THE Alumni Association of the University of Michigan has sponsored two funds, one of which has been utilized for the support of the Association and the other, in theory at least, for the general welfare of the University (see also Williams professorship fund, in Part II: Alumni Association).
The first is the endowment fund of the Alumni Association, established at the time of the reorganization of the Association in 1897. At that time a plan was inaugurated whereby the alumni who so desired might become life members of the Alumni Association and life subscribers to the Michigan Alumnus by the payment of $5.00 a year for seven years, or $35 in all. Of every five-dollar payment, $1.00 was reserved for the running expenses of the Association and the other $4.00, or $28 in all, was deposited in the permanent fund, only the interest of which could be used for Association purposes. Subsequently, in June, 1921, with the increased subscription price of the Alumnus, the individual memberships were increased to $60 on a basis of six annual payments or $50 if paid at one time.
At the time when this fund was put in force the finances of the Alumni Association were very low, and a certain number of immediate payments of $25 were solicited; the amount received was to be made available for the support of the Association. Within three years, or at the end of the general secretaryship of James H. Prentiss, who had first sponsored the plan, the total amount of this endowment was $4,526.30 in cash and $35,780.40 in life memberships pledged but not due. Through many years the endowment fund has grown, although in the period 1930-38 it suffered some losses, until in 1940 it amounted to a total of $68,698.32. It is now administered by the University officials who handle trust funds, but is kept as a separate account and is not included with the other University investments. Normally it returns some $2,000 to the Alumni Association each year.
The second fund, known as the alumni fund, is administered by a board of trustees, originally created on action of the Alumni Association but now a self-perpetuating, incorporated body. The fund now amounts to $7,271.27.
Page 375Funds operated on a similar basis had been created in a number of other college and universities prior to the establishment of such a fund at this University and have become decisive factors in the support of their respective institutions. With this record in mind the class of 1916 recommended to the Alumni Association that such a fund be established and gave the sum of $387.03 toward it as a class memorial. The plan was approved by the Alumni Association and by the Regents, and was incorporated (P.A., 1903, No. 171) under the name, "Trustees of the University of Michigan Alumni Fund." The articles of Association were dated June 19, 1920.
This fund was designed as a reservoir for gifts to the University, and the trustees were empowered to administer the income in any way they saw fit for the benefit of the institution. It was provided, however, that special funds designated for specific purposes might also be incorporated in the fund and administered by the trustees in accordance with the specifications.
The fact that Michigan is a state university, however, has seemed to limit the growth of the fund, which has never developed as have similar undertakings in some of the endowed institutions. There has been a general feeling that if the University were to set up a large fund with no specific limitations as to its administration the legislature might at some time insist on its use for certain specific objectives rather than make an appropriation for them from the state funds, and alumni support has therefore developed in other ways.
In 1935 it was proposed that the alumni fund function as a temporary depository of monies ultimately to go to the University through the functioning of the Michigan Alumni Ten-Year Program. Only one occasion arose in the next five years, however, for this use of the fund, as it was discovered that the normal procedure of the ten-year program made advisable the immediate transmittal of contributed monies to the University.
The result has been that the fund has maintained its organization, but has developed very little since it was originally created.