State Funding Cuts Leave Universities More Dependent on Private Donors

Reductions in state funding for higher education have left many universities scrambling for private gifts to fill budget gaps for basic operating costs, the Oregon Daily Emerald reports.

For example, less than 14 percent of the University of Oregon's total revenue came from state funds in 2003-04, compared to 32 percent in 1985-86, while tuition fees accounted for more than 33 percent of the university's budget, compared to 22 percent twenty years ago. Meanwhile, the University of Michigan has lost 12 percent of its state funding, or $43 million, over the past two years. According to UM spokeswoman Julie Peterson, state money now only accounts for 8 percent of the university's budget. "We can't rely on state funding alone," said Peterson. "It simply isn't enough."

As a result, many universities are stepping up fundraising to cover their basic operating costs. According to Kevin Hegarty, vice president and CFO of the University of Texas, 98 percent of the money raised by the university's last seven-year campaign was earmarked for specific purposes. "We're looking more to private funding to fund the basic operations of the university," he said. "It's not been the history of donors that they've been all that interested in that kind [of support]."

But because private donations, in many cases, are restricted, they often end up supplementing rather than substituting for state funds. "You can't repair a sudden leaky hole in the roof with money from a professorship or from a scholarship," said University of Oregon president Dave Frohnmayer, who recently announced $16 million in private donations to the university for two presidential chairs and a journalism program in Portland. "People aren't going to give for maintenance and custodial care. They want to give for something that puts audio-visuals in the classroom or makes the student lounge look better."

Jared Paben. "Building a Foundation." Daily Emerald 01/31/2005.