Schools to establish foundations

2 UM

Regents OK separate fund-raising arms for UMCP, UMB

`An enormous difference'

System's pooled endowments had top returns on investment

May 13, 2000|By Michael Hill | Michael Hill,SUN STAFF

The University of Maryland, College Park and the University of Maryland, Baltimore moved a step closer to setting up their own fund-raising foundations after a committee of the Board of Regents of the university system gave the go-ahead yesterday.

The two schools are expected to have their foundations operating by July 1. But they are expected to keep their money where it is, in the University of Maryland Foundation, which manages the endowments for most of the state's public colleges and universities.

According to administrators of the two schools, the independent foundations will have their own boards of trustees, which would become the lead fund-raisers for the campuses.

FOR THE RECORD - An article Saturday incorrectly reported an action by the advancement committee of the Board of Regents of the University System of Maryland. The committee approved a separate fund-raising foundation for the University of Maryland, College Park, but it deferred action on a similar foundation for the University of Maryland, Baltimore. The committee is expected to act on the proposed UMB foundation in a special session before the Board of Regents' July 7 meeting.
The Sun regrets the error.

"I think this is going to make an enormous difference in our fund raising," said Brodie Remington, vice president for university relations at UMCP. "We are going to have a volunteer leadership group dedicated to the well-being of College Park."

T. Sue Gladhill, vice president of external affairs at UMB, agreed. "This will provide the infrastructure that will allow us to grow our fund-raising activities," she said.

Remington said that in recruiting people for the foundation board, "We are telling them this is the closest thing College Park has to a board of trustees."

The state's colleges and universities have a variety of fund-raising and investment organizations that reflect the various ways different schools became part of the university system.

The schools that used to come under the University of Maryland heading -- UMCP, UMB, University of Maryland, Baltimore County, University of Maryland, Eastern Shore, University of Maryland, University College, and two research institutions -- all shared the University of Maryland Foundation.

"That was effective in its time and place, but I think we have matured to the point where we need to be more local in our advocacy," said Gladhill.

The universities that grew out of the state teachers colleges and historically black institutions -- Towson, Salisbury State, Bowie State, Coppin State and Frostburg State -- as well as the University of Baltimore, all had individual foundations.

With the exception of Salisbury State and the University of Baltimore, the schools all invest their money through the University of Maryland Foundation. That is not expected to change because the foundation's return on its funds has been the best of any university foundation in the country, returning 33.2 percent, according to its last yearly statistics.

"You can look at Harvard, Yale, Princeton, any other school, and we were No. 1 for one-year, for three-year, for five-year and for 10-year returns," said John K. Martin, the system's vice chancellor for advancement. "It can't be any better."

Martin said the campuses benefit by combining their funds into a $250 million endowment.

"Because of the size of the endowment, we can maintain a very diversified portfolio and hire the very best investment managers at the very best fees," Martin said.

Remington and Gladhill said UMCP and UMB are planning to claim the funds in the endowment that were earmarked for their campuses -- an amount well over half the $250 million -- but won't remove the money as long as the returns stay high.

A separate foundation has been a goal of UMCP President C. D. "Dan" Mote Jr. since he arrived in September 1998. Mote raised hundreds of millions of dollars using a similar foundation at the University of California, Berkeley.

His push for a separate foundation came as the system was looking for tighter control after revelations of abuses at Bowie State. Martin said the guidelines adopted in the wake of the Bowie troubles -- especially more timely audits -- will govern the separate foundations.

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