The University of Illinois has received its largest-ever donation — a $150 million gift — from the head of a Chicago private equity firm, school officials announced Thursday.

The gift from Larry Gies, chief executive of Madison Industries, and his wife, Beth, means the university’s business school at the Urbana-Champaign campus will now be known as the Gies College of Business. School officials confirmed the $150 million gift was the largest gift in Urbana-Champaign history.

The donation comes as the University of Illinois system embarks on an ambitious, five-year multibillion-dollar fundraising drive across its three campuses in the wake of the state’s recent budget impasse that has drastically reduced the system’s state funding.

“We are incredibly grateful and proud to have two successful U. of I. graduates reinvest in the very place where their entrepreneurial journey began. This ranks among the largest gifts to any business school in U.S. history,” Jeffrey R. Brown, dean of the College of Business, said in a news release announcing the gift.

The donation from the Gies family will be used to create graduate programs and use “technology to democratize education,” according to school officials. One example is the business school’s iMBA program, a master’s program started in January 2016 that is conducted entirely online and costs about a third of what equivalent degrees cost, school officials said. The university sees it as a way to reduce barriers to geography, cost and access, officials said

Urbana-Champaign Chancellor Robert J. Jones stressed that the emphasis of the gift will be on expanding the business school’s programming and scholarships rather than constructing new campus buildings.

“This is not about brick and mortar,” he said. “It’s about investing in scholarships, investing in opportunities for our students to get the most amazing experiences inside and outside the classroom,” Jones said.

“This investment will give us that additional installment of resources that’s necessary to move the business school to the next level of excellence. That’s what it’s all about.”

The Gieses’ gift is the second major gift to an Illinois business school this month. Another couple, Amy and Richard F. Wallman, donated $75 million to the University of Chicago’s Booth School of Business. Jones said these massive gifts aren’t competitions, but clear changes of how universities will fund themselves during trying economic times.

“It definitely is not an arms race to see who can make the most money,” he said. “More and more you’re going to see philanthropy as a greater part of the financial model for public universities as its always been a part of the financial model for private universities.”

Larry Gies founded what became Madison Industries in 1994. Over the years, it has acquired or started dozens of companies across a range of industries, with an emphasis on owning and operating them.

Gies, who was not made available for an interview, in a statement called his alma mater “a very special place.”

He graduated in 1988 with a degree in accountancy, while Beth, whom he met at the school and later married, graduated the following year with a degree in agriculture, university officials said. Larry Gies went on to earn an MBA from Northwestern University’s Kellogg School of Management in 1992.

“We are honored to give back to the college that gave so much to us, and I hope our choice to make a decisive investment encourages others to do the same,” he said in the news release. “This investment is, and always will be about the students here and what we can become together — the greatest business school on Earth, where purposeful leaders get the tools to pursue their passion to make the world a better place. I’m truly excited for our students and the future of our college.”

The gift also represents a commitment by the university to its business school even as other public universities are reconsidering offering the program. Wisconsin, for instance, recently backed off a decision to suspend admission of full-time students to its business school. And two other business schools, at the University of Iowa and Wake Forest University, have ended full-time MBA programs.

As for the University of Illinois, its new fundraising campaign comes on the heels of another drive that ended in 2011 and raised $2.43 billion for the system’s three campuses and the university foundation.

The new push also overlaps with another five-year plan to boost enrollment by 15 percent by 2021, adding about 12,150 students to the campuses. Despite statewide drops in student attendance across the public universities this fall, the University of Illinois added about 2,300 students to its rosters, primarily because of big increases at UIC.

Contributions would support student scholarships, endow positions for fellows, professors and deans, and fund major construction and renovation projects on the campuses, according to the university foundation website, which details the components of the school campaigns.

Chicago Tribune’s Dawn Rhodes contributed.

wlee@chicagotribune.com

Twitter @MidNoirCowboy

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