In The U.S. Midwest, A $100M Model For B-School Scholarships

These days, when deans from other business schools talk to Sri Zaheer, they all want to know one thing: How did her school, the University of Minnesota Carlson School of Management, get so many big donors to check their egos at the door?

The question comes up as the school prepares to wrap up a four-year fundraising drive that has raised more than $180 million, easily eclipsing the original target of $150 million. More than half of the total, $106 million, will go toward scholarships; of that amount, the Carlson School announced this week, $50 million will comprise a new, endowed scholarship fund to help the B-school attract, retain, and train the future business leaders of Minnesota — and beyond.

The Centennial Scholarship Fund, named to mark the 100th anniversary of the school in 2019, was made possible by the cooperative generosity of 15 mega-donors who agreed to allow the school total control over how the money is spent. It’s a pile of cash that will live on “in perpetuity,” Sri Zaheer says, giving future deans “the ability to use it strategically in the ways that make sense to them.”

“We are very, very excited about it,” says Zaheer, Carlson’s dean.

‘A BIG FOCUS … IS TO DIVERSIFY OUR STUDENT POPULATION’

The University of Minnesota’s Driven campaign began in October 2017; the public portion of the fundraising drive concludes in June. All told, through Driven, the Carlson School has raised more than $183 million, the bulk of which will go toward undergraduate and graduate scholarships, increasing Carlson’s overall scholarships by 35%.

As part of the Driven campaign, the Carlson Centennial Scholars Program offers generous scholarship packages to new students, with undergraduate scholarships renewable for four years and graduate student scholarships lasting for the duration of the student’s program. Centennial Scholars also receive a stipend for the required international study experience and specialized programming to complement their studies.

“Thanks to our most ardent supporters, we will be able to compete for promising students from different backgrounds, and significantly grow our capacity to deliver a diverse and globally-prepared workforce,” Zaheer says. “As we move into our second century of business education, it is imperative that we produce leaders who will boost economic vitality, improve quality of life, and champion the discovery of positive solutions, here in Minnesota and around the world.”

A first cohort of 34 Centennial Scholars — 28 undergrads and six grad students — is now enrolled. Nearly three quarters identify as female and almost 40% are students of color. Once fully operational, the program will support a minimum of 75 new Centennial Scholars per year — half undergraduates, half graduate students. “In steady state, we will have 300 scholars a year,” Zaheer says, “so about 75 in each entering class.

“Right now, a big focus for us is to diversify our student population, both in the undergrad and in the MBA program. So, a lot of it is directed towards women, students of color — and at this point in time, also rural students, first-generation students, people who are coming to college for the first time, especially in the undergraduate program.”

One of the scholars, undergrad Brianne Brewster of Burnsville, Minnesota, says the scholarship money lifts a heavy burden.

“I feel very humbled and honored to be receiving a Centennial Scholarship,” she says. “One thing that was going to possibly hold me back from attending the Carlson School was the financial burden I worried it would cause. However, receiving this scholarship reiterates that this is the right place for me and that I will be able to make ends meet financially and focus more on being successful in the classroom and in other aspects of my life!”

EGOS OUT THE DOOR

The Centennial Scholars Program is funded by 15 mega-donors, whose gifts nearly double the size of Carlson’s endowed funds, says Travis Smith, associate vice president for principal gifts and strategic initiatives.

“The size of this means that you can have pretty substantial impact right away,” Smith says. “And that’s a really neat thing.”

It’s also a game-changer in terms of philanthropic messaging.

“This is a program that’s quite unique in that it’s very sizable, but it’s a relatively small group of donors who came together for a common cause,” he adds. “They put personal preferences and egos and all that kind of stuff out the door. And, put their trust in the school, and school leadership. They’re able to say, ‘You know what, I can see this. I can see how this will make a difference. I can see how my particular portion of this will play with all of the others, and let’s do it.’ I hope that that messaging can get out as well, because it could have ramifications for our fundraising going forward.”

The Centennial Founders include two anonymous donors as well as Driven co-chairs John and Nancy Lindahl, alumni and long-time university benefactors. “We are honored to be part of accelerating critical scholarships for the Carlson School of Management,” the Lindahls said in a news release. “Our world needs young leaders to engage and advance world changing ideas and innovations. Centennial Scholar students will be supported to elevate their academic and professional experiences and enter the workforce ready to embody business as a force for good.”

As Carlson Centennial Scholars benefit from this scholarship program, they will in turn contribute to the ongoing growth of Minnesota businesses and communities, says Andrea Wood, head of social impact at Best Buy, one of the companies that funded the program.

“We are thrilled to team up with the Carlson School for this scholarship that supports teens who want to pursue a post-secondary education,” Wood says. “We know that jobs in management within the tech industry are increasing, so the need to diversify and expand talent is extremely important. This scholarship is just one more way Best Buy is preparing teens for the jobs of the future.”

‘WE WANT THE BEST & BRIGHTEST HERE’

As the Carlson School prepares to unveil a new undergrad curriculum in fall 2022, the huge infusion of scholarship cash will help fill the ranks with top student talent, Dean Zaheer says. The bottom line is that for most people considering Minnesota Carlson for an MBA or other degree, there is money to be had to help pave the way.

“It has been a great success,” she says. “Our goal for the Carlson School was $150 million. I think we’ve raised close to $190 million now, already. We still have a month left to go, but I think we will probably close out somewhere close to 190, or just under 200. Of that, $106 million is for direct scholarship support. Of that $106 million, the $50 million is the Centennial, and there’s another $40 million of endowed scholarships, which are small endowments. You can endow a scholarship at our school for $50,000. And so there are a lot of smaller endowments which are also extremely helpful, of course, for our students, but often they are more restricted. They often have some preferences: restricted to MBAs,. restricted to undergrads, those kinds of restrictions. Plus another $16 million in demand scholarships, which are the small amounts that people give towards scholarships, which we aggregate, and we can hand them out to students as needed.

“For the Centennial program, there is total flexibility in how we use these scholarship funds, and we can use it strategically to attract certain kinds of students at certain times. We want to bring the best and the brightest to Minnesota, and retain the best and the brightest from Minnesota, in Minnesota. We want the best and the brightest here, and we can deliver the education they need.”

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