In an era when public and private institutions unabashedly scramble for government money, Wake Forest University has abided by the custom of declining federal financing for permanent structures.

This prohibition against a certain type of federal aid stems from the university's formal ties to the Baptist State Convention of North Carolina. Baptist officials felt that it was proper for Wake Forest to accept money for research and other services to the government but that, in keeping with the principle of church-state separation, federal funds should not be accepted for buildings.

Now, however, the 145 year old university is seeking not only greater flexibility in attracting and using money from outside sources, including the federal government, but also, more broadly, to gain substantial independence from its conservative religious founders.

Dr. James Ralph Scales, president of Wake Forest, said the growing separation of his university from the Baptists is a "local manifestation of a regional phenomenon" in which "major sociological divisions" have become more evident and traditional restrictions are lessening.

"They [university officials] are admitting that it [Wake Forest] is not as Baptist as it once was," said Dr. Mark Corts, president of the Baptist State Convention, a Raleigh-based umbrella organization for North Carolina's 1.1 million Baptists, the state's largest denomination.

There have long been tensions between the convention, which is said to be divided into "conservative and more conservative" factions, and the university in Winston-Salem. For example, William Louis Poteat, university president from 1905 to 1927, defended the freedom to teach theory of evolution against the opposition of conservative Southerners.

During the civil rights movement, members of the predominantly white Baptist convention were not always pleased that some people on the Wake Forest campus spoke out for racial change.

Despite the tensions, Wake Forest has prospered. It now has an enrollment of 4,900 students, with a substantial number from outside North Carolina, and non-Baptist. The university operates a law school and the Bowman Gray medical school. A 1976-77 study of the 46 schools, including Baylor University and the University of Richmond, affiliated with the Southern Baptist Convention, ranked Wake Forest first in eight of the 11 categories studied.

Though the underlying friction between academic freedom and religious orthodoxy is the principal issue, two specific incidents have come to symbolize the widening gap between Wake Forest and the Baptist.

In February 1977, Hustler magazine publisher Larry Flynt appeared on campus, provoking a storm of protest among Baptists. President Scales said the Flynt appearance was allowed under the university's "open platform" policy. Corts said the Flynt incident served to illustrate an "increasing lack of concern for Christian ethics (and) an increasingly secular view of life."

Later in the same year, a dispute arose over a $300,000 grant from the National Science Foundation, with $85,000 to be used to construct a biology department greenhouse. The Baptist convention voted to instruct the university to spend the money for some other purpose. But the university trustees refused to follow the instructions, though afterward in a conciliatory move they added $85,000 to the research budget.

Wake Forest's annual budget of $50.4 million includes about $12 million in federal funds. At least 80 percent of that federal money goes to the medical school. Scales often has cited the inconsistency of the Baptists allowing the medical school, but not the main campus, to use federal funds for construction.

The state Baptists' annual contribution to Wake Forest is $936,000. Significant control comes with it.

Noting that 19 federal agencies exert some influence over the university, Scales said he was "bothered by intrusions of government" and was happy with Wake Forest's policy of "minimum involvement". But, insisting the university must be free from outside constraint in order to obtain necessary grants, he added, "the mainstream of scholarship is fed by governments at all levels, federal, state and local."

For more than a year, university and Baptist officials have engaged in negotiations aimed at developing a new relationship. Several committees of the church and the university have agreed on a plan to loosen ties. That plan will be presented to the Baptist convention this fall. Baptist leaders predict approval.

Under the proposal, the Baptists will no longer guarantee the school its annual grant of nearly $1 million, though individual local churches can contribute to Wake Forest if they choose. In giving up the money, the university will get more autonomy, including the right to select 12 of its 36 trustees from outside North Carolina and from among non-Baptists. Currently all 36 trustees are North Carolina Baptists.

The language of the proposed agreement says that the outside trustees should be Christians. Scales said he hoped that the wording of the final version would permit anyone from the "Judeo-Christian tradition," so that Jews could be eligible to become trustees. The university has long accepted Jewish faculty and students and founded an ecumenical institute bringing together Baptists, Catholics and Jews.

Corts, however, said he favored the provision for Christian trustees.

"How can a man fulfill the mission of Christian higher education if he does not believe Christ is Christ?" the Baptist leader said.

The Baptist leader said he wished Wake Forest to remain "clearly committed to a Christian life view" and to select faculty and teach students from that perspective.

For his part, Scales said that a university must select faculty on the basis of merit and that Wake Forest's freedom and independence cannot be "endangered by the actions on the convention floor."

"We still want the value of a church relationship," said the Wake Forest president. "At the same time we want the people of the churches to know that we have special problems in these times . . . There have always been those who fear the scholar . . . We have always been in the advance guard."