UVa Philanthropy Now Equals State Support

What would T.J. say?

The University of Virginia could reach a milestone this year: collecting more money from private donations than from the state.

At a Board of Visitors meeting earlier this month, Melody Bianchetto, UVa’s vice president for finance, told board members that a steady stream of philanthropic income is expected to provide more than $150 million in operating funds over the next years, reports Derek Quizon with the Daily Progress. That compares to the $150.5 million appropriated from the state General Fund to the University of Virginia this year.

Quizon asks an interesting question: If the trend of increasing reliance upon private over public support continues, what are the implications for how UVa is governed? Will the General Assembly lose leverage?

“You’re more responsive to the goals of the people who give you your revenue,” says Dustin Weeden, who analyzes higher-ed issues for the National Conference for State Legislators. “There are a whole host of concerns private donors have that are different from the goals of the state.”

Private donors tend to favor things like new facilities and research, which could benefit the state in other ways, but not necessarily in the way public universities traditionally benefit the state: with affordable undergraduate degrees for in-state students. “Public institutions can’t completely shrug it off,” Weeden said. “But I think they push for more autonomy and control over their own operations.”

Weatherford said UVa and William & Mary are experimenting with a new model — new for public universities in Virginia at any rate — that may allow them to keep costs low in the long run. They have the freedom to try this experiment because the state allows it, says Greg Weatherford, spokesman for the State Council of Higher Education for Virginia. “One of the best things about being in Virginia is they have the flexibility to try that,” he said.

Quizon also quotes me in the article, addressing the question of whether UVa might aim to become a private institution. Even if the shift to private philanthropy continues, I opined, I didn’t see the university seeking to transform itself into a private institution. “That impulse does exist — people would probably love to get rid of that General Assembly oversight and cut the strings — but at the end of the day, they want to be a state institution.”

Bacon’s bottom line: No question, passing the 50/50 milestone of philanthropic versus public funding has symbolic value, reminding everyone of the state’s diminished role in supporting the university. But that $150 million is still critical to the institution’s functioning. It could not be replaced by philanthropy in the short run, and it could not be easily replaced by raising tuition. The balance of power in the relationship between the university and the state doesn’t change. Unless UVa uses more of those philanthropic dollars to stabilize tuition, as opposed to building a grander, more prestigious institution of higher learning, they will rely upon state funding and legislators will continue to agitate against tuition hikes.

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5 responses to “UVa Philanthropy Now Equals State Support

  1. This is a trend that is likely to continue and isn’t specific to UVA. I think W&M crossed over (private exceeded state funds for operations) a year or so ago and VMI probably before that. I think schools like the University of Michigan and University of Texas at Austin are in a similar position. In the case of the above schools, all but Texas are drifting further away from state control.

    What this doesn’t cover is the state’s contribution to capital project funding, which is actually pretty substantial.

  2. Okay, whenever I see these things I suspect apples are being confused with oranges. Sometimes on purpose. The vast majority of state money for operations is focused on in-state undergraduate students, with some focused on graduate students. That would be operational dollars and financial aid. The philanthropic number cited might be focused on that, but then it might be institution-wide, including the hospital. Much of it goes to the graduate programs – Darden and the law school and the medical programs.

    Usually when the universities are complaining of state parsimony they also ignore capital expenditures. And of course in the case of UVA and VCU there are the Medicaid payments. Go back Jimbo and ask exactly how much money flowed from the state treasury to the entire institution and you may see a different number.

    If you have questions about the balance of power go check to see who owns many of those buildings on grounds – the taxpayers do.

  3. Steve is right that both state funding and philanthropy aren’t distributed evenly. Philanthropy is often notably directed to the few. If I recall correctly, UVA medical side has 30%+ share of the endowment income but relatively few students. I believe athletics has a large endowment and more or less serves only about 5% of the student population. I’m sure Law and Darden are well above the average as well. Darden and Law at UVA also operate largely as private schools in terms of funding. The undergraduate programs are much more dependent on the state contribution.

  4. The capital facilities is a legitimate issue but ….

    Find the best colleges without big sports programs.

    and/or find the best Colleges without on campus dorms…..

    both do exist… and do seem to have less capital funding issues…

    Private higher Ed doesn’t seem to need THAT many buildings to provide academics – Community Colleges seem to get the job done with far fewer buildings, no dorms.. and no big time sports facilities, not unlike most other OECD countries.

    Maybe the State should get out of the business of funding High Ed with pots of money in exchange for “less strict” Govt regulation and instead fund the individual student directly – but only for tuition…but little else unless they have exemplary grades and qualify on a means-tested basis AND are in a degree that leads to a real job in the economy.

    If the kid or his parents want “more” – then fine, figure it out on your own dime. Taxpayers are primarily funding – future taxpayers… any/all things kids aspire to be.. some of that actually belongs to the kid to earn…not a carte-blanche entitlement.

    Let the Colleges and Universities figure out who they want to be, what constituency they want to appeal to, and what they want to charge – and let students and parents make choices based on what they want and what they can afford and what they themselves want to earn towards it.

    I’m ALL FOR – higher ED … but we’re confused about what it ought to be. I want more taxpayers.. and less entitlement takers. I don’t want to fund one group to make big bucks.. and have the other group end up on entitlements.

    I want to see BOTH – employed…

    • Completely agree with your conclusions going forward. The State has a legacy capital investment in these schools that gives it some expectation of a say-so in the short run — not sure how to balance that.

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