EDITOR'S NOTE: This story has been changed from the original to include comments from Anderson School Dean Judy Olian and to clarify some points.

The UCLA Anderson School of Management has received final approval from University of California President Mark Yudof to convert its state-supported M.B.A. program into a self-supporting one, the school announced Thursday.

Yudof gave his approval in a June 24 letter to UCLA Chancellor Gene Block. The plan allows Anderson to avoid cuts in state funding by forfeiting state money for its M.B.A. program; that money will be redirected to other UCLA programs. For the academic year just concluded, state money comprised about 6 percent of Anderson’s overall budget.

In exchange, the Anderson School will have more flexibility in setting tuition levels and can pursue donations from foundations and other sources. So far, nearly $20 million has been pledged.

“We think philanthropy will go up,” said Anderson School Dean Judy Olian, “When we were receiving state funding, some people were confused and were reluctant to give. People will now realize that we are standing more on our own and we believe they will rally more to the cause.”

The plan goes into effect with the upcoming 2013-14 academic year. Olian said there would be no additional near-term tuition increases beyond those now pending before the UC Board of Regents.

The plan Yudof approved was a scaled-down version of the original proposal drafted three years ago, which called for the entire Anderson School to be self-sufficient. But opposition from some UCLA faculty concerned about financial risk to the university and tuition hikes forced Anderson leaders to make changes. They removed plans to allow the Anderson School to set faculty salaries and also limited the proposal to the M.B.A. program. The school’s small Ph.D. program and its limited offering of undergraduate classes will continue to receive state money.

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