One of the largest-ever gifts to a business school will catapult the U.C. San Diego Rady School of Management into the top tier, the institution’s dean says. The $100 million donation from billionaire philanthropist Ernest Rady, who became the naming founder of the California B-school in 2004 with a $30 million donation, will be spent on attracting high-caliber faculty, drawing in high-quality students through fellowships, building up two institutes, and creating a one-year “big data” master’s program, Dean Robert Sullivan says.
Considered on the basis of number of faculty members – the tiny Rady School has 27 – the $100 million gift announced this week is the largest in the history of a U.S. business school, Sullivan says. By any measure, the size of Rady’s latest donation to the UCSD B-school is among the eight largest gifts to a business school ever in the U.S. Only five other donors to business schools have been more generous, the largest being a $300 million pledge in 1997 to the University of Chicago’s Booth School of Business from alumnus David Booth.
The Rady School is only a decade old, but its performance over that period merits strong support, Ernest Rady tells Poets&Quants. “I thought the first decade would be them just struggling . . . finding a way to succeed,” Rady says. Rady, who made his fortune in financial services and real estate, credits Sullivan – former dean of the University of North Carolina Kenan-Flagler Business School – with the school’s progress. “He’s just absolutely surpassed any aspiration or dream I had,” Rady says. “He’s really the reason I’ve made the commitment. His vision has proved to be very productive.”
In 2014, the Rady School placed 57th in Poets&Quants’ top 100 B-school ranking. Also in 2014, the school made the BusinessWeek B-school rankings for the first time, placing 51st overall – and No. 1 for intellectual capital, which is based on faculty research. U.S. News, in its latest ranking, puts Rady at 63rd overall among U.S. B-schools.
TINY B-SCHOOL’S DEAN AIMING FOR TOP 15
“Our goal is to be recognized as being in the top 15,” Sullivan says. “We will be.” Sullivan says he expects it will take about 10 years for the school to hit that mark.
Ernest Rady’s $100 million gift will be disbursed over time, “almost on an as-needed basis,” Sullivan says. Some 30% to 40% of the money will go toward recruiting and retaining faculty. Other primary areas to be funded through the gift will be fellowships and institutes for “big data” analytics and innovation, Sullivan says.
School officials will use the gift money to leverage additional funding through matching donations, Sullivan says. “We’re in a public institution and we need to have a self-funding model,” Sullivan says.
The school offers a two-year full-time MBA, a part-time MBA, an executive MBA, a one-year master’s program in finance, and a PhD in business. It has 102 full-time students and 106 part-time students. The funding for the data analytics center will allow the school to start offering in the future a one-year master’s program in big data, says Sullivan, who became the founding dean of the school in 2003 after leaving the deanship at the Kenan-Flagler Business School at the University of North Carolina.
Sullivan’s vision of a school turning out innovators and entrepreneurs in the technology, life sciences, and health-and-wellness sectors has borne fruit, with 83 companies started by graduates that are thriving and raising capital, he says. However, while the school is situated to take advantage of and contribute to the area’s strong life sciences, health care, and technology sectors, its “niche” approach to fitting into those sectors and forging entrepreneurs means it won’t perform well across all the metrics used in ranking and evaluating B-schools, Sullivan says. “We’re not doing all things for all folks,” Sullivan says. “We’re not trying to send people to Fortune 500 companies. Our graduates often get paid in equity.”
RADY GAINING GROUND ON OTHER CALIFORNIA STATE SCHOOLS
In the University of California system, the Haas School of Business in Berkeley and UCLA are typically ranked among the top 15 B-schools nationwide. Lower in the rankings, the Rady School has generally trailed two other UC B-schools, at Davis and Irvine. While Rady still falls behind in starting salary, with graduates’ average base salary at $73,000 compared to Davis’ $90,000 and Irvine’s $84,000, and in job rate at graduation, at 46% to Davis’ 51% and Irvine’s 56%, it’s moved ahead of both those schools on the employment rates three months after graduation. Rady now chalks up an 87% employment rate three months post-graduation, compared to Davis’ 86% and Irvine’s 82%. The latest employment numbers represent a substantial improvement for Rady over 2012, when only 38% of its MBAs had jobs at graduation and 71% three months after.