Stanford Graduate School of Business Business School Fund FY12 Report

UNRESTRICTED GIFTS PROVIDE INNOVATION CAPITAL

Annual and reunion giving is the lifeblood of the Stanford Graduate School of Business (GSB). With 90% of endowed gifts restricted to specific purposes, the Business School Fund provides seed capital for new ideas and nearly half of the schools annual expendable gift revenue. The Business School Fund enables the school to take advantage of opportunities as they arise and ensure the GSB continues to innovate. Due to the generosity of 6,978 donors, $13.7 million was raised for the Business School Fund in fiscal year 2012. The support of alumni and friends has enabled the GSB to make significant progress toward key initiatives that will ensure the school continues to innovate and remains a pioneer in the field of management education and knowledge creation. In the fiscal year ending August 31, 2012, unrestricted gifts supported: Student programs Faculty research Alumni initiatives Instructional technology to facilitate effective learning and teaching

Impact on Students

UNRESTRICTED SUPPORT HELPS PROVIDE FINANCIAL AID TO ATTRACT THE BEST STUDENTS AND EXPOSE THEM TO WORLD-CLASS CURRICULAR EXPERIENCES

Fellowships To attract the best students to the GSB, the Business School Fund helps fill the financial gap when the school needs resources beyond dedicated fellowship funds. In the 2011-12 school year, the average MBA fellowship award was $23,890, which met approximately 25% to 30% of financial need. In all, the GSB awarded $10,575,189 in MBA fellowships in 2011-12 to 450 recipients. In addition, all PhD students received an average award of $81,166 to cover tuition and living expenses. Student Life The Business School Fund supports student life activities at the GSB, which provide unparalleled leadership and professional growth opportunities for our students as well as a critical link between students academic studies and important issues and trends in business practice. Student life activities and student services include: Student-run conferences, such as the Principal Investment Conference Nearly 70 clubs ranging from career interest groups and geographic groups to recreational groups Major events, such as the annual Latino Leadership Banquet and Black Business Students Association gala Academic advising and tutoring Pre-enrollment programs, orientation, and commencement Career Management Center The Career Management Center (CMC) is another critical piece of the GSB student experience supported by annual funds. The CMC partners with students and recruiters to develop an employment strategy that minimizes resources and maximizes success. One of the unique elements of the GSB is the diversity of career paths pursued by our alumni. During 2011-12, 309 employers hired either an MBA graduate for a position or a rising second-year MBA student for a summer internship. For the MBA Class of 2011: 85% of students seeking employment had a job offer by graduation 95% had an offer within 3 months of graduation 16% chose to start companies upon graduation The CMC has responded to the generational shift in student career interests by pursuing a personalized strategy of helping each of our students define a unique career and life vision, and then connecting them with resources, people, organizations, and opportunities that are aligned with their vision. The CMC has built a multidimensional career and life vision program that includes workshops, facilitated small groups, and extensive oneon-one advising. On the connections front, we sponsor a range of activities beyond on-campus recruiting including a dedicated outreach effort to less traditional employers guided by student preferences, networking events like Fewer than 300, which focus on fast-growing companies with fewer than 300 employees, and spring on-campus development.

$214
Funds an MBA student for one day

Speakers at the 2012 Black Business Students Association gala

Impact on Students
(continued)

Joint Degrees Unrestricted gifts help fuel academic programs, including the schools four joint degree programs, which enable MBA students to bridge academic disciplines and obtain expertise in multiple areas. Combining studies strengthens students academic experience and better prepares them to pursue their professional interests. The GSBs goal is to increase the joint degrees earned at the GSB from 1 in 6 to 1 in 4 by 2020. During the 2011-12 academic year, 46 joint degrees were awarded in conjunction with the following Stanford schools: 22 with education, 18 with earth sciences, 5 with law, and 1 with humanities & sciences (public policy). Studio Venture Lab In the past year a 3,000-square-foot space on the third floor of Zambrano of the Knight Management Center was reconfigured to become the Stanford Venture Studio with the support of unrestricted funds. The space, which is open 24 hours a day, was designed to encourage student teams to brainstorm business ideas, share entrepreneurship concepts, and pursue start-up opportunities. The studio has already attracted students from across Stanford University, including teams that are continuing to work on their projects initially conceived in the multidisciplinary Design for Extreme Affordability course, which reinforces the GSBs efforts to strengthen academic collaboration with Stanfords six other schools. Student Trips The Business School Fund helps offset costs associated with the planning and execution of student-led trips, which satisfy the Global Experience Requirement. Global Study Trips expose students to how business is done in other countries, while Social Innovation Study Trips (formerly Service Learning Trips) enable students to see how their management education can contribute to effective and sustainable solutions to social and environmental issues. During the past year, 459 students and 16 faculty advisors went on 16 Global Study Trips to 18 countries, including to Saudi Arabia, Qatar, and United Arab Emirates in the Middle East, and Nigeria and Kenya in Africa. Meanwhile, 111 students and 7 faculty advisors went on 6 Social Innovation Study Trips to Africa, Asia, the Middle East, and North America.

50/50
The GSBs funding model: tuition covers roughly half the cost of an MBA education; alumni giving helps cover the rest.

MBA students, faculty, and staff on the Global Study Trip to United Arab Emirates and Qatar

I make unrestricted gifts to the GSB each year because I believe in the mission of the school. I believe the leadership and faculty of the GSB take the investment of capital we make in the school and produce outstanding future leaders of organizations, which produce a great return on capital for our society.
Jeff Waters, MBA 86
BU SINE SS SC HOOL FU ND FY1 2 RE PORT | STAN FORD GRAD UAT E SC H OOL O F BUSINE SS 3

Impact on Faculty
UNRESTRICTED FUNDS SUPPORT FACULTY TEACHING AND RESEARCH, WHICH SHAPE THE STUDENT EXPERIENCE AND GENERATE NEW IDEAS.

Distinguished Teaching Awards Each year students in each of the GSBs three academic programs honor standout professors with the Distinguished Teaching Awards. In 2011-12 MBA students chose Associate Professor Dirk Jenter for his compelling teaching of Managerial Finance, a tough, required course that builds a framework for first-year students. For the second straight year Sloan Masters Program students honored Charles Lee, the Joseph McDonald Professor of Accounting, for making accounting compelling to all. Doctoral students honored Jeremy Bulow, the Richard A. Stepp Professor of Economics, for the individual attention he gives to his students, mentoring and advising on a one-on-one basis, and for creating a friendly and warm environment. Research Highlights The GSBs faculty members are not only effective teachers who bring lessons to life in the classroom, but also stellar researchers who contribute new ideas to the field of management. Ilya A. Strebulaev, associate professor of finance, found that the actual costs of corporate defaults and bankruptcy are higher than assumed. In a new paper, he and his coauthors combined historical data on corporate defaults with a new analytical model to tease out investor reactions to a default both before and after it happens. Their conclusion was that default causes a much bigger decline in a companys total market value than is generally assumed. They estimate that defaults, which can range from missed bond payments to outright bankruptcy filings, will, on average, reduce a corporations total market value by 21.7%. For fallen angels companies that started out with investment-grade ratings default will destroy about 30% of the total asset value. Before, the best estimate had been that corporate defaults cost companies about 20% of their value. But that estimate was based only on defaults at 30 companies that had originally been financed with high-yield junk bonds. Strebulaev analyzed 175 corporations, including many fallen angels that defaulted between 1997 and 2010. People sometimes actually favor hierarchical relationships over equal ones, according to a recent study by Lara Tiedens, the Jonathan B. Lovelace Professor of Organizational Behavior and Senior Associate Dean for Academic Affairs, and a coresearcher in a paper published in the January 2012 volume of the Journal of Personality and Social Psychology. Thats because hierarchical relationships are easier for people to grasp and manage, making them feel more successful. The larger goal, says Tiedens, is to help organizations be more mindful about how they structure themselves. With successful, high-profile companies such as Google moving away from a clearly defined pecking order, the prevailing wisdom has become that hierarchy is bad and equality is good. But there are things that are good about hierarchy, and things that are good about equality, Tiedens said. When youre creating an organization it is important to think about what structure will serve your goals best.

Associate Professor Dirk Jenter receives MBA Distinguished Teaching Award

90%
Amount of endowed gifts that are restricted, making unrestricted gifts the schools lifeblood

Lara Tiedens, the Jonathan B. Lovelace Professor of Organizational Behavior, and Senior Associate Dean for Academic Affairs

Impact on Alumni

UNRESTRICTED GIFTS PROVIDE FUNDING TO KEEP GSB ALUMNI CONNECTED AND ENGAGED THROUGHOUT THEIR LIVES.

The Business School Fund helps underwrite alumni events worldwide, providing lifelong learning experiences and networking opportunities. Last year more than 1 in 5 living GSB alumni attended a GSB event, with alumni gathered at 264 regional events in 65 cities around the globe. In turn, GSB alumni and friends supported the school in record numbers with more than 6,978 alumni making gifts. Unrestricted funds help offset the costs of the first reunions held in the Knight Management Center, which help set the stage for a lifetime of alumni giving. Fall 2011 reunion weekend set an overall attendance record with 1,930 alumni and their families coming to campus, while spring reunions saw 937 alumni and family return to celebrate. In addition, two classes set attendance records with 99 alumni from the MBA Class of 1961 and 203 from the MBA Class of 1986. Spring reunion featured the formal dedication ceremony on Town Square in front of the Bass Center, Dean Garth Saloners welcome, and inaugural speaker events in Cemex Auditorium featuring Jeffrey Pfeffer, the Thomas D. Dee II Professor of Organizational Behavior, and Joel Peterson, the Robert L. Joss Consulting Professor of Management. Both fall and spring reunions showcased the schools new facilities with guided tours, intimate class panels and other gatherings in classrooms, receptions in the Seawell Family Board Room and General Atlantic Great Room, and festive meals in outdoor plazas where classmates reconnected. Peer Mentoring During spring reunions the Center for Leadership Development and Research launched a peer mentoring program for alumni from the classes of 2002 and 2007. The initiative serves as a wonderful opportunity to receive advice from peers who may be facing similar leadership and career challenges and to stay connected to classmates. Reunion programming included a session in which alumni discussed the biggest stumbling blocks and career challenges they have faced since graduating from the GSB. Following that, the groups started meeting virtually during sessions facilitated by center staff via the Blue Jeans network, an online tool that connects different communication platforms. Alumni Consulting Team Unrestricted funds help support the work of the Stanford Alumni Consulting Team (ACT), which brings together alumni volunteers to make a significant impact on the community by applying their management skills to challenges facing social benefit organizations. ACT contributed approximately $3 million in consulting services in fiscal year 2012 to 34 nonprofits including the Bay Area Ridge Trail, in which a team developed a marketing plan aligned with the organizations strategic planning goals, and Chanticleer, where a group of volunteers developed strategic options for sustainable growth and a process management framework for implementation.

Alumni reconnect at the Knight Management Center during reunion weekend

40.1%
Of MBA alumni made gifts in fiscal year 2012

The relatively small size of the GSB class creates a unique atmosphere where you feel inspired by and truly accountable to your classmates. The intimate GSB community also gives you unparalleled access to peers and alumni, who have all been so willing and generous with their time, to help students in whichever way they can. Meg He, MBA Class of 2013
BU SINE SS SC HOOL FU ND FY1 2 RE PORT | STAN FORD GRAD UAT E SC H OOL O F BUSINE SS 5

Impact on Technology

ANNUAL GIVING HELPS THE SCHOOL USE TECHNOLOGY TO INCREASE COLLABORATION, PRODUCTIVITY, AND REACH.

Glenn Carroll, the Laurence W. Lane Professor of Organizations, at a March reception at the Stanford Center at Peking University

As the means to accomplish its forward-looking initiatives, the school has several innovations in technology underway. At the most immersive end of the spectrum is GSB Boardroom, an HD video conferencing system that will connect on-campus groups of up to 25 with similarly sized audiences at the recently opened Stanford Center at Peking University (SCPKU) in Beijing. Back at the Knight Management Center, an enhanced classroom for distance learning is also in the works with audiovisual equipment that will enable faculty to teach bigger groups of up to 100 (50 inperson and 50 offsite), with the first remote audiences also planned to be at SCPKU. With these two types of platforms, the GSB is the first tenant of the Beijing center to use such cuttingedge instructional technology. While the GSB Boardroom and the enhanced classroom are designed to have two groups in different locations learning together, a Professors Studio is taking shape at the Knight Center, which will enable faculty members to teach to a single, remote group. In another development, the basement of the GSBs Serra East building is being converted into a recording studio for online education programs, which will be delivered through CourseWork and other video-based instruction platforms. The studio will have a static set as well as flexible sets with a greenscreen, studio lighting, and multiple cameras. Two editing bays are also under construction, along with a screencasting room to capture program tutorials that will enable users to have a self-serve learning experience. The school is investing in these new forms of instructional technology in order to serve a broader constituency while at the same time optimizing faculty time. It is anticipated that Executive Education programs as well as Stanford Ignite (formerly the Program in Innovation and Entrepreneurship) will be delivered through these new platforms, as well as the first class at the first experimental hub of the Stanford Institute for Innovation in Developing Economies in Nairobi, Kenya, which will use a mixture of online and inperson instruction.

$13.7 million
Total of unrestricted gifts from 6,978 donors

Your Vital Role

Thank you for your investment in the Business School Fund, which is helping the GSB prepare students to lead lives of meaning and impact, investing in the faculty members who are compelling teachers and path-breaking researchers, and keeping alumni connected with each other and the school. Unrestricted gifts enable the GSB to undertake innovations that enable the school to evolve and reinvent itself in order to remain a leader in the field of management education.

A gift to Stanford is a highly leveraged one in that it makes it possible for the next generation of leaders in those same and other organizations to receive the training and education they will require to take care of the problems of the next generation.
Jo Ivester, MBA 81
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