations issue requests for proposals in which they seek applications to fund programs meeting specific criteria, but Martin said most of the foundations that she works with handle funding requests on a rolling cycle — meaning the University can simply submit a proposal for a project at any time during the year.

Martin said that although many foundations give to the University on a somewhat regular basis, other foundations give sporadically.

“At a significant level — donors who give a total of maybe more than $1 million a year — it’s generally going to be the same 20 foundations each year,” she said. “At the $50,000 to $150,000 gift, there’s lots of moving in and out — so those change all the time.”

Martin said that the majority of foundation funding comes from outside of Michigan.

“There are some key foundations inside the state that we go to regularly,” she said. “(But) most of the funding is coming from outside the state.”

Though the majority of foundation support comes from outside the state, Porter said gifts from foundations transcend state borders because they fund the research of problems felt across the country and the world.

“With foundations, often these are charitable organizations that have been established to solve one or more societal problems so there’s a certain altruism at work in what they’re trying to do,” Porter said.

Corporations

Two years ago, the University’s Business Engagement Center was established in an effort to strengthen existing relationships between corporations and the University and search for new potential business partners.

Before the BEC existed, the University’s Office of Development handled corporate relations. But because of the growing number of companies interested in University partnerships as public research becomes a cheap alternative to private research in tough economic times, the University decided to create the BEC — a separate entity that focuses specifically on corporations.

Today, the BEC partners with the Office of Development and Office of the Vice President for Research to expand the various ways in which the University works with corporations to increase funding to the University.

Daryl Weinert, executive director of the Business Engagement Center, said one objective of the BEC is to build lasting relationships with small and large companies alike, so that both the University and businesses can benefit from partnerships over time.

“The University isn’t really set up to be a transactional entity,” Weinert said. “It usually works better for both sides if we develop a longer-term relationship.”

While a major goal of the center is to foster philanthropic relationships, Weinert said the BEC also works with companies to promote research grants, student recruitment, licensing opportunities and the sponsorship of student projects.

“We’re really ahead of the curve nationally on this,” Weinert said. “We’ve fundamentally restructured the way we interact with companies.”

Within the BEC, relationship managers are assigned to specific companies to act as liaisons between the company and University. The relationship managers are responsible for communicating with the company on a regular basis to discuss potential partnership opportunities.

Besides talking with individual companies, relationship managers are assigned to schools and colleges at the University’s three campuses. The managers work with each school to gather information on what might spark corporate investment and what kind of corporate involvement the school would like to experience.

Weinert said that while the BEC is more involved with the School of Engineering and Medical School, it has helped every unit on campus form some kind of connection with a business.

Among other things, the BEC helps units and faculty at the University write proposals for research grants, scholarships and fellowships to obtain funding from companies the University has partnered with in the past.

Though the support companies provide to the University is of tremendous value, Porter said companies also often benefit from their gifts to the University.

“Companies are generally supportive of higher education institutions, particularly top-tier research institutions like Michigan because they see enormous value in supporting the best possible students who ultimately might become recruits for their company,” Porter said.

Weinert said the BEC does this because it knows the types of projects companies have historically funded and what they may be interested in funding in the future. He added that the center gives realistic advice to groups that are drafting proposals.

Weinert cited one such scenario with General Motors Co., which has a strong research relationship with the University, but is not currently capable of dishing out huge grants.

“General Motors isn’t at a point right now to make philanthropic grants so (we tell faculty) ‘I don’t think your time will be well spent,’” Weinert said. “Or we know historically General Motors won’t fund programs in this area so we recommend ‘You shouldn’t take the time’ or ‘Hell, absolutely; that fits right on. We’ve seen that has been a priority for them in the past.’”

While researchers often seek grants from companies, Weinert said the relationship is sometimes reversed, with corporations searching for specific researchers.

“We are often in the mix, helping a company make connections to individual researchers in areas where they have a technical interest,” he said.

While the BEC has only been around for two years, the University has seen a big dollar boost from the center. In the 2008 fiscal year, corporate revenue — including donations, research contracts and transfer licensing revenue — totaled about $140 million.

Though numbers for the 2009 fiscal year were not yet ready when Weinert was interviewed last month, he said the center had managed inquiries from more than 300 new entities over the last year that had no prior relationship with the University.

Based on the large interest, Weinert said he thinks the BEC is successfully drawing in corporations to invest in the University.

“It proves our hypothesis that having a unit at the University that can handle very broadly the relationships with industry and understand what the University has to offer is valuable to folks,” he said.