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Survey shows increased reliance on private donations to fund public universities

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FEBRUARY 20, 2012

A survey released Wednesday shows an increase in private donations toward public universities, indicating a shift toward a funding model that seeks to fill the gaps left by large cuts to state funding with an increased reliance on philanthropy.

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.

FEBRUARY 21, 2012

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