FORWARD2 0 1 8

I S O U R D R I V I N G S P I R I T

W I S C O N S I N F O U N D A T I O N

A N D A L U M N I A S S O C I A T I O N

BOARD OF DIRECTORS

Jeffrey D. Wiesner, chairMichael S. Shannon, vice chairLinda L. AhlersRajiv BatraJohn D. BaumannSusan J. CellmerJerome A. ChazenJeffrey J. DiermeierSusan S. EngeleiterDavid F. FlorinCurtis J. FuszardColleen A. GogginsJeffrey C. Hammes

Elizabeth Quadracci HarnedJill S. HattonElzie L. HigginbottomLouis A. HollandJohn P. HoltonWilliam P. HsuPeter S. KiesPaul A. LeffPeter A. LeidelThomas P. MadsenJane R. MandulaKaren A. MonfreMelinda J. MountJohn S. NelsonCory L. NettlesSusan S. Patterson

Stephen R. PetersenLinda L. ProcciFrederick A. RobertsonRicky C. SandlerLaureen E. SeegerPaul S. ShainMichael R. SplinterStephanie L. SwartzPatrick A. ThieleDoris F. Weisberg

EX OFFICIO

Paul J. CollinsThomas J. FalkWade Fetzer III

Jere D. FlunoTed D. KellnerMichael M. KnetterJohn J. OrosFrances S. Taylor

WAA ALUMNI ADVISORY COUNCIL

Emil Ray Sanchez, chairSandy Sponem, vice chairKelli Trumble, past chairRichelle AndraeLori BerquamNatalie Bowman

Bob DunnDavid FlorinBrian FrohnaKristen GrilliJohn HawleyPeter HolstenPaul McCannAndrew MoyerKevin PickettJoe ShollerLaurie ShultsLouise SilbermanMartha Vukelich-AustinLynn Watkins-AsiyanbiKyle WeatherlyMartinez White

H I G H L I G H T S

FROM THE CEO

Michael Knetter gives his take on the UW’s budget, comprehensive campaign, and alumni engagment.

02

FINANCIALS

Read about income, expenses, dollars transferred to the UW, and more.

22

FROM THE

CHANCELLOR

Rebecca Blank offers insight on the UW’s successes and her priorities.

04

IMPACT

WFAA engages with alumni, donors, and friends to promote the UW’s priorities.

06

GREETINGS! When I came to UW–Madison from Dartmouth in 2002, the contrast between the two institutions made it easy to appreciate the significance of the UW. As a large, public research institution, the UW has a deep-rooted sense of community responsibility that can be seen throughout student volunteer organizations, within faculty outreach efforts, and in nearly every area of research on campus. The students, faculty, and staff at the UW are changing lives in Wisconsin and throughout the world.

This steadfast commitment to helping people by solving problems breeds an innovative mindset. UW researchers are on the front lines of some of the most pressing problems we face — from improving hurricane forecasting and helping cities plan for major weather events to mitigating the impact of diseases like Alzheimer’s and Parkinson’s.

For the past 170 years, the university has constantly evolved to meet society’s changing needs. In the UW’s earliest days, scientists discovered new vitamins, developed better dairy products, created new medicines, and combatted disease. UW researchers made the nation’s first bone marrow transplant possible, launched major advances in stem cell research, and helped develop the first weather satellites. Today our faculty are driving the digital age and harnessing the power of computer networks to improve everything from smart phones to supercolliders. This tradition of scientific excellence helps provide an unmatched educational experience for thousands of students who will go on to make their own game-changing innovations in every field imaginable.

UW–Madison continues to build expertise and grow programs in high-demand areas like computer and data sciences, engineering, medicine, nursing, and

beyond. Our mission at WFAA is to enhance the university’s excellence and keep it affordable in the face of large disruptions to its traditional revenue streams. Our work in securing philanthropic gifts and building partnerships with alumni and friends is vital to sustaining our great public university.

At the end of our fiscal year, in June 2018, we were 81 percent of the way to the fundraising goal for the All Ways Forward comprehensive campaign. By early 2019, with two years left, we are at 90 percent. More than 190,000 donors have participated in the campaign to date (up more than 25,000 from the end of fiscal 2018), contributing nearly $2.8 billion. Since the campaign’s start, gifts from alumni and friends have created 335 new faculty awards and 3,400 new scholarships. I am especially grateful to Ted and Mary Kellner and John and Anne Oros for their leadership as campaign co-chairs in 2018.

UW–Madison has an exceptional history and a promising future. In these pages, you’ll read about how your gifts, advocacy, and support are helping to preserve an institution that changes lives every day. Thank you for everything you do to help us move the UW forward.

ON, WISCONSIN!

Michael M. Knetter President and CEO Wisconsin Foundation and Alumni Association

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DEAR FRIENDS, UW–Madison is investing in excellence in part due to your generous support. We are expanding student access with more than 3,400 new scholarships funded in the past five years, hiring more faculty with gifts for new chaired positions, and bolstering our world-class research enterprise.

Expanding Student Access

Bucky’s Tuition Promise provides four years of tuition to any in-state student whose family income is below Wisconsin’s median income level of $58,000. In its first year the program is already covering about 800 in-state, first-year students.

Badger Promise provides tuition funding to first-generation students who transfer into UW–Madison and is serving about 150 students in its second year.

Growing Our Faculty

We welcomed more than 100 new faculty members in fall 2018, the largest number we’ve hired in six years, and an 18 percent increase over our 10-year average. We expect strong hiring again next year.

Part of our growth in hiring was due to our cluster hiring program, a program designed to hire multidisciplinary groups of faculty in key scientific areas. We anticipate hiring 50 to 70 additional new faculty through this program moving forward.

Bolstering Our Research Enterprise

We’ve had an 11 percent increase in research funding over the past two years, and we brought in our largest federal grant last year through the Great Lakes Bioenergy Research Center. Along with our partners at the Wisconsin Alumni Research Foundation (WARF), we continue to support UW 2020, a program that funds early-stage research projects that are high-risk and potentially high-impact. In its first four years, the program has funded 66 projects involving 400 faculty and staff members with a total investment of $25 million.

None of these investments would be possible without our community of engaged Badgers. I am grateful for every gift our alumni and friends have made to the All Ways Forward campaign. Thank you for your commitment to UW–Madison.

ON, WISCONSIN!

Rebecca Blank Chancellor, University of Wisconsin–Madison Morgridge Friends Distinguished Chair of Leadership

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A PROMISEB Y CO N T R I B U T I N G TO N E E D - B A S E D

S T U D E N T A I D, D O N O R S W I L L H E L P

F U L F I L L B U C K Y ’ S T U I T I O N P R O M I S E .

T H E D I F F E R E N C E A C O L L E G E D E G R E E

M A K E S E V E R Y W E E K . I N J U LY 2 0 1 8 , T H E

B U R E A U O F L A B O R S T A T I S T I C S R E P O R T E D

T H A T M E D I A N W E E K LY E A R N I N G S F O R

C O L L E G E G R A D U A T E S W E R E 8 0 P E R C E N T

H I G H E R T H A N T H O S E W I T H A H I G H

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It was the vow heard ’round Wisconsin: at a board of regents meeting in February 2018, Chancellor Rebecca Blank announced an ambitious plan to make sure that any student from a family earning less than the state’s median income could attend UW–Madison tuition-free.

“Our goal is to ensure that anyone who

is admitted can afford to be a Badger.”

“Many low- and middle-income families in Wisconsin are simply uncertain whether they can afford to send their child to UW–Madison,” Blank said. “Our goal is to ensure that anyone who is admitted can afford to be a Badger.”

The opportunity to be a Badger has more value — and value measured in dollars — than ever before. According to the federal Social Security Administration, college grads can expect to earn, on average, about $750,000 more than those with just a high school diploma; those with a graduate degree can expect to earn more than $1 million more over their lives. Education is one of the best means for people to improve their economic outlook, and Chancellor Blank’s promise will make UW–Madison an engine for transformative change for the children of hundreds of Wisconsin families.

By comparison to other universities, UW–Madison remains an affordable school. Its in-state undergraduate tuition ranks fourth lowest among the Big Ten universities. However, the cost of education — and the uncertainty about what costs will be after financial aid — remains a burden for many low-income

families. Ensuring that all qualified Wisconsin students, regardless of income, are able to attend UW–Madison is one of Blank’s top priorities.

Blank called her proposal Bucky’s Tuition Promise, and it’s a commitment to cover four years of full tuition and fees (two years for transfer students) for all in-state students whose families earn $56,000 or less per year in household adjusted gross income. Students would still have to cover all living expenses. The threshold rose to $58,000 in 2019.

The promise began applying to incoming freshmen in 2018, and the university estimates that it will require an investment of about $825,000 per class per year — eventually about $3.3 million annually. To make this happen, the UW intends to tap a wide range of resources, including private gifts from generous donors.

As the All Ways Forward Campaign heads into its home stretch, WFAA is ramping up efforts to raise dollars for student support. Since December 2017, generous donors have offered matching funds to inspire gifts in support of scholarships — including John ’55 and Tashia ’55 Morgridge, Susan ’79, MFA’82 and James Patterson, and Phill ’82, MS’83 and Elizabeth Gross.

UW–Madison will need philanthropic support to sustain Bucky’s Tuition Promise over the long term. A college degree remains one of the surest ways to improve one’s financial standing, and Badger donors are helping keep the path to a degree open to all.

Visit supportuw.org to see how you can give to UW–Madison scholarships.

$ 8 1 8 , 0 0 0

R A I S E D B Y T H E B U C K Y O N P A R A D E A U C T I O N O F B U C K Y B A D G E R S T A T U E S . O F T H E 8 5 S T A T U E S M A D E , 3 2 W E R E

A U C T I O N E D O F F T O R A I S E M O N E Y F O R G A R D I N G A G A I N S T C A N C E R ( T H E C H A R I T Y C R E A T E D B Y U W B A S K E T B A L L

C O A C H G R E G G A R D A N D H I S W I F E , M I C H E L L E ) A N D T H E M A D I S O N A R E A S P O R T S C O M M I S S I O N .

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AMDAHL’S LAW

ALUMNI PARK INSTALLATION

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115,558

VISITORS TO ALUMNI PARK

AND ONE ALUMNI PLACE

BETWEEN THE OPENING

IN OCTOBER 2017 AND

THE END OF FISCAL YEAR

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WE’VE GOT

CHEMISTRYP R I VAT E G I F T S A R E H E L P I N G T H E U W

I M P R O V E A N E S S E N T I A L C A M P U S FAC I L I T Y.

Chemistry certainly isn’t the biggest building on campus — it wasn’t when it first went up in 1965, and it won’t be when its new tower is complete in 2022. But when it comes to the student experience, there are few buildings that have bigger impact. Some 13,000 students will use the new chemistry building each year: not just chemistry majors, but those taking courses that are required for almost every STEM field.

2,200 students take General Chemistry every

year, and labs run from 7:45 in the morning

until 9:45 at night.

Half a century ago, when it was new, UW–Madison’s Daniels Chemistry Building was the university’s first attempt at building a high-rise classroom. In the 1960s, it was a high-tech wonder. But total enrollment was only 33,000 students then — today it’s approaching 44,000, and interest in science, technology, and engineering is growing. General Chemistry is among the UW’s most popular course: 2,200 students take it every year, and labs run from 7:45 in the morning until 9:45 at night.

Another thing about the Daniels Chemistry Building in 1965: it was built almost entirely with public funding. That couldn’t be done today — ever since Grainger Hall went up in the 1990s, the UW has relied on private support to help all its major building projects.

The UW needs to grow to meet the demands of an increasingly technical society. And UW–Madison depends on donor support to bring its vision — including for an expanded chemistry building — to life.

The UW will rely on generous donors for the chemistry project — of the $133 million cost, only about $91 million will come from state funds. Construction for the Chemistry Building’s overhaul began in September 2018, and UW officials are excited about what the expanded facility will mean for students in diverse majors across campus.

“With this new facility, we enlarge the opportunity to excel,” said College of Letters & Science dean John Karl Scholz. “We aim to offer the finest chemistry education in the country, and that requires a building that can accommodate, educate, and inspire our students.”

As of the end of fiscal 2017–18, the All Ways Forward campaign had raised $256.6 million for buildings and grounds — funds that will help the UW keep growing to meet the needs of the future.

Discover more about the Department of Chemistry at allwaysforward.org/ initiative/

the-on-ramp-to-scientific-inquiry.

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I N 2 0 1 8 , T H E C H R O N I C L E O F P H I L A N T H R O P Y L I S T E D T H E W O R L D ’ S

M O S T P O P U L A R C H A R I T I E S , J U D G E D B Y T H E N U M B E R O F G I F T S

R E C E I V E D. O N T H A T L I S T, U W – M A D I S O N R A N K S N U M B E R 7 6 .

In June 2017, Sandra Rosenbaum ’72, MS’76 lay in hospice, facing her final illness.

Her husband, Joel Berman, made a deathbed vow. “I promised to make one of

her dreams come true,” Berman says.

Sandra, who studied social work at UW–Madison, had always wanted to honor

her mother — Harriet ’48, who also studied at the University of Wisconsin —

by creating a scholarship that would support new generations to enter the

field. The cost of two years of advanced study can be a barrier to some

students. But those who enter the field have an enormous impact on people

who need it most. Harriet, for instance, devoted her career to helping troubled

teens.

“To me, social work is more than an accumulation of knowledge and beliefs,”

Sandra wrote. “It is a discipline that will teach how to utilize this knowledge into

helping to make a better society.”

UW–Madison has the power to change lives — not just of the students who

graduate from the university, but also of those people with whom Badgers

interact and in the communities where they will work. Through their gifts and

their involvement, UW alumni — and their families — help the university increase

its transformational power. The Berman gift is not only helping today’s social

work students, but it’s also enabling them to improve the lives of people around

the world and for generations to come.

With a $5 million gift, Joel Berman endowed

a perpetual fund that will provide a full-tuition

scholarship and stipends for students seeking a

master of social work degree.

Sandra passed away on June 21, 2017. That September, Berman fulfilled his promise,

announcing the creation of the Harriet and Sandra Rosenbaum Scholarship

Program and the Harriet and Sandra Rosenbaum Opportunity Fund in the UW’s

School of Social Work. Because many potential social workers abandon their

studies due to lack of funds, the gift provides financial aid for students who are

seeking a master of social work degree. With a $4 million gift, Berman endowed

a fund that will provide a full-tuition scholarship and stipends in perpetuity. He

has also gave an additional $1 million to endow the opportunity fund, which will

support workshops, guest speakers, and fieldwork for graduate students.

Sandra briefly pursued a career in social work, but after meeting Joel at the

Massachusetts Institute of Technology, the two married, and she became an

officer of Iatric Systems, Inc., a health care information technology company

Berman founded. “But even if social work didn’t turn out to be the right career

for her, she always cared about helping people,” says Berman. “And I care, too.”

The first five Rosenbaum scholarships were awarded in the 2018–19 academic

year, and the scholarship is changing lives by providing the opportunity for a new

generation of dedicated individuals to become social workers and improving the

many lives and communities that their good work will touch.

And that’s the legacy that Berman wants for Sandra. “So many students get a

bachelor of social work, but they need a master’s degree to really do work in

the field,” he says. “Sandy was committed to that [school], and to the cause of

helping people to help others.”

WFAA is committed to uniting alumni in support of UW–Madison. More than

84,000 alumni have given to the UW during the All Ways Forward campaign,

helping the UW and its alumni spread their impact into communities across

Wisconsin and around the world.

Learn more about the UW School of Social Work at socwork.wisc.edu.

S A N D R A R O S E N B A U M WA N T E D TO H E L P I M P R O V E L I V E S

O F T H O S E I N N E E D F O R G E N E R AT I O N S TO CO M E .

SOCIAL NETWORK

“I promised to make one

of her dreams come true.”

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H A R R I E T

A B E L S O N

R O S E N B A U M

J O E L B E R M A N A N D

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BRIGHT STUDENTS,

BIG CITYT H E U W P R O D U C E S S O M E O F T H E I N V E S T M E N T W O R L D’ S

L E A D I N G F I G U R E S. B A D G E R S I N F I N A N C E H E L P S M A K E

S U R E T H AT U W S T U D E N T S C A N N AV I G AT E T H E PAT H F R O M

M A D I S O N TO WA L L S T R E E T.

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T I M O T H Y H O T C H A N D A N I

Lodged in the Midwest, 940 miles from Wall Street, UW–Madison has quietly built a reputation as one of the nation’s leaders in educating investment professionals. Ranked as one of the top 10 public universities for studying finance, Wisconsin has produced some of the top investment minds in Milwaukee, Chicago, and New York.

The UW’s Applied Security Analysis Program (ASAP) — conceived by legendary professor Frank Graner PhD’48 and launched by his protégé Stephen Hawk’63, MBA’64, PhD’69 — gives students the opportunity to learn by investing actual funds in actual stocks. It has attracted talented students from around the country and given them substantive experience while they’re still in school.

“Having real money makes all the difference. They are making real decisions,” Hawk said. “The idea is you get the brightest students with a keen interest in investment together and they just feed off each other. It’s amazing what you can learn in that environment.”

ASAP began in 1970 with $100,000; today it manages more than $9 million.

“Having real money makes all the difference.

They are making real decisions.”

But even with that real-world educational experience, Badgers still lack the advantages of students at eastern schools — those 940 miles separate current students from the center of America’s financial community. And so, in 2016, UW grads living in New York conceived the Badgers in Finance group and launched it the following April.

Badgers in Finance brings together UW grads who live in New York and work in the finance industry. Led by Ricky Sandler ’91, the group unites grads from a wide variety of eras. Its advisory board ranges from John Oros ’71, a managing director of J.C. Flowers & Co., to young up-and-comers such as Timothy Hotchandani ’04, a managing director at Rothschild & Co. and a 2019 recipient of WFAA’s Forward under 40 Award. They’re united not only by location and career, but also by a desire to help mentor UW students and to improve employment outcomes for graduates.

In April 2018, dozens of UW students — MBA candidates and undergrads, mostly from the School of Business and the College of Letters & Science — traveled to New York to explore careers in America’s financial hub. And Badgers in Finance welcomed many of those students to the group’s spring networking event.

During that event, John Karl Scholz, dean of the UW’s College of Letters & Science, moderated a discussion with Ananth Seshadri, chair of the UW’s Department of Economics, and Jan Hatzius MS’91, chief economist and head of global economics and market research for Goldman Sachs. The visit gave students a chance to gain insights from working professionals — and to establish the network of connections that will open career opportunities.

WFAA’s work with alumni groups such as Badgers in Finance connects UW students to career opportunities. Badger ties like these enhance the value of a UW education.

Learn more about Badgers in Finance at badgersinfinance.net.

C E O S O F F O R T U N E 5 0 0 C O M P A N I E S W H O H A V E

A D E G R E E F R O M A U W S Y S T E M S C H O O L , M O R E

T H A N A N Y O T H E R E D U C A T I O N A L I N S T I T U T I O N

C O U L D C L A I M I N 2 0 1 8 .

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Bilge Mutlu has his eyes on the future.

The associate professor in UW–Madison’s Department of Computer Sciences is cultivating a world in which trustworthy technology solves problems in everyday environments. Mutlu has created drones that can signal their direction and intent to passersby, as well as learning companions who transform the reading experience for middle schoolers. He also has developed robots that help students regain their dwindling attention and robotic arms that assist their human collaborators.

His research focuses on developing new methods and guidelines for designing robotic technologies for human use and seamlessly integrating these technologies into human environments — drawing upon technological possibilities, human needs, and ethics to do so.

Featured in the Summer 2018 issue of WFAA’s Badger Insider magazine, Mutlu was initially trained as a product designer and worked in the household-appliances industry. Upon the industry’s budding interest in “intelligent” appliances, however, he decided to obtain his doctorate in human-computer interaction to turn his focus away from the appliance and toward the intelligence.

Today he codirects the “Mad UX” User Experience Design Online Certificate Program and enjoys working with students to think through problems, creating technical and design solutions to fundamental questions. “Robotics holds so much potential and involves so many deep technical challenges that there is always space for exploration and innovation,” he said.

“Robotics holds so much potential and involves

so many deep technical challenges that there

is always space for exploration and innovation.”

Mutlu is part of the UW’s growing computer sciences department — now the largest major on campus. But he also exemplifies UW–Madison’s cross-disciplinary approach. He’s affiliated with psychology and industrial engineering, and he directs the UW’s Human-Computer Interaction Lab. One of the aims of the All Ways Forward campaign is to promote faculty excellence by encouraging support for professors such as Mutlu — he was one of the featured speakers at a campaign event for alumni and friends in Denver last year.

As a past recipient of WFAA’s Computer Sciences New Faculty Development Fund, Mutlu also has advanced his work through help from private support.

By educating others and creating technologies for the benefit of all, Mutlu continues to shape the future at the UW and beyond.

Read more about Mutlu at uwalumni.com/news/assigned-reading-bilge-mutlu.

A U W CO M P U T E R S C I E N C E S FAC U LT Y M E M B E R D E V E LO P S T E C H N O LO G Y

TO B E N E F I T A N D S U P P O R T P E O P L E A R O U N D T H E G LO B E .

SHAPING THE FUTURE

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B I L G E M U T L U

Mutlu asks tough, critical questions to understand where technology may — and may not — help people and uphold their values.

MAKE A

MEMORYA L Z H E I M E R ’ S I S A FA S T- G R O W I N G T H R E AT

TO A M E R I C A’ S AG I N G P O P U L AT I O N . W I T H A I D

F R O M A LU M N I A N D D O N O R S, T H E U W I N I T I AT I V E

TO E N D A L Z H E I M E R ’ S A I M S TO S TO P I T.

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P R O F E S S O R O F G E R I A T R I C S

L U I G I P U G L I E L L I

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L O U J R . , L O U S R . , A N D

J E A N E T T E H O L L A N D

O F T H E 2 8 3 G I F T S M A D E T O T H E U W I N I T I A T I V E T O E N D A L Z H E I M E R ’ S D U R I N G

T H E B I R D I E S E V E N T, 2 6 1 O F T H E M — O R 9 2 P E R C E N T — C A M E F R O M

S O M E O N E W H O H A D N E V E R P R E V I O U S LY G I V E N T O A U W F U N D F O R

A L Z H E I M E R ’ S R E S E A R C H O R P A T I E N T C A R E .

9 2 %

Of all the common maladies that people suffer, Alzheimer’s disease is one of the most terrifying. Incurable and inexorable, it deprives patients of cognitive ability and memory, the things that give us our individuality. Some 5.7 million Americans have been diagnosed with the disease — and on average, a new diagnosis is identified every 65 seconds.

Some 5.7 million Americans have been

diagnosed with the disease — and on average,

a new diagnosis is identified every 65 seconds.

UW–Madison offers some of the nation’s leading clinical and research facilities to investigate and address this condition, which is now the United States’ sixth leading cause of death. In 2016, the university united the Wisconsin Alzheimer’s Disease Research Center and the more clinically oriented Wisconsin Alzheimer’s Institute to create the UW Initiative to End Alzheimer’s (IEA), which combines the work of scientists, clinicians, and outreach specialists to conduct research and then translate that into care: benchside to bedside to curbside, as the organization says.

In pursuit of its work, the initiative benefits from support from UW–Madison alumni and donors. In the last fiscal year, WFAA expanded its efforts to rally and celebrate that support. In June 2018, WFAA partnered with American

Family Insurance to create Birdies to End Alzheimer’s, a challenge in which donors made a gift for every birdie made during the American Family Insurance Championship golf tournament in Madison in June. Hundreds of donors made a pledge leading up to the three-day event, and 92 percent of those gifts marked the first time that donor had given to support the initiative.

And in July, the Buckingham Club of Chicago — a Badger group that supports UW athletics and the alumni network in Chicago — devoted its summer gala to raising funds for IEA.

Lou Holland Jr. ’86, a leader in the Buckingham Club, created a professorship and postdoctoral fellowship, both in honor of his father, Lou Holland Sr. ’65, a former Badger football star who died of Alzheimer’s in 2016. Lou Sr. was a leading investment professional and a longtime guest on the PBS program Wall Street Week before his diagnosis. In addition to his gift, Lou Jr. also chairs IEA’s board of visitors, and he volunteered to take part in a longitudinal study, the Wisconsin Registry for Alzheimer’s Prevention.

“When I saw what we had at the university, it made perfect sense for [my family] to get involved,” Holland told On Wisconsin magazine. The study hopes to find out what the disease’s early signs are by tracking medical history and lifestyle factors for the children of patients.

Visit memoriesmatter.org to help support UW Alzheimer’s research.

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U W – M A D I S O N I S O N E O F O N LY 2 4 F A C I L I T I E S I N T H E C O U N T R Y T H A T

H A V E T H E A B I L I T Y T O P R O D U C E A N D I M A G E R A D I O A C T I V E T R A C E R S

U S E D F O R E A R LY D E T E C T I O N O F C H A N G E S I N T H E B R A I N .

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BADGER PRIDE WALL

BY ARTIST NATE KOEHLER

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ASSETSJUNE 30 2018

JUNE 30 2017

Cash and cash equivalents 130,916,735 105,043,144

Income and redemption receivables 25,817,848 15,304,453

Prepaid expenses 1,567,945 2,209,309

Pledges receivable, net 122,589,146 131,720,292

Investments 3,860,699,207 3,653,235,317

Property and equipment, net 18,926,940 20,201,517

Real estate 9,276,327 2,889,362

Notes receivable 1,068,731 1,026,113

Other assets 4,105,199 3,707,056

TOTAL ASSETS $4,174,968,078 $3,935,336,563

LIABILITIES

Accounts payable 2,419,408 2,918,308

Pending investment purchases payable 54,783,240 55,001,392

Accrued expenses and other payables 6,478,011 6,952,922

Deferred revenue 19,757,297 1,609,194

Deferred compensation 2,522,791 2,475,638

Liability under split-interest agreements 44,599,135 45,048,021

Funds due to other organizations 279,228,731 293,701,763

TOTAL LIABILITIES $409,788,613 $407,707,238

NET ASSETS

Unrestricted 129,327,363 122,490,421

Temporarily restricted 1,883,399,918 1,745,855,111

Permanently restricted 1,752,452,184 1,659,283,793

TOTAL NET ASSETS $3,765,179,465 $3,527,629,325

TOTAL LIABILITIES AND NET ASSETS $4,174,968,078 $3,935,336,563

STATEMENT

OF FINANCIAL

POSITION

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REVENUES, GAINS, AND OTHER SUPPORT2018

(7/17–6/18)2017

(7/16–6/17)

Contributions 313,184,081 338,449,963

Interest and dividend income 47,585,892 33,582,155

Net investment gains 213,774,081 290,973,860

Other income 6,109,982 7,129,328

TOTAL REVENUES, GAINS, AND OTHER SUPPORT $580,654,036 $670,135,306

EXPENSES

Payments to or for the University of Wisconsin 279,541,953 253,168,819

Administrative and investment expenses 63,561,943 86,522,888

TOTAL EXPENSES $343,103,896 $339,691,707

NET ASSETS

Increase in net assets 237,550,140 330,443,599

Net assets at beginning of year 3,527,629,325 3,197,185,726

NET ASSETS AT END OF YEAR $3,765,179,465 $3,527,629,325

STATEMENT

OF ACTIVITIES

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EXPENSESThe Wisconsin Foundation and Alumni Association’s staff and board of directors believe that, to properly steward gifts, they must manage expenses efficiently. Like any charitable organization, WFAA measures its ratio of administrative expenses to contributions to demonstrate that it is properly stewarding the resources entrusted to it.

The figures below show WFAA’s administrative expenses compared to new gifts and pledges for the past nine and one-half years, from January 2009 through June 2018. (In 2016, WFAA changed its reporting cycle from calendar year to a fiscal year that begins on July 1.) Beginning this year, WFAA has added a new column to the expense table: net contributions. While cost of

raising a dollar is calculated as a percentage — administrative expenses divided by total contributions — net contributions are calculated by subtracting each year’s expenses from total contributions. Net contributions show in raw dollars how much WFAA has raised on a net basis, year by year.

The success of UW–Madison’s All Ways Forward Campaign has clearly affected WFAA’s operating metrics and, more importantly, generated new value for the university. The organization’s administrative expenses grew during the early years of the campaign, supporting investment in new advancement and engagement efforts, office support functions, and the campaign itself. However, contribution revenue grew at a far greater pace, as evidenced by the sharp, favorable dip in administrative expense ratios between 2013 and 2015.

Ultimately, WFAA’s expenses reflect a vibrant, growing organization, and results illustrate that vibrancy. Thanks to the overwhelming generosity of the UW’s donors, net contribution revenue continues to regularly produce more annual value for the university than ever. WFAA’s recent administrative expense ratio is lower than the precampaign average, and it appears that this ratio will remain steady or fall, despite carefully considered investments focused on generating greater marginal impact for the university for years to come.

ADMINISTRATIVE EXPENSES*

(excluding investment expenses)

TOTAL CONTRIBUTIONS

COST OF RAISING A

DOLLAR(as a percentage of contributions)

NET CONTRIBUTIONS

2018 45,552,238 313,184,081 14.5% 267,631,843

2017 49,281,002 338,449,963 14.6% 289,168,961

2016 (6 mos)

21,927,288 151,643,056 14.5% 129,715,768

2015 45,794,113 543,596,612 8.4% 497,802,499

2014 36,855,944 380,492,270 9.7% 343,636,326

2013 28,452,725 266,855,030 10.7% 238,402,305

2012 30,583,644 211,288,562 14.5% 180,704,918

2011 29,663,375 197,541,841 15.0% 167,878,466

2010 25,540,974 165,667,842 15.4% 140,126,868

2009 26,014,697 156,118,593 16.7% 130,103,896

TOTAL $339,666,000 $2,724,837,850 12.5% $2,385,171,850

Wisconsin Foundation and Alumni Association Administrative Expenses and Contributions, 2009–19 and Rolling Five-Year Averages

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Net ContributionsExpenses

Five-year averages, ending in year shown;

note that 2016 represents a six-month period.* Expenses have been adjusted to incorporate Wisconsin Alumni Association operation

prior to the June 30, 2014, merger with the UW Foundation to create WFAA.

Expenses:

$28.1

$30.2

$34.3

$37.1

$40.8

$44.3

Net Cont.:

$171.4

$214.1

$285.7

$304.0

$325.7

$331.5

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Total Administrative and Investment Expenses

2018 (7/17–6/18)

2017 (7/16–6/17)

Salaries 20,941,414 20,285,436

Employee Taxes and Benefits 6,214,378 6,056,117

Meetings and Special Events 2,148,703 2,017,890

Supplies and Equipment 2,310,372 2,548,460

Contract Labor and Consulting 1,233,509 1,827,798

Depreciation 2,168,501 2,063,751

Marketing and Promotions 3,268,181 3,391,467

Travel and Entertainment 720,937 1,026,669

Facilities 1,140,696 1,004,460

Unfulfilled Pledges 3,370,509 6,976,791

Professional Services 809,545 659,316

Insurance 248,873 510,886

Utilities 192,362 201,339

Administration / Other Expenses 784,258 710,621

ADMINISTRATIVE EXPENSES

45,552,238 49,281,002

INVESTMENT-RELATED EXPENSES

18,009,705 14,149,417

AGENCY FUND TRANFERS - 23,092,469

TOTAL $63,561,943 $86,522,888

Payments to or for the University of Wisconsin

2018 (7/16–6/17)

2017 (7/16–6/17)

Agricultural and Life Sciences 16,535,023 9,952,692

Arts Institute – 109,874

Athletics 17,524,365 31,503,034

Business 23,686,732 24,116,174

Chancellor's Designated 11,635,042 14,364,107

Continuing Studies 439,725 254,274

Education 5,214,371 6,083,606

Engineering 23,785,890 15,936,619

Human Ecology 2,641,374 1,665,902

International Studies 1,544,554 1,114,435

Law School 2,696,495 3,148,568

Letters & Science 44,329,681 25,665,326

Libraries 1,012,227 1,084,439

Medicine and Public Health 102,101,634 94,739,230

Nelson Institute — Environmental Studies 981,677 645,428

Nursing 1,998,848 3,827,474

Other Non-UW–Madison 1,007,382 1,483,939

Other UW–Madison 3,192,843 2,362,477

Pharmacy 2,000,364 914,356

Recreational Sports 461,300 120,899

Research and Graduate Education 3,133,658 2,071,527

Student Services Unit 433,065 262,209

UW Hospital and Clinics 1,165,994 2,891,310

Veterinary Medicine 4,018,102 4,154,512

Wisconsin Alumni Association 6,106,829 3,666,288

Wisconsin Union 1,894,778 1,030,120

TOTAL PAYMENTS $279,541,953 $253,168,819

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E N D O W M E N T

F U N D S

Endowment funds are the asset base that provides current and future revenues for the University of Wisconsin. The Wisconsin Foundation and Alumni Association staff and the investment committee of WFAA’s board of directors manage the endowment fund on a total-return basis. This allows the endowment to be invested with a long-term perspective and an emphasis on diversified, equity-related strategies.

The investment, spending, and expense-fee policies associated with our endowment are designed with the goal of enabling endowment balances to increase at the rate of inflation over the long term, after spending distributions and fees. WFAA currently allocates the annual income based on a spending-plan rate of 4.5 percent, multiplied by the average market value of the total endowment fund for the most recent 16 quarters. This rate is reviewed annually by the board of directors.

The table at left shows the total return figures, and the circular chart shows the asset allocation of WFAA’s endowment fund. The endowment fund asset-allocation targets have been established to promote overall portfolio diversification while providing a return necessary to meet the investment objectives.

1 year 9.2%

3 years 7.1%

5 years 7.7%

10 years 5.5%

Investment Performance*Annualized results

*Net of external manager fees

Endowment Fund Assets 2014–18$2,985,251,464 as of June 30, 2018

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The endowment fund has grown from more than $2 billion in value on June 30, 2014,

to nearly $3 billion as of June 30, 2018, as reflected in this graph.

Asset Allocationas of June, 30 2018

14.4% Private Equity61.4%

Global Public Equity

2.8% Real Estate

1.0% Cash/Other

2.3% Opportunistic Alpha

18.1% Global Fixed Income

June 30, 2018

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In increasing numbers, alumni and friends are creating legacies at the University of Wisconsin–Madison through planned gifts. Gift planning, a type of philanthropic giving, integrates charitable giving into a donor’s overall financial, tax, and estate planning to maximize benefits both for the donor and for UW–Madison. Examples of planned gifts include bequests, life-income gifts, gifts of real estate, and gifts of retirement plan assets. Planned gifts make significant funding available to the university each year, providing crucial support during this challenging fiscal period.

Donors can direct their planned gifts to accomplish many goals. Some deferred gifts are unrestricted, allowing campus leaders to fund the current needs and priorities of the university. Other planned gifts are directed to specific areas, such as schools, colleges, or departments, or to specific priorities, such as scholarships or faculty support. Some deferred gifts are intended to be used outright, while others establish permanently endowed funds. When deciding on a designation for a planned gift, donors should consider the delay inherent in planned giving: what will be of greatest benefit to the university when the gift is ultimately received?

If you are considering taking advantage of the benefits of making a planned gift, we recommend that you consult with WFAA’s Office of Gift Planning. Staff members are experienced in working with individuals, attorneys, and financial advisers. They can explain how life-income plans work, consult on the type of gift that is best suited to your needs, identify the correct legal names of campus departments and units, and provide language that will carry out your wishes.

All individuals with a planned gift in place for the university are welcomed into the Wisconsin Legacy Society — our way of thanking those who have made this philanthropic commitment. No minimum gift is required, and any information shared with us is nonbinding. Current membership includes more than 1,700 individuals.

P L A N N I N G YO U R

E S TAT E A N D

S U P P O R T I N G T H E

U N I V E R S I T Y

JULY 2017 TO JUNE 2018

Bequests, trusts, and insurance 95

New gift annuities (including deferred) 23

Charitable remainder trusts 7

TOTAL DEFERRED GIFTS 125

Number of Gifts Received

2017–18

$1,383,313 Charitable Remainder Trusts

$1,007,227 Gift Annuities

$19,843,497 Bequests, Trusts, and Insurance

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T H A N K

Y OU

for supporting UW–Madison. We are grateful for all that you

helped us accomplish in 2017–18, and we look forward to making

the university stronger for years to come.

ON, WISCONSIN!

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WFAA thanks these photographers for images on the following pages:

Andy Manis: Cover, 1, 3, 6

Jeff Miller, University Communications: 4, 8, 10, 20

Nancy Borowick: 14

University Archives: 10, 14

Wisconsin Human-Computer Interaction: 17

University of Wisconsin School of Medicine and Public Health: 18

Wisconsin Foundation and Alumni Association

1848 University Avenue | Madison, WI 53726-4090

supportuw.org | uwalumni.com

©2019 Wisconsin Foundation and Alumni Association

Editorial Staff: John Allen, Stephanie Awe, John Baron, Niki Denison, Falicia Hines, Debbi Peterson, Chelsea Schlecht, Erin Sprague

Designer: Morgan Sachs

F O R W A R D I S O U R

D R I V I N G S P I R I T

The largest undergradaute major on campus in 2018–19 was

computer sciences, with 1,565 enrolled students. That’s 300

more than second place (finance, with 1,238)

and by far the largest number of students in any one major

in any one year during the 21st century. A decade ago,

the UW had only 168 computer sciences majors.

1,565 COMPUTER SCIENCES STUDENTS

TOP 10 MAJORS

2018

1. Computer Sciences

2. Business/Finance

3. Biology

4. Psychology

5. Economics

6. Nursing

7. Mechanical Engineering

8. Political Science

9. Business/Marketing

10. Communication Arts

TOP 10 MAJORS

2000

1. Elementary Education

2. Mechanical Engineering

3. Electrical Engineering

4. Communication Arts

5. English

6. History

7. Business/Finance

8. Political Science

9. Art

10. Business/Marketing

$603.1 MILLION DOLLARS RAISED

for discretionary spending.

1848 M I N U T E S

in Day of the Badger, from

5 p.m. April 8, 2019, to midnight

of April 9. The one-day (plus a little)

giving event aims to involve as many

alumni and donors as possible in

supporting UW–Madison during that

time window.

MILLION

raised in gifts of less than $100 last year. Nearly 40,000 small gifts added up to make a big difference.

$1.7

TOTAL DONORS

who have given to UW–Madison during the campaign (individuals, organizations, and foundations) as of June 2018.

164,108

$3 MILLION

gift match offered by Susan ’79 and James

Patterson to inspire planned gifts. The

Patterson Family Scholarship Legacy Match

will match planned gift commitments with gifts to support scholarships

now. Planned gifts make up about 17.5 percent of

campaign dollars to date.

ATTENDEES

at the 11 UW Now events in 2017–18.

1,492

DEPARTMENTS AND FUNDS

participating in 2019’s Day of the Badger one-day giving event for UW–Madison, on April 9. That includes 43 alumni chapters around the country.

14 0+Funds raised for the School of Medicine and Public Health in the campaign as of June 30, 2017.

$697.4M

SO FAR

FORWARD

At the end of the 2017–18 fiscal year, the All Ways Forward

comprehensive campaign had been running for 66 months,

with 30 more to go. Thanks to tens of thousands of gifts — large

and small — progress has continued to run steadily ahead of schedule.

Here’s a snapshot of where things stood, as of June 30, 2018.

Funds raised in the All Ways Forward

comprehensive campaign by the end

of June 2018. That’s 81 percent of

the campaign’s goal of $3.2 billion,

with more than two years remaining!

$2,590.8

MILLION

UW–Madison is transforming the lives of people across

Wisconsin and around the world. Thank you

EDUCATING STUDENTS

TO CREATE THE FUTURE

CREATING VITAL RESEARCH

TURNING DISCOVERIES

INTO NEW BUSINESSES

HOW DO DIGITAL

TECHNOLOGIES AFFECT

THE WAY WE ACCESS

AND UNDERSTAND

INFORMATION?

In addition to the rise in computer sciences majors, the UW offers

a Digital Studies Certificate — an interdisciplinary exploration designed

to answer that question. Since the program’s launch in 2012,

more than 500 UW students have completed the certificate.

in journalism, communication

arts, life sciences communication,

and information studies.

50 COURSESgraduate with

a Digital Studies

Certificate each year.

150 STUDENTS