The UW Foundation appears to be taking on the growing funding gap head-on. I believe they have the right person in charge. He should be taking over from Ward as chancellor as he has the right mix of passion and energy. I do not think Ward is up to the task anymore.
We are fortunate to see firsthand the transformative effect your gifts have had on the university and society. To advance understanding and encourage further dialog about the future of our great university, I will be sending out quarterly messages to provide an update on important issues facing the university.
As you likely know, the university today faces serious challenges. These challenges are not unique public universities around the country are working to adapt to new fiscal realities that include less public funding, more reliance on tuition and private support, and the need to serve more students with financial need in our increasingly uneven society. I remain confident that we are well positioned to deal with this changing landscape due in part to our large and loyal alumni base.
But, of course, philanthropy alone is not the answer to these challenges. UW-Madison and UW-System leaders must also make adjustments so that together we sustain a truly great university.
Chancellor David Ward is addressing this economic crisis with a call for faculty to rethink educational delivery using modern technology in ways that can improve effectiveness, expand reach and reduce cost per student. The university has demonstrated an enormous capability in innovation related to our research mission. Chancellor Ward is challenging faculty and staff to apply that same rigor to our educational mission. At the System level, leaders must make difficult choices about the sticker price of in-state and out-of-state tuition, enrollment mix and regulation of expenditures.
While the university is focused on educational innovation to expand our reach and reduce costs, we at the UW Foundation seek to grow the number of alumni and friends who support the university's mission and to manage our existing resources as effectively as possible. We are making investments to strengthen our communication and data infrastructure and working in concert with our university and Wisconsin Alumni Association colleagues to grow the scale of our development activity. Providing a predictable and growing revenue stream for the university will help ensure long-term sustainability.
In 2011, the Foundation transferred more than $220 million to the university to support need-based and merit-based scholarships, faculty salaries and research, innovative academic programs, outreach efforts, facilities and more. Combine this with approximately $400 million in state support and $350 million in tuition that make up the university's budget, and you'll see how your giving significantly enhances the quality of the people, programs and career opportunities offered by the UW-Madison.
Historically, the vast majority of philanthropic support provided to the university has been in the form of highly restricted gifts to meet a particular goal. These gifts are intended to provide a "margin of excellence" for the university in specific areasto make state buildings better than the state budget allowed, support faculty research in a specific area of study or provide scholarships for students meeting particular criteria. Gifts that provide a margin of excellence will continue to be an important part of the university's success.
In addition, like many other universities, we will be working to engage alumni and friends in supporting the university through regular annual giving. In making annual gifts, supporters delegate decision-making to the leadership of the unit receiving the gift. The growth of the Wisconsin School of Business Annual Fund was one of the most important ingredients in our progress during my tenure as dean of that school.
When I began at the Foundation, I was surprised to see how concentrated our support has been: Our top 4,000 donors (about 1% of our living alumni population) provided more than 80% of the gifts we've received in the past 30 years. With such a large and passionate alumni base, a strong annual giving program can make an enormous difference to our future. If each alumnus gave only $100, that would generate nearly $40 million per year in flexible support. While we can never expect 100% participation, I believe we can significantly increase the current 10% of our alumni population who support academic programs in any given year.
The role of great public research universities in the world has never been more important. In addition to generating life-changing research, the UW-Madison will educate a significant number of our future leaders in science, business, government, education, journalism and more. The future of the university is truly in our hands. The state of Wisconsin has built a tremendous resource in the university over more than 150 years. Going forward, the university will be as great as our students and alumni want it to be. Thank you for all you do to support the mission of the University of Wisconsin-Madison.
As always, I welcome your feedback and questions.