Bloomberg News

UCLA Faculty Approves Making Anderson MBA Self-Supporting

June 08, 2012

The University of California, Los Angeles, business school’s MBA program can separate itself from state support, freeing up funds for the rest of the campus, the university’s faculty said.

The UCLA academic senate voted 53-46 to allow the Anderson School of Management to replace public funding for its master of business administration program with private money, the school said late yesterday in a statement. The move needs the approval of the UC systemwide senate and President Mark Yudof.

California cut the budgets for its state universities and community colleges by $1.4 billion, or 12 percent, this year, and Governor Jerry Brown has threatened an additional $800 million reduction if voters don’t approve a plan to raise taxes. Dropping state support for the MBA would free about $8.8 million for the rest of the university, UCLA said. Anderson would still rely on state support for undergraduate and doctoral programs.

“We are in a different era now and unfortunately we are in a public higher-education system that is under real stress,” Judy Olian, dean of the Anderson School, said in an interview. “We have to think of innovative solutions.”

Under the plan, Anderson would make up for the loss of state revenue through donations and streamlined operations, Olian said. Alumni have already pledged $19 million in gifts under the condition that the MBA program becomes self- sufficient, she said.

‘Domino Effect’

The school would have the authority to moderate tuition increases and have more flexibility in hiring faculty, according to Olian, who said the new funding model could be implemented by July 1 if the systemwide senate and Yudof give the green light.

The vote by UCLA’s faculty is significant because it’s the first time any mainstream segment of the state’s public higher- education community has “decided they would be better off going it alone,” said Hans Johnson, of the Public Policy Institute of California, a nonprofit, nonpartisan think tank. The proposal has been controversial because it could set a precedent for other professional schools in the state to follow, he said.

“The concern is it could create a domino effect, with other schools who are able to fund themselves going off to do it,” Johnson said.

The Anderson School of Management, founded in 1935, has more than 1,600 students enrolled in MBA and doctoral programs annually, according to its website. Former students include Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., and Larry Fink, chief executive officer of BlackRock Inc.

UCLA, founded in 1919, has about 27,000 students.

To contact the reporter on this story: Oliver Staley in London at ostaley@bloomberg.net; Alison Damast in New York at adamast@bloomberg.net

To contact the editor responsible for this story: Lisa Wolfson at lwolfson@bloomberg.net


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