In February 2012, the campus stood on the verge of capturing a $60 million grant from the Simons Foundation to launch a theory of computing institute. Its competition, several elite East Coast private universities, equated the problems facing the campus with a death spiral. Why, they wanted to know, would the foundation consider giving such a large sum of money to a campus that in a decade would be a shadow of itself?

Having been posed the question, UC Berkeley Chancellor Robert Birgeneau gulped as he sat across a table from the foundation’s decision-makers. Completely unprepared for such an assessment, he paused for a full 30 seconds before unleashing a 30-minute lecture on the ongoing vitality of UC Berkeley.

“I told them everything,” he said in an interview last week. “I told them about our public character, I told them about our comprehensive excellence, I told them about our financial aid strategy.”

UC Berkeley’s proposal, which drew from a variety of fields, including molecular and computational biology, and incorporated the star power of Nobel Prize-winning physicist Saul Perlmutter, won the grant, beating out top-flight private universities like Harvard and MIT.

This triumph is emblematic of the excellence UC Berkeley has achieved under the leadership of Birgeneau, who is stepping down this summer. Worldwide rankings place it among the top universities on the globe, it has maintained its status as the premier public institution in the United States and its faculty members and students continue to win the most prestigious awards academia offers.

But the success has come at a cost, to both UC Berkeley itself and the University of California as a whole. For many, the path charted by Birgeneau through the state’s disinvestment has threatened the fabric of the UC system and alienated members of the campus community. To some, it has gone so far as to jeopardize the very idea of the public university.

Because of its stature, UC Berkeley has a unique ability among the UC schools to generate revenue through fundraising, private partnerships and nonresident tuition dollars. In a two-day strategic planning meeting shortly after he took office in 2004, Birgeneau decided to capitalize on this advantage in order to maintain what he calls the campus’s “comprehensive excellence.”

But this strategy — a mixture of increased lobbying for federal research grants, a drastically expanded private fundraising enterprise and a sharp increase in out-of-state students that yielded unprecedented nonstate revenue for the campus — favored UC Berkeley ahead of the rest of the system. By leveraging UC Berkeley’s brand, Birgeneau set the campus apart from the other nine UC campuses.

“(Fundraising) is campus-driven: You’re always counting on the allegiances and often the heartstrings of the donors,” said David Blinder, who spearheaded fundraising efforts as the campus’s associate vice chancellor of university relations and vice president of the UC Berkeley Foundation. “Their affiliations are to the campus rather than to the broad, amorphous thing that is the University of California.”

In the last fiscal year alone, the campus has raised $408 million through programs like the Campaign for Berkeley.

UC Berkeley’s prestige gives it a leg up on the fundraising competition, and Birgeneau has not shied from exploiting this advantage — a policy with which Birgeneau, who says he values the Master Plan’s multitiered structure, sees no problem.

“Ultimately, the responsibility of the UC Berkeley chancellor is to ensure that Berkeley continues to set the standard for public education nationally and internationally,” Birgeneau said. “My first responsibility is to ensure that … California has at least one public institution that is as good as the very best private institutions and sets the standard for the world.”

Birgeneau further articulated his vision of UC Berkeley’s primacy in a 2012 white paper he co-authored that called for many decision-making functions to be devolved from the central Office of the President to individual campuses. Although he said the proposal was not intended to give UC Berkeley or any other campus special status, it strained the unity of the 10-campus UC system. Among many controversial points, the paper’s proposal to create decision-making boards specific to each campus opened the door to differential tuition between campuses — a proposal that was shelved by the university’s 2010 Commission on the Future due to concerns it would irreparably destroy the system’s nine undergraduate campuses’ equal-footing relationship.

In addition to being a coalition of campuses, the UC system is also a coalition of undergraduate and graduate institutions. At UC Berkeley, the relationship between undergraduate and graduate programs has struggled — and in some cases, this relationship has been severed almost completely.

In the face of state disinvestment, graduate programs have ratcheted up tuition rates and subtly pivoted away from the campus. Combined living and tuition expenses at the UC Berkeley School of Law now top $72,000 for California residents, placing it in the neighborhood of its private peers. Meanwhile, graduate programs in the sciences have increasingly looked to sponsored projects as a way to obtain research money.

“All of the attention in access has tended be on undergraduate education,” said Judson King, director of the Center for Studies in Higher Education at UC Berkeley.

In pursuit of financial security, the campus’s graduate programs have emulated the operations of their counterparts at schools like the University of Virginia. Virginia’s Darden School of Business, for example, has relied largely on tuition and fees to finance itself self-sufficiently for more than a decade.

“What a lot of places are doing is selectively quasi-privatizing certain schools, like law and graduate business schools,” said University of Virginia professor David Breneman, an expert in the economics and financing of higher education. “But they don’t like to talk — UVA doesn’t like to talk about anything but it being a public university — but we’re moving away from the meaning that it’s largely publicly financed.”

Instead, the reliance on student fees and donations has meant that graduate programs have come to look more like privately financed arms of a public university.

In order to demonstrate to donors that he was serious about maintaining UC Berkeley’s comprehensive excellence, Birgeneau fully committed the campus to his alternative funding push.

“First and foremost, it was important for our constituents to have the confidence that nobody was going to be retreating from Berkeley’s standards,” said Blinder, who left the campus for a similar position at The Scripps Research Institute this year.

But the focus on money created an atmosphere in which Birgeneau spent so much time away from UC Berkeley pursuing additional revenue that students and faculty members alike came to see him as aloof from the needs of the campus community. The tension came to a head during Birgeneau’s controversial handling of the November 2011 Occupy protests — an episode he said he regrets — when many in the faculty called for a no-confidence vote in his leadership.

Other policies also created conflict on campus. Operational Excellence, a cost-saving initiative that Blinder credited with demonstrating the campus’s commitment to financial efficiency to donors, often became a target for its layoffs that campus workers perceived disproportionately affected nonsenior management roles.

Increased admission rates of nonresident students became an equally frequent focus of campus dialogue. During protests, activists decried the immediate effects of the out-of-state influx while analysts considered the policy myopic. A recent paper co-authored by professors Bradley Curs of the University of Missouri and Ozan Jaquette of the University of Arizona found that increased enrollment of nonresidents at public research universities, including UC Berkeley, has limited socioeconomic and ethnic diversity.

“It undermines the university’s long-term case that it is a public university and needs public support,” said Patrick Callan, president of the Higher Education Policy Institute, who called the pursuit of nonresident students “expedient revenue-hunting.” “These things represent short-term solutions to long-term systemic problems that need to be worked through.”

All these policies and decisions, and the reactions to them, are manifestations of the fundamental tension that underlies Birgeneau’s term as chancellor. His nine years in California Hall have been at some level a prolonged dialogue on what it means to be a public university.

On the one hand, the 1960 Master Plan for Higher Education founded the UC system on the public ideal, according to which the population of the state invested in the education of its younger generations. This is the ideal that many faculty members and students aspire to and the principle that has guided the movement against state disinvestment of the past four years.

But as the state disinvested from the UC system regardless and UC Berkeley began raising money from other sources, Birgeneau has sought to maintain what he calls the “public character” of the university.

“Saying it’s a public university means it is available and accessible to all residents of the state depending only on their having the academic qualifications for admission,” King said. “The idea of public education is that it is available without regard to personal or family (financial) resources.”

By this metric, Birgeneau claims to have preserved public character. Although middle-income enrollment has decreased 9 percentage points from 2000 to 2010, 38 percent of UC Berkeley’s student body receives Pell Grants, and in December 2011, the campus implemented the Middle Class Access Plan, which caps parent contribution toward undergraduate education for students with family incomes of between $80,000 to $140,000.

Birgeneau’s appointment in January as the leader of the Lincoln Project — a three-year initiative organized by the American Academy of Arts and Sciences aimed at defining the future of public higher education — affords him a platform from which he can continue exploring higher education reform, this time on a national level. Though his methods have at times been controversial, his peers in public higher education refer to the successes of the campus during his tenure as the “Berkeley Miracle.”

Endorsing his work at UC Berkeley, the academy wrote in a press release announcing the move that Birgeneau “has launched initiatives at UC Berkeley that are the models for public colleges and universities elsewhere.”

Contact Jordan Bach-Lombardo and Curan Mehra at newsdesk@dailycal.org.

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Last month, business students were asked to hand-write thank-you notes to show their appreciation for the more than 4,400 generous donors who were able to keep their school open through millions of dollars in donations. Donations fund about one-sixth of the school’s operating costs, according to a statement from the school.

In the face of declining state appropriations, the campus has looked to rely more heavily on philanthropy, according to Associate Vice Chancellor for University Relations David Blinder. In 1987, the state funded 54 percent of the university’s budget. In 2012, the state only supplied 12 percent.

UC Berkeley still lags behind its private peers with an endowment of a little under $4 billion. Harvard, Stanford and the University of Texas at Austin all have endowments significantly larger than UC Berkeley’s. In the past year alone, Stanford raised $1 billion.

While the average UC Berkeley alumnus has a midcareer salary of $103,000 — just $2,000 less than his or her counterparts from Columbia University — far fewer tend to donate to his or her alma mater. Over the last decade, an average of only 9 percent of UC Berkeley alumni have donated to the school, compared to 21 percent of alumni across all private institutions that are members of the Association of American Universities.

According to Blinder, it’s a cultural problem.

The question isn’t whether UC Berkeley alumni are as successful or as proud of their alma mater. Rather, Berkeley alumni are not accustomed to donating to their alma mater, according to Blinder.

For alumni who graduated when tuition was only about $700, it can be difficult to connect finances to education.

“It’s taken us a while to get across how little of state funding we now get,” Blinder said. “We have smart alum, but it’s hard to get that message across.”

Haas’ development efforts, such as the thank-you letters, are one of the many programmatic efforts toward closing this gap through a cultural push toward philanthropy, Blinder said.

UC Berkeley donor Lee Goldstein said the university is attempting to approach fundraising more similarly to how private universities do.

“I think it’s all done more professionally than it was before,” he said.

However, with proportionally fewer resources to meet the needs of UC Berkeley’s massive alumni base, campus administrators in charge of fundraising find themselves less versatile than their private peers, according to Blinder.

For example, Princeton University holds multiple alumni reunions on the weekends preceding commencement.

“They take over the campus,” Blinder said. “But you just can’t do that sort of thing on Berkeley’s scale. Every weekend, there would be an enormous flow of people.”

Vice President for University Development at Columbia University Kathy Okun said the appointment of Nicholas Dirks, Columbia’s former executive vice president for arts and sciences, as UC Berkeley’s next chancellor bodes well for the campus’s efforts at bringing in more donations.

“We already feel his departure,” Okun said. “He is a very gifted fundraiser and always articulated the role of faculty well.”

Blinder said the university hopes to get faculty more involved with the fundraising process.

“It’s hard to say you need to come to a training session,” he said. “But I think it should be done in the future because there is going to be greater and greater need for deans to be fundraisers.”

At Columbia, the conversation about donations starts very early with its students.

“It’s about believing that you’re a real partner in your school — it should be a lifelong relationship,” Okun said.

Haas’ development office has looked to emulate that strategy. The office plans to not only increase the size of its donor population but also to focus heavily on young alumni, according to Haas Director of Annual Giving Laurent de Janvry.

“We want our donors to look at the changing culture of giving at Cal, but you have to do that while they’re here,” de Janvry said. “It’s important to keep them thinking about Haas and Cal, or else you will fall to the bottom of how people prioritize their philanthropies.”

Haas senior Sukhpreet Sembhi, one of the students who participated in Haas’ letter-writing campaign, said she hopes to one day give back to her university.

“UC Berkeley has provided me with the resources I need to be prepared for life after graduation,” she said. “I want to thank the school and more importantly provide other students with the support and network I was given during my time at the university.”

Alex Berryhill covers higher education. Contact her at aberryhill@dailycal.org and follow her on Twitter @berryhill93.

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The campus completed the unprecedented Hewlett Challenge two years earlier than anticipated by raising $110 million in private donations to be used for faculty chair-holders, their departments and their students.

Started in 2007 by the William and Flora Hewlett Foundation, the dollar-for-dollar challenge committed $113 million in endowment funds — the largest private gift in campus history — to the campus to endow chaired faculty positions. For each position that the campus funded, the foundation matched that amount.

The foundation’s website said the endowment was given to “help ensure that California’s preeminent public university remained competitive with the nation’s best private universities.”

David Blinder, campus associate vice chancellor of university relations, said the joint effort between the campus and foundation was a rallying point for UC Berkeley.

“(It was) a chance to celebrate and bring together senior leadership of the campus with key donors,” Blinder said.

Since budget cuts have reduced the amount of funding the university receives from the state, the campus has increasingly looked to private donations to replace lost funds. In addition to the Hewlett Challenge, the campus began an eight-year philanthropy campaign, called the Campaign for Berkeley, in 2005 to raise $3 billion in private funds. As of Aug. 31, the campaign has raised $2.6 billion.

Of the $113 million endowment from the Hewlett Foundation, $110 million is used to match funds raised for faculty positions, and $3 million has been set aside for the campus to establish a professional infrastructure to manage the endowment.

Each chaired faculty position requires funds of between $1 million and $1.5 million. The $1.5 million amounts are used to fund distinguished chairs whose works span multiple departments, according to Jose Rodriguez, campus campaign spokesperson.

Rodriguez said the Hewlett Challenge presented a special opportunity to go beyond the way a faculty chair is traditionally funded. The endowments raised through challenge are different because they support not only the faculty chair-holder but also the academic department and graduate students.

To date, 69 of the faculty chairs have already been appointed, with the remaining 31 chairs already established but awaiting appointments, according to Rodriguez.

“This challenge demonstrated a rare opportunity for a campuswide fundraising effort,” Blinder said. “It was across the campus that people stepped up and approached potential donors and established interest and personal connections.”

Contact Geena Cova at gcova@dailycal.org.

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Though Berkeley has engaged in major private fundraising campaigns for the last 30 years, not long before the first major one began in 1985, state funding accounted for roughly half of the campus budget. Currently, state funding represents just 11 percent of the campus budget, corresponding with a transition in the role of private funding from functioning solely as a safety net for when state funding is insufficient for big projects to supporting more central campus needs.

“Fundraising provides an extra padding, or margin of excellence, on top of state funding,” said C. Judson King, director of the Center for Studies in Higher Education at UC Berkeley. “What has changed is that the pad has become larger and the base of state funds smaller. Private funds are indeed taking some of the roles that state funds used to cover completely.”

According to statistics from the Voluntary Support of Education survey, UC Berkeley raised $283.35 million in donations in 2011, the 18th-largest amount among schools in the United States.

To date, the campus has engaged in three primary private fundraising campaigns. Keeping the Promise, which ran from 1985 to 1990 and raised $469 million, and the Campaign for the New Century, which raised $1.44 billion between 1996 and 2000, collected the most money any public school had up to that date.

Now, the campus is nearing the end of its biggest campaign yet. The Campaign for Berkeley, which began in 2005 and is set to end in 2013, has raised $2.6 billion of a $3 billion goal as of Aug. 31, according to campaign spokesperson Jose Rodriguez.

Overall, in private funding, Berkeley remains behind UCLA and UC San Francisco, which were ranked eighth and ninth in the survey and garnered $415.03 million and $409.45 million, respectively, in 2011. And all three high-earning UC campuses remain far behind private universities like top earner Stanford University, which received $709.42 million in donations in 2011, compared to Berkeley’s $283.35 million.

The survey found that private contributions to colleges and universities across the country increased by 8.2 percent in 2011, with $30.3 billion in donations overall.

Though the UC system fares very well against other public schools, individual campuses’ inability to compete with fundraising numbers from elite private schools like Stanford has made schools like UC Berkeley vulnerable to losing faculty to higher-paying institutions.

“At all levels, UC faces increasing competition in recruiting and retaining high-quality faculty as disparities in compensation with UC’s competitors, especially elite private universities, increase,” reads the university’s 2012 Accountability Report.

According to Associate Vice Chancellor for University Relations David Blinder, who is the campus’s main administrator in charge of fundraising, private funding plays a key role in positioning UC Berkeley as a competitor with larger private institutions.

“The private gifts that we bring in, especially when they are permanent gifts in the form of endowment gifts, gives us an important position in that competitive landscape with our peer institutions,” Blinder said. “When you look at Berkeley peers, it really is the private schools like MIT, Stanford and Ivy League schools.”

Private funding has played a particularly important role in funding the creation of endowed faculty chairs, according to King.

The largest example of this in recent years has been a $110 million gift from the William and Flora Hewlett Foundation awarded in 2007 that aimed to create 100 endowed faculty chairs. Likewise, the Campaign for Berkeley intends to apply $390 million of its total to creating additional chairs.

Still, the transition to additional reliance on private funds has been one of the university’s more contentious moves.

Critics of increased reliance on private funding are concerned by the impact it could have on the character of the university as well as the long-term feasibility of relying on private money.

In 2004, the UC, CSU and then-governor Arnold Schwarznegger announced the Compact for Higher Education, calling on the UC and CSU “to seek additional private resources and maximize other fund sources available to the university to support basic programs.”

The Academic Council of the University of California Academic Senate passed a resolution in October 2005 asserting that the university’s work to seek private funds to augment state cuts could alter “its academic and public service missions with impacts that are not fully understood.”

King said this kind of funding also raises issues for researchers who receive private funding from companies.

“The question is, what is the person thinking of when they shower?” King said. “Is it the university or the company? Greater and greater dependence on private sources affects the university. The trick is using them in ways that don’t significantly affect the essential character of the university.”

According to Blinder, a donation from a business to fund research benefiting that business does not fall under what the university classifies as philanthropy. Donations from companies are strictly monitored, he added. He said the objective of private fundraising for the campus is to create a long-term support structure rather than replacing lost state funds in the present.

“This is not about making Berkeley a private institution,” he said. “But it is clear that private fundraising, whether you see it in terms of tuition or private philanthropy or research funding, is going to be more and more what constitutes our financial resources.”

Jamie Applegate covers higher education. Contact her at japplegate@dailycal.org.

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The Voluntary Support of Education survey conducted by the Council for Aid to Education found that charitable contributions to colleges and universities across the country increased 8.2 percent in 2011, reaching a total of $30.3 billion in donations. UC Berkeley — which ranked in the top 20 earners along with UCLA and UC San Francisco — has increased its efforts toward raising private funds through a campaign emulating those of private universities.

David Blinder, UC Berkeley’s associate vice chancellor for university relations, said that with state funding having dropped to a total of $220 million this year, funding from private donors has become an important part of the way the campus funds itself.

UC Berkeley ranked 18th in the survey, with a total of $283.35 million in donations in 2011.

“Tuition is now a major source of revenue in a way that historically it wasn’t for public colleges, as well as philanthropy,” Blinder said. “Philanthropy was always key in the private university world. That was their life blood, whereas we had traditionally relied on public support. We did need to learn from the privates.”

In 2005, the Campaign for Berkeley was created with the goal of raising $3 billion by 2013, in order to channel funds toward undergraduate scholarships, faculty chairs and research, among other endeavors. Campaign spokesperson Jose Rodriguez said $2.34 billion had been raised as of Dec. 31, 2011.

A similar five-year fundraising campaign at Stanford University — The Stanford Challenge — raised $6.2 billion upon its conclusion in February, enough to build or renovate 38 buildings, provide funding for 139 new endowed faculty positions and create 366 new graduate fellowships.

Stanford ranked first in the survey’s list of top fundraising universities, with a total of $709.42 million in donations received in 2011.

Despite the increasing importance of private funding, UCLA spokesperson Phil Hampton said it should not be seen as a major solution for tight budgets. UCLA ranked eighth in the survey as the top fundraising public university, garnering $415.03 million in support in 2011.

“It’s important to know that private giving cannot be seen as a replacement of state funding,” Hampton said. “Most gifts come with restrictions and are intended for specific uses — uses that aren’t funded by direct state support.”

Private support for university needs that are not funded directly by the state — such as endowments and capital projects — increased 13.6 percent in 2011 and “follows declining or stagnant levels of giving in recent years,” the survey states.

Private fundraising might be more difficult for public universities to engage in because of a lack of alumni awareness of a need for such funding, according to John Douglass, a senior research fellow at the Center for Studies in Higher Education at UC Berkeley.

“The fact is it will be very difficult for nothing but the name-brand, elite public universities to generate large donations to help subsidize the operating costs of the vast majority of public college and universities,” Douglass said in an email. “The alumni of public institutions on average come from less affluent parts of society and have less to give.”

However, Blinder said that much of the success of UC Berkeley’s fundraising campaign has been motivated by an increasing awareness on the part of donors that public universities need more financial support to replace lost state funding.

“For a while, it was difficult to get that message across,” Blinder said. “We are a state university, and we’re committed to the mission, but at this point, the figure is that just over 10 percent of our budget is coming from the state.”

Jamie Applegate covers higher education.

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