Two years ago when Edward T. Lewis took over the presidency of St. Mary's College, a small state-supported liberal arts school in southern Maryland, almost all the school's funding came from the largess of the General Assembly in Annapolis.
Private contributions to St. Mary's college that year were a scant $100,000. The members of the school's governing board were even less generous, donating a total of only $500. For the new public college president, fund raising was just not a part of the job description.
Now, faced with the reality of fewer state dollars and even less support from Washington, Lewis has taken to the fund-raising trail. He visits corporate board rooms of Baltimore and the Manhattan meeting rooms of philanthropic foundations, pressing his case that even public schools need private money.
"I'm spending two days a week doing private fund raising -- and we're a public college," Lewis said. "But the only way we're going to make dramatic steps is to get private money. We're dead in the water without private money."
Increasingly, cash-pinched public colleges and universities are looking to the private sector for contributions. Many are setting up foundations to keep private donations out of the control of state treasuries and their own public governing boards.
The results are apparent, with private money contributing a larger chunk of state college budgets. According to figures compiled by the New York-based Council for Financial Aid to Education, private contributions to state-supported colleges and universities in 1983 increased by 32.5 percent from the previous year. Private donors gave close to $1.5 billion to higher education that year, and more than32 percent of it went to public schools.
This trend to more private fund raising has served to alter drastically the role of the public university president, from a chief executive preoccupied with academic concerns and interdepartmental squabbles to a kind of virtuoso fund-raiser with political savvy and the ability to move with ease in the corporate world.
The public sector's venture into fund raising has caused new competition between public and private schools for scarce resources. It has caused state legislatures to revamp laws that hindered fund raising by public institutions. And it has provided the self-interested indignation with which the higher education community has attacked the Reagan administration's proposal to eliminate charitable deductions from the federal tax code.
But the more fundamental result of fund raising by state schools has been to obscure the once sharp distinction between private and public colleges. Already, private universities have come to rely increasingly on public support, from direct state subsidies to research grants and contracts to federal student financial aid. Some states give private schools a set percentage of the funds alloted for public schools. Maryland gives every private institution a state subsidy based upon its enrollment.
"The lines have been blurring between public and private," said Allan W. Ostar, president of the American Association of State Colleges and Universities (AASCU), which represents the nation's public and land-grant colleges.
"This is a very big issue in public education right now. Private institutions get a lot of their funding from public sources," said AASCU spokeswoman Mary Margaret Walker. "And just because we're called public doesn't mean we don't get money from private sources. Private sources are very important -- increasingly important -- for public colleges, because of tight state budgets."
The crossover has taken many forms. So pervasive is the public schools' scramble for private money that the national trade group of university business officers has begun holding workshops on "innovative financing."
"Survival is what it is," said Jack Cox, communications director of the National Association of College and University Business Officers (NACUBO). "If they don't do these things, they can't keep their doors open."
Public universities enter the fund-raising arena with some advantages over their private counterparts. The alumni base is huge for many public institutions. Also, public schools have been able to argue successfully that corporations draw most of their employes from the public school system and thus have more of a vested interest in donating to it.
The University of Michigan in Ann Arbor, the University of Texas system and the University of California system are among the public schools that have been in the fund-raising business for several years. Michigan received almost $49 million from private sources last year, accounting for 8.4 percent of its general budget.
Michigan is in the middle of a five-year fund-raising campaign aimed at raising $160 million from private sources, even as the state legislature contemplates deeper cuts in the higher education budget.
Private money supplementing state appropriations has served to heighten the prestige of these schools, educators said.
"You wouldn't have much of a university if these gifts hadn't come in," said Michigan's budget officer Robert Suave. "We'd exist as a university, but we'd be a much different university . . . . Any university ought to be out hustling the bucks."
The private schools, for their part, have begun to act more like the public universities in the quest for new funds. Private schools consistently have complained that public schools, with their heavy state subsidy, could keep tuition artificially low. This argument has gained potency as the Reagan administration has proposed cutting student aid.
The association representing private schools even has offered a plan for restructuring student aid, saying the aid should be more "price-sensitive" -- meaning weighted in favor of the more expensive private schools.
"It was always something of a gentlemen's agreement that the public purse was the domain of the public schools and the corporations were for the privates to tap," said Bill McNamara, spokesman for the National Association of Indepedent Colleges and Universities. "That line is getting a bit murky.
"These crossovers tend to blur the old characteristics between the public and private sectors. The lines are blurred, and the competition is getting tougher for private funds."