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As state funding decreases, push for private funding increases
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Dwindling state funding has lent a new significance to the push for private donations at UC Berkeley and throughout the UC system.
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 [email protected].
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