$40 million gift boosts UH college of business

By RON NISSIMOV

August 24, 2000 Web posted at: 11:52 AM EDT (1552 GMT)

HOUSTON, Texas (The Houston Chronicle) -- Houston mutual fund manager Charles T. "Ted" Bauer gave $40 million Wednesday to the business school at the University of Houston, the largest donation to a single program in the school's 73-year history.

Today, the UH System Board of Regents will rename UH's College of Business Administration the C.T. Bauer College of Business.

The gift -- one of the largest to any business school and the second-largest in UH history -- will go into an endowment and expand the business school's annual budget by 25 percent. It will fund chairs, professorships, fellowships and scholarships, UH officials said.

"We aspire to be the No. 1 urban research university in the nation," UH Chancellor Arthur K. Smith said during a news conference at the main campus. "This gift will help immeasurably in moving a very important component of the university to the top tier."

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Smith said the UH endowment before the gift was estimated at between $450 million and $500 million.

"This is a very happy day for me," said Bauer, 81, co-founder and chairman of Houston-based Aim Management Group.

"There is no greater need in America today than improving education," he said. "The intent of the gift is make the University of Houston a leading institution for graduate and undergraduate business education."

He praised UH for maintaining a diverse student body, and said he wants the gift to help the university meet the needs of an urban center.

A transplanted Northeasterner who earned a bachelor's degree from Harvard University and an MBA from the New York University Graduate School of Business, Bauer said he wanted to give something back to Houston because the Bayou City had "done wonderful things for us."

He came to Houston in 1969 to head investing for American General Corp., an insurance company. In 1976, he and two associates founded Aim Management. Bauer announced in June that he plans to retire at the end of the year.

Today, publicly traded Aim Management is the nation's eighth-largest mutual fund company, managing more than $176 billion in assets for more than 8 million shareholders. Of its 2,500 employees, 400 are UH business school graduates.

Smith said that unlike most large donations, Bauer's gift was delivered in a lump sum, greatly enhancing its immediate value to the university.

In May, San Antonio businessman Red McCombs gave $50 million to the college of business at the University of Texas at Austin, but that donation will be spread out over eight years.

Smith said private donations are crucial to helping UH reach world-class status. All state colleges receive funding based on enrollment, but only the University of Texas and Texas A&M University systems receive additional money from the state's permanent university fund.

Last year, UT received an additional $85 million from the permanent fund, and Texas A&M received an additional $50 million, Smith said.

He said UH will ask the Legislature next year for an additional $20 million.

"We depend heavily on state funding, but the margin for excellence is provided by private donors, who, by recognizing a need, enable a university to aspire to greatness," Smith said.

UH officials said programs in the business school already are ranked in the top 10 percent nationally by U.S. News & World Report and the Princeton Review.

Bauer's son, Doug Bauer, said the Ruth and Ted Bauer Family Foundation has donated money and equipment to various local education programs, and about 130 Aim Management employees volunteer at Houston inner-city schools.

In 1991, San Diego Padres owner John Moores and his wife, Rebecca, both UH graduates, donated a record $51.4 million to the school.

That donation was not directed to a specific academic program, and about half of the gift was earmarked for building state-of-the-art athletic facilities. Moores founded BMC Software in 1980.

Other large gifts to business schools include a $60 million donation in January to the University of Virginia, a $50 million lump sum gift in 1998 by the family of the founder of Wal-Mart Stores to name the Sam M. Walton College of Business Administration at the University of Arkansas at Fayetteville, and a $40 million lump sum gift to the Wharton School of Business at the University of Pennsylvania.

The UH System has 32,000 students at four campuses -- the main campus, UH-Downtown, UH-Clear Lake and UH-Victoria. The system's budget for this fiscal year is $679 million, and the budget at the main campus for the same period is $483 million.

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