$110 million gift to the University of Michigan comes from billionaire with philanthropic history
Charles T. Munger, the man behind a $110 million gift to the University of Michigan announced at the Board of Regents meeting Thursday, has been behind a number of construction projects at U-M and in California.
According to a New York Times report, before making the largest gift in university history, Munger donated $20 million in 2011 toward the renovation of living spaces at U-M Law School.
Charles Munger said he hopes his gift will encourage graduate students from different disciplines to live and work together.
Nati Harnik
In addition to his donations to the University of Michigan, Munger and his wife Nancy donated $43.5 million to Stanford University and have made sizable contributions to schools and the YMCA in Los Angeles, according to the New York Times. The billionaire's fortune has shrunk from a $2.4 billion in March 2008 in large part due to his philanthropic efforts, Forbes reported.
Ben Freed covers business for AnnArbor.com. You can sign up here to receive Business Review updates every week. Reach out to Ben at 734-623-2528 or email him at benfreed@annarbor.com. Follow him on twitter @BFreedinA2
Comments
mady
Mon, Apr 22, 2013 : 2:33 p.m.
Poor, struggling cash-strapped UofM........(sarcasm)
golfer
Sat, Apr 20, 2013 : 4:30 p.m.
bring back crazy jim.
PersonX
Sat, Apr 20, 2013 : 4:27 p.m.
The fact that this gift is directed at graduate study, and not once again for the professional schools, which have come to dominate UM under the current administration, is very good news, indeed. Graduate education is in trouble everywhere, and certainly at UM. Without better focus on graduate education we will endanger future college teaching as well as research. We should be grateful, even if the whole eminent domain matter is very unfortunate. It is somewhat ridiculous that the current president wants to live in Ann Arbor and be involved with local affairs, since she has not been a great citizen of the city until now.
rm1
Sat, Apr 20, 2013 : 2:49 p.m.
lefty48197 says: "Now the U can buy up even more historical, iconic, and tax generating properties in Ann Arbor" Presumably in that location, these two buildings are student housing with the usual student turnover. So perhaps lefty can tell us what about a couple of older houses -- formerly single-family structures I believe, but now carved up into student apartments -- is historical (historic?) or iconic?
Elijah Shalis
Sat, Apr 20, 2013 : 1:36 p.m.
So did Munger graduate from U of M or drop out to join the military? A2.com figure it out. Hunt!
blue85
Sun, Apr 21, 2013 : 4:11 p.m.
Try using Google...a UM-grad invention: Munger attended for math, but dropped out, as did many, during WWII.
Elijah Shalis
Sat, Apr 20, 2013 : 1:35 p.m.
I do not know why people donate to public universities with giant budgets and endowments when smaller ones like Adrian College could use the money a lot more.
ManA2
Sat, Apr 20, 2013 : 12:21 p.m.
Fabulous news. Congratulations to the University. More evidence of the amazing job President Coleman has done raising money to keep our University strong.
ManA2
Sun, Apr 21, 2013 : 7:55 p.m.
Jay - You have it wrong. People don't give gifts this size to the Development Dept. They would have had to do terrific work to get it to this point, but it is Coleman who would have landed it. That's the way that it works. Bottom line, this is a great thing for the University. It is stunning to me that most of the comments on this are negative.
golfer
Sat, Apr 20, 2013 : 4:32 p.m.
it is not coleman. it is the people whom go out and ask for donations. it is michigan before coleman.
Jay Thomas
Sat, Apr 20, 2013 : 2:44 p.m.
You are dreaming. Munger gave gifts to other schools as well. Coleman always gets the credit and never the blame. Fascinating. I know that Ross had been thinking about donating for a business school for a long time. That had nothing to do with Coleman... but her cheerleaders were hard at work then too.
Dirty Mouth
Sat, Apr 20, 2013 : 11:44 a.m.
Every time Charles T. Munger makes a donation, Ann Arbor loses more of its tax base (and beloved restaurants and historic properties).
actionjackson
Sat, Apr 20, 2013 : 10:41 a.m.
Remember the adage about a gift horse. I raise a toast to Mr. Charles Munger!
blue85
Sun, Apr 21, 2013 : 4:10 p.m.
"You have to watch those adages. There's another one that says "the good die young"." I believe the quote is closer to: "Those whom the gods love, die young." The point is that goodness will lead to a faster reward. If true, where is the harm? You need a more apposite counter-quote.
David Paris
Sat, Apr 20, 2013 : 12:27 p.m.
Exactly... because one hundred and ten million can buy you allot of vacant land in a place like Maryland, or Connecticut, and with the way Lansing has been treating Education lately, I'm very thankful as well, that they are spending the money right here.
Brad
Sat, Apr 20, 2013 : 11:42 a.m.
You have to watch those adages. There's another one that says "the good die young".
brian
Sat, Apr 20, 2013 : 2:48 a.m.
Great, more money to buy up property in A2.
Superior Twp voter
Sat, Apr 20, 2013 : 2:04 a.m.
I am standing by for the 99%'ers to explain this gift.
Brad
Sat, Apr 20, 2013 : 11:48 a.m.
Trying to clear his conscience?
Honest Abe
Sat, Apr 20, 2013 : 1:55 a.m.
We all know the U sure needed the money.
Mike
Sat, Apr 20, 2013 : 12:59 a.m.
Lighten up on the guy. He made a wonderful donation. If he made some of it because family businesses had to sell because of tax law, that's not his fault. That's the fault of socialist fascists graduating from academe like UofM who voted for lousy tax law.
Usual Suspect
Sat, Apr 20, 2013 : 12:32 a.m.
How can this possibly happen? I've been told rich people are evil.
Chase Ingersoll
Fri, Apr 19, 2013 : 11:02 p.m.
The "Oracle of Omaha's" wealth has come from making wise investments in three different business activities. First, he's made substantial investments in major corporations that he believes will appreciate; second, he operates a huge casualty and life insurance business which provides massive reserves of cheap capital to support his other two investing activities; and third, he purchases family owned businesses at fire sale prices. The last two practices are directly dependent on the death tax, and it's unlikely that Mr. Buffett would be the world's second richest man without it. The life insurance companies that give Mr. Buffett such a large reserve of capital to draw on are heavily dependent on the death tax ... Even as Mr. Buffett's insurance companies are "protecting" family businesses from the IRS, he is buying companies that are forced to sell themselves to pay the death tax. Mr. Buffett's ability to buy family businesses at bargain basement prices depends on families being desperate to sell—and nothing produces family businesses desperate to sell quickly like a 55% bill from the IRS on all of the businesses' assets. Mr. Buffett has bought numerous companies who were forced to sell because of the death tax including: Dairy Queen, Jordan's, Justin Industries, Star Furniture, Borsheim, Ben Bridge Jewelers, U.S. Liability, NetJets, R.C. Wiley, Flight Safety and Nebraska Furniture Mart. These investments are the financial equivalent of a vulture scavenging a corpse. Berkshire Hathaway is benefiting directly from the misfortune of others – and the economy would be much better off if the death tax didn't force families to sell their businesses under duress. http://www.professorbainbridge.com/professorbainbridgecom/2012/12/more-rich-liberal-hypocrisy-on-the-death-tax-from-you-will-have-guessed-warren-buffett-et-al.html
blue85
Sun, Apr 21, 2013 : 4:08 p.m.
"Perhaps you wouldn't be so fearless in your use of terms like "garbage" if you were compelled to use your real name and defend your own substance rather than critiquing others lack of use of quotes. " First, I'm not going to get into some sort of puerile escalation of machismo with you, and I'll leave it to AnnArbor.com to decide whether or not to ban your IP address for the implicit threat in your post. Second, you are probably not a college graduate: my original comment was mild but in fact your citation without quotes is plagiarism. You took credit for the work of another. The only mitigating factor is the link you included. Sadly, the tax code is neither liberal nor conservative, it is what it is…despite what they may preach at Pepperdine. It is interesting that Buffet is a liberal, but the donor in this case is a self-professed conservative who has no problem with eminent domain. So, while you provided the link, the underlying content is either a lie or indicative of preposterous incompetence: no corporation over $1MM in balance sheet would struggle with the concept of proper estate structuring to avoid the taxes at issue. "I think Bill O"Reilly has an applicable term for the type of person that would write your critique, and it is not "PATRIOT"." This is the crux of the discussion: the tax code is ideologically neutral. O'Reilly is a right-wing nutbar and citing him is dispositive of the fact that you are not arguing the code, but social engineering. What does patriotism have to do with this? • From Wikipedia: Boswell's full mention of this statement reads: Patriotism having become one of our topicks, Johnson suddenly uttered, in a strong determined tone, an apophthegm, at which many will start: "Patriotism is the last refuge of a scoundrel." But let it be considered, that he did not mean a real and generous love of our country, but that pretended patriotism which so many, in all ages and countries, have made a cloak of self-int
blue85
Sun, Apr 21, 2013 : 4:07 p.m.
"Uh...you don't cite any facts whereas Professor Bainbridge does, which is probably why even though he is a Heritage Foundation trained conservative, he is a highly regarded law professor employed by and widely published by a number of politically liberal institutions." I studied taxation and tax law at the graduate level. I can assure you that there are dozens of ways to structure estates to obviate tax. I queried a friend who is an attorney, he said there are hundreds of ways to minimize/eliminate estate taxes…his example: a reversionary trust. Even basic finance courses and curricula under the CFA program explain how to set up a trust or foundation to reduce tax impacts. A step up basis at death usually marks positions to market so that there is no subsequent gain on sale. A collar, a financing agreement, a family limited partnership and dozens of other mechanisms may be used. Bainbridge is grinding an axe and you simply don't understand how the tax code works. An appeal to authority (Bainbridge) is a classic logical fallacy. My appeal to authority is to my contact, but the difference is, if you went to 100 accounting/tax/finance Ph.Ds, I'm highly confident they would laugh you out of the room.
Chase Ingersoll
Sat, Apr 20, 2013 : 12:37 p.m.
Uh...you don't cite any facts whereas Professor Bainbridge does, which is probably why even though he is a Heritage Foundation trained conservative, he is a highly regarded law professor employed by and widely published by a number of politically liberal institutions. Perhaps you wouldn't be so fearless in your use of terms like "garbage" if you were compelled to use your real name and defend your own substance rather than critiquing others lack of use of quotes. I think Bill O"Reilly has an applicable term for the type of person that would write your critique, and it is not "PATRIOT".
blue85
Fri, Apr 19, 2013 : 11:34 p.m.
1) In my opinion, if you are going to quote someone, you should put quotes around the material, not just provide a link; 2) Per direct citation from the article, the author's chief concern is that Buffett is a liberal and his fear is that Buffet's money will go to liberal causes; the author is at Pepperdine, a pretty conservative place; thus the talking points are really not about good tax policy, they are ideologically driven; the author actually suggests that Buffet could have paid more taxes were he a good citizen...hilarious to hear such a concept from a conservative...cats living with dogs; 3) "which provides massive reserves of cheap capital to support his other two investing activities..." Insurance companies are bound by risk based capital guidelines and there is nothing cheap about the way they raise capital; capital raising is market based; 4) "Mr. Buffett has bought numerous companies who were forced to sell because of the death tax " This is utter garbage and disingenuous coming from a "tax professional". There are dozens of structures which allow an entity to be either given a step up basis or appraised at discounts for marketability via structuring through a family partnership. I seriously doubt that entities of the size he mentions were so mismanaged that the heirs had to sell at those sorts of discounts...preposterous. Finally, the point of the donation providing tax relief is that it goes to a tax exempt organization: UM. Your post is based on misinformation and I wouldn't credit it highly enough to call it garbage.
rm1
Fri, Apr 19, 2013 : 10:26 p.m.
For anyone who wants to inform themselves on the issues, here's an article on Michigan eminent domain: http://www.bosglazier.com/domain.shtml There are others if you Google for "Michigan eminent domain".
Jeff Renner
Fri, Apr 19, 2013 : 10:15 p.m.
Mr. Munger's relationship to the University (beyond being a donor) seems to me to be important information that should be included in the story. A reader shouldn't have to go to the links to find out. (The NY Times article says he got his undergrad degree here, while the Forbes.com link says he dropped out to join the Army Air Corps.)
Veracity
Fri, Apr 19, 2013 : 10:13 p.m.
Does the gift come with any directions on how it is to be used?
aarog
Sat, Apr 20, 2013 : 3:42 a.m.
Yes, The Huffington Post has a good article on it. it is for getting grad students together in a living arrangement, saying "Big goals with central planning have a lot of failure," he said. "Modern graduate students are sensational people. You don't have to drive them – all you have to do is enable them." http://www.huffingtonpost.com/2013/04/18/charles-munger-university-of-michigan-donation_n_3111464.html?utm_hp_ref=college
lefty48197
Fri, Apr 19, 2013 : 10:04 p.m.
Oh Goody! Now the U can buy up even more historical, iconic, and tax generating properties in Ann Arbor and remove them from the local tax rolls. Yipee!
Kai Petainen
Fri, Apr 19, 2013 : 9:19 p.m.
Google 'Berkshire Hathaway eminent domain' and you can find some interesting stuff. Here's one example: "The eminent domain plans being considered by several local governments in California would only focus on home loans in private-label securitization. These plans, which have yet to be formally adopted by any locality, have been proposed by Mortgage Resolution Partners, a San Francisco-based organization run by Steve Gluckstern, a former executive for Warren Buffett's Berkshire Hathaway Insurance Group and a major donor to President Obama's re-election campaign.
Kai Petainen
Sat, Apr 20, 2013 : 2:44 a.m.
hmmm... Geithner was in Ann Arbor this week. Google 'eminent domain Geithner' and you can see some interesting stuff. did anyone happen to ask him about the subject when they met him?
dancinginmysoul
Fri, Apr 19, 2013 : 8:29 p.m.
Oh look, more money for U.
Barzoom
Fri, Apr 19, 2013 : 8:29 p.m.
Too bad he didn't give some money to Blimpy Burger.
Ben Freed
Fri, Apr 19, 2013 : 8:09 p.m.
A2M3, It has been reported that William Martin was paid $3.17 million for the 4 properties the University purchased from him. Ben
Brad
Sat, Apr 20, 2013 : 12:17 p.m.
OK, so when did he buy them, and what did he pay?
A2M3
Fri, Apr 19, 2013 : 8:40 p.m.
Thanks Ben
Martin Kennedy
Fri, Apr 19, 2013 : 8:01 p.m.
A2M3......How do you know what price was offered?
A2M3
Sat, Apr 20, 2013 : 12:24 a.m.
I don't know, but see above
A2M3
Fri, Apr 19, 2013 : 7:50 p.m.
With that generous gift, the UM can't negotiate with the property owner and agree on a fair price. No, they have to pursue emminent domain and make him sell it at their price. I wonder what the former athletic director got for his properties, bet that won't be disclosed.
A2M3
Sat, Apr 20, 2013 : 12:23 a.m.
@jon67, with 110 Million in hand and an "essential" dorm project in the works, talks could be at a standstill because the owner didn't want to sell, but would for the right price, which may be above market value. One would think a premium above market value would be appropriate in this case. Eminent Domain would rely on comps and appraisals to determine value, not actual value in this case.
jon67
Fri, Apr 19, 2013 : 10:07 p.m.
"...their price"? You apparently have no understanding of what actually happens in an eminent domain proceeding. When all efforts at negotiating a mutually agreeable price fail, a court will hear both side's evidence on what constitutes fair market value and in a ruling, set the price.
Jim
Fri, Apr 19, 2013 : 8:35 p.m.
I agree