Office of the Vice President for Global Communications

Thursday, April 18, 2013

Charles Munger pledges $110 million for graduate housing, fellowships

A $110 million gift of securities from investor and philanthropist Charles T. Munger will support his vision for a new state-of-the-art residence designed to foster a community where graduate students from multiple disciplines can live and exchange ideas.

The gift includes $10 million for fellowships to help create a residential society that encourages scholarship and interaction from many fields of study. The Board of Regents approved the project and related fellowship program at its meeting Thursday.

  Charles Munger has long been a major benefactor to U-M. His latest gift is a $110 million pledge for graduate housing and fellowships. (Photo courtesy of Office of University Development)

The gift is the largest single donation to U-M in its 196-year history. The residence will be named in honor of Munger, a U-M alumnus and vice chairman of Berkshire Hathaway Inc.

The proposed eight-story building will house more than 600 occupants in a unique, high-density, residential-academic arrangement.

"This is an innovative and communal approach to graduate school education," said President Mary Sue Coleman. "Most universities do not take a community-like approach, and this project envisions an approach that makes graduate study less isolated. We see this as a revolutionary concept and an exciting opportunity for us to nurture graduate education within our ecosystem.

"Charlie Munger is passionate about improving graduate student housing and believes that educating one's self, in the right setting, is very powerful. We anticipate this new building will have many options for students for meetings, gathering spaces, project spaces and living accommodations that combine the best private and common space."

Most apartments in this new community of scholars will contain seven individual bed-study rooms, each with a private bath, a large shared kitchen plus dining and living areas with big windows. Some apartments will be used by visiting faculty.

In an effort to encourage interaction within and across disciplines, the entire top floor will feature comfortable gathering spaces, a fitness center with a running track, a commissary, and a Fellows' Room and a panoramic view of the campus and Ann Arbor.

Among those living in the new residence will be a group selected to receive the new fellowships funded by the Munger gift. Chosen from across the university's 19 schools and colleges, the fellows will have opportunities to foster multidisciplinary interactions.

The design Munger helped develop grew out of his experience with funding a large graduate student housing complex at Stanford University, the alma mater of his late wife, Nancy. He has worked with U-M to add such features as more communal spaces, an improved commissary, fitness facilities and a sky-lighted top floor that serves as either a screen porch or a solarium, depending on weather.

Munger says he is "cheerfully cooperating in a limited amount of celebration of his gift," partly out of duty and partly because he enjoys the attention.

"But I particularly want to avoid any perception that I claim large donative merit. After all, I waited until my 90th year before making the gift, then gained friendship and creative joy in working with the university in a very interesting design effort likely to have a good outcome, while I parted with assets I soon won't need," he said.

The approximately 370,000-square-foot, eight-story building will be located on Central Campus on the Thompson Street surface parking lot and adjacent properties between South Division and Thompson streets.

Additionally on Thursday, regents approved the purchase of four parcels of land that will become the site for the graduate housing project, and approved the use of eminent domain, if needed, to acquire two other parcels.

Regents voted to purchase properties at 535 and 537 S. Division St. and 401 and 409 E. Madison St. for a total price of $3.2 million. Also approved was a resolution to acquire the properties at 541 and 543 S. Division St. for "just compensation" and to exercise the university's right of eminent domain if necessary to do so.

The anticipated opening date is fall 2015. As much as $100 million of the gift will go toward the new facility, which will cost about $185 million. The rest will be funded by lease revenue.

The residence will be constructed based on the U.S. Green Building Council's LEED Silver certification rating system, the recognized standard for measuring building sustainability. In addition to LEED Silver, the building will exceed standard energy efficiency codes by more than 30 percent.

U-M has more than 15,400 graduate and professional students from 113 countries, most of whom now live in off-campus housing. The addition of about 600 beds of university-owned housing is not expected to cause much change in the long-existing housing pattern.

Munger, who studied mathematics at U-M in the 1940s, has long been a major benefactor to the university. He also has lectured at various schools and colleges on the campus and has advised the university on its investments.

In 2011, he contributed $20 million for renovations to the iconic Lawyers Club housing complex, which was named in his honor. Like this latest gift, Munger's intent was to help create a facility that would help students be successful. In 2007, he gave $3 million to the Law School for lighting and other infrastructure improvements in Hutchins Hall and the William W. Cook Legal Research Building.

In addition to his gifts to Michigan and Stanford, Munger has given millions to various schools and organizations in the Los Angeles area where he resides.

A native of Omaha, Neb., Munger graduated from Harvard Law School in 1948 and eventually founded the Los Angeles law firm of Munger, Tolles & Olson. Ronald L. Olson and many others in the firm are graduates of the Law School. Munger stopped practicing law in the 1960s to concentrate on managing investments. After running his own investment firm for many years, he became vice chair of Berkshire Hathaway in 1978.