When he became president of the University of Wisconsin Foundation on October 16, Michael Knetter was doing what has become natural – pursuing an opportunity he saw as important.
Early in his career, that was teaching undergraduate economics at Dartmouth College and eventually the MBA students at its Amos Tuck School of Business. “That’s really a pretty big program,” said Knetter, who earned his bachelor’s degrees in economics and mathematics in 1983 from UW-Eau Claire and a PhD in economics from Stanford University in 1988. “They place their graduates in great places. It was exciting to be one of their key faculty members.”
The deanship of the Wisconsin School of Business offered the Rhinelander, Wisconsin, native a chance to return to his home state and energize a well-regarded institution in 2002.
“We have a great business school. It has more students than they have at the Tuck School. It has a big undergraduate program,” he said. “I thought, ‘You know, we could probably add even more value by bringing alumni into the life of the school more, not just through their financial gifts.’ The ways the alumni engage with the business school has a big impact on the outcomes for the students.”
Once on campus, the mind that led to Knetter to serve as a senior staff economist for the President’s Council of Economic Advisers for presidents George H.W. Bush and Bill Clinton started considering the economic model for higher education at UW-Madison and beyond.
“Since I’ve been here in Wisconsin, when you look at the landscape of higher education, it’s been a constantly moving target in terms of the financial blend of tax money, tuition and private gifts funding the core operations of the University,” he said. “That’s only going to accelerate with the financial crisis. People are concerned about state budgets. It’s likely to be the case that the way the University gets funded will shift more and more to tuition dollars and gift money.”
Getting involved in the gift part of that equation made more than a little sense to Knetter.
“I like development. I like engaging people. I like being a spokesperson for what we do and a representative for what we do, because I’m proud of it, and it’s energizing to talk with external stakeholders and try to get them excited about our mission.”
“The Foundation job was appealing to me because it’s been really important to the University historically and it will only become more important over time,” he said. “It’s also the thing that probably of the various pieces of activity that make up the job of the dean, if (Chancellor) Biddy Martin were grading me, she’d probably say, “Well, Mike, that’s a class you did pretty well in. The other ones, I’m not so sure about.’ ” That last statement is accompanied by a smile from the man who helped put together the Wisconsin Naming Gift, $85 million in discretionary gift funds from 13 partners to preserve the Wisconsin School of Business name for at least 20 years. Since the gift was announced, a 14th partner joined, and more than $5 million was raised from donors to make Knetter the honorary 15th partner on his departure from the School.
“I like development. I like engaging people. I like being a spokesperson for what we do and a representative for what we do, because I’m proud of it, and it’s energizing to talk with external stakeholders and try to get them excited about our mission,” Knetter said.
“So it’s kind of a perfect storm. It’s important, I think I’ve been good at some facets of it, and I like it,” he said. “Once I realized that, I thought, ‘Why am I even debating why I should apply for this? I’d better get after it.'”
Tradition and change
Knetter is the third president in the Foundation’s 65-year history, following in the footsteps of Robert Rennebohm (’48 CALS) and Andrew A. “Sandy” Wilcox. He is cognizant of the way that the Foundation traditionally has not made itself the center of attention while raising, investing and distributing billions of dollars in support of the University. “That’s as it should be,” he said. “We will remain an independent organization that is very important to the work done on campus.
“That doesn’t mean we don’t have points of view on these issues, and it doesn’t mean that these issues won’t partly define what our campaigns are about,” he said. “I think it’s very important that all of us at the Foundation understand at a great level of detail what the state of play is for the financing of higher education in America. That’s our raison d’etre.
“Our work is not done unless this university is where we want it to be.”
“Our work is not done unless this university is where we want it to be. It takes an appreciation of the dynamics of higher education financing that we’re up against, so we can think clearly about what we’re trying to achieve, what our motivation is and what role gift funds play,” he said.
When talking with Knetter about how the UW-Madison is financed, it’s clear the degree to which he has considered the history and possible future of the arrangement.
“The University spends about $2.5 billion a year,” he said. “Let’s take out the auxiliary operations revenue that’s in the denominator of that. And let’s take out the research piece, because a lot of that is federal grant money that funds the research mission, period.
“Then there’s the educational mission that really gets funded essentially by three sources: Tax revenue, tuition and gift funds. That’s an informal arrangement. Nobody says: ‘The state pays 40 percent, tuition is 40 percent and gift funds are 20 percent.’ Nobody says what the total pie is. It’s a completely voluntary and informal arrangement by which the state, students and their families, and alumni and friends finance the educational mission. Each party is doing its share.”
Human nature suggests that each party would prefer if the others paid more so they could do less, he said.
“The real challenge in this is trying to make sure that everyone is doing their best and everyone has a shared vision about what the organization wants to be and everyone has an appreciation that for what I’m putting in, I’m getting good value,” he said. “That’s what needs to be managed well.”
The worst thing that could happen is for finger pointing to break out among the stakeholders, he said, and that could occur if one of the groups is not contributing what the others can see as reasonable anymore.
“Everyone knows that the state has funded the lion’s share of this thing for a long time,” he said. “I remind students, when we have to pay a little bit more, that it’s very easy to complain that we aren’t getting as much from the state or the share is going down. But, boy, I would say instead, ‘Look at what the state has built. Look at how little students have historically had to pay.’ What’s stopping us from making this as great as we want it to be?”
He notes that a private Ivy League institution like Dartmouth gets no state funding, while the University starts with $450 million of state money each year. “That’s a pretty nice tailwind. It’s up to us to do something with that. It’s all out there for us,” he said.
“The last thing that I would ever do is point fingers at the taxpayers of this state. They have built a phenomenal university,” Knetter said. “How do we sustain that and improve on that in the modern economy, where, let’s face it, college degree holders are the big winners?
“The state also has to recognize that if others are going to take on more operating budget, maybe the governance and financial management of this place needs to be more autonomous too, but that’s not our place as the Foundation to be out front on that,” he said. “I’ve been talking about this even before Chancellor Martin arrived here. And I’m delighted she’s taken up leadership on this issue with the New Badger Partnership idea.”
On the personal side
Knetter describes himself as “very social. I derive energy from being around people.” He and his wife, Karen, have been married for 22 years. They have two daughters, Maxine, 13, and Lillian, 9, in eighth and fourth grade, respectively.
“So we’re in a phase of life now that, when I’m not working, a lot of what we do revolves around what they’re doing. That takes me to the pool sometimes,” for his daughters’ swimming practice and competition,” which I enjoy. I occasionally drag them to the golf course with me. I don’t have to drag too hard. We all play a little bit of golf. That’s the leisure activity that I’ve held on to. I try to work out a few times a week. Lately that’s taken the form of yoga practice.”
The Knetter family also likes to travel, with the latest expedition being a trip Asia “to have some new experiences and have our girls see other parts of the world.”
“I love to read,” he said. “My background is in economics, and we’ve got quite a laboratory experiment running in finance and economics these days in America, and there are a lot of things I’ve tried to keep up with. And being on campus, around people who are thinking about these issues, whether they’re in the history department, or political science or finance or economics, that’s just fun for me.”