Public colleges tap private funds as state support dwindles

July 2, 2011

As state subsidies for higher education are dwindling, public colleges in the Washington region and elsewhere are learning they must tap private funds to survive.

Fundraising by George Mason University rose from $3 million in 1990 to $32 million in 2010, according to an industry survey by the Council for Aid to Education. After adjusting for inflation, that amounts to a nearly four-fold increase.

The survey showed donations to the University of Maryland Baltimore County surged from about $1 million to $8 million in that span. Towson University’s fundraising climbed from $1 million to $6 million.

Such fundraising campaigns, echoed in other states, come as legislatures across the nation are cutting higher education budgets.

Per-student state funding has dwindled from $8,035 in 2000 to $6,451 in 2010 nationwide, in inflation-adjusted dollars, according to the State Higher Education Executive Officers.

The trend has spawned dark humor. Public colleges, some in the field say, have evolved from state-supported to state-assisted to state-located.

“We are at, in the current fiscal year, the lowest funding level in 30 years. And it’s clearly going to get worse,” said Dan Hurley, director of state relations and policy analysis at the American Association of State Colleges and Universities.

Young, ambitious state institutions such as George Mason are playing a desperate game of catch-up against an elite group of older universities with billion-dollar endowments and a long tradition of giving. Johns Hopkins University, Georgetown University and the University of Virginia each raise hundreds of millions of dollars a year. Even the flagship University of Maryland, a relative upstart, took in $87 million in fiscal year 2010.

Legislatures are shifting the cost of college to students: public university tuition has nearly doubled nationwide in the past decade.

Most public colleges have relied on state funding and student tuition for nearly all their revenue. Now, they are looking to build other funding sources, turning to private donors with unprecedented vigor.

Flagship public universities are insulated against the state funding losses, partly on the strength of massive fundraising operations. Even before the decline in state funding, the University of Virginia drew only one quarter of its revenue from Richmond.

Other state institutions are more vulnerable. State cuts drove Virginia Commonwealth University to an unprecedented 24 percent tuition increase in 2010. George Mason hasn’t raised faculty salaries in three years. Around the region, state universities are hiring fewer tenure-track professors, allowing class sizes to grow and pressing student lounges into use as teaching spaces.

George Mason, a onetime U-Va. branch campus that gained independence in 1972, relied on the state for 60 percent of its operating budget as recently as a decade ago. Today, that share has fallen below 30 percent. Per-student state funding has dropped from $5,319 in 2001 to $3,238 in 2011, in constant dollars.

Twenty years ago, “fundraising in any aggressive way was simply not on the radar screen” of regional state universities and younger research universities, said Gary Rubin, vice president for university advancement at Towson.

The typical college raises private dollars largely from a small group of wealthy and older alumni. Plaques on ancient campus buildings bespeak the tradition of giving.

But up-and-coming state colleges have no tradition to tap. The average George Mason graduate is 42, and few are over 60. Half of the alumni of UMBC, founded in 1966, graduated in the past 15 years. Towson and James Madison transformed from small teacher colleges into comprehensive state universities in the 1960s. None of the schools have much experience with university-wide fundraising campaigns.

Younger alumni are often eager to give. But most of them are not yet in their prime giving years.

“We’re really young, and our alumni are really young,” said Lisa Akchin, associate vice president of UMBC.

Fundraisers have been forced to find ways to connect with youthful alumni.

When George Mason officials set about building up their fundraising operation four years ago, they realized they had never held an alumni weekend. They pitched the annual event to an audience of 30-somethings and young parents, with a craftsman beer-tasting table and a face-painting booth.

Fundraisers have learned to communicate with younger alumni via personal e-mail rather than form letter, and by cellphone instead of land line. George Mason and VCU have parlayed NCAA basketball tournament success into donations; George Mason alumni are reminded to give by announcers at games.

It’s not hard to sell young alumni on contributing to their ascendant university.

“This is a place where new ideas, good ideas, all get heard, get listened to, get acted upon,” said Jimmy Hazel, a 1984 George Mason law graduate who is active in fundraising.

Despite dramatic fundraising gains, younger state universities still lag behind some more-established schools in alumni giving. George Mason raised about $1 million a year from its alumni in fiscal 2010 and about $31 million from other sources, chiefly corporations, according to the industry survey. U-Va. raised $48 million from alumni and nearly $200 million from all private donors.

Fundraising is accelerating at public colleges nationwide in response to dwindling state revenues.

Two or three decades ago, public flagship universities lagged behind private national universities in fundraising, according to John Lippincott, president of the Council for Advancement and Support of Education. Their leaders counted on generous state subsidies, and most alumni assumed their alma maters could get along without private support.

Today, billion-dollar fundraising campaigns are the norm among public flagships, and other public colleges are learning the game.

“I’d say the public regional institutions are now trying to catch up with the public research institutions, which have demonstrated that they can be as successful as the private institutions,” Lippincott said.

The University of Mary Washington, a onetime public women’s college that split off from U-Va. in 1972, is about to embark on a $50 million capital campaign, the second in its history.

In the school’s brief lifetime, the share of its revenues coming from the state has slipped from more than 80 percent to about 20 percent.

“This will be a stretch for us, to try to raise $10 million a year,” said Torre Meringolo, vice president for advancement. “But I think we can make a case for it.”

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