Virginia Tech collected more than $162 million in donations and commitments in the last fiscal year, blowing through its previous record of $101.45 million. Almost 35,000 donors, up from 32,000 the previous year, gave money, reports the Roanoke Times. The money will help the Virginia Tech Foundation meet its goal of growing its endowment to $1.6 billion in the coming years. The endowment at the end of the fiscal year was $843 million.
“We asked our alumni and friends to help Virginia Tech have a bigger impact on the world. Their response makes it possible for us to grow as a global university, launch new programs, serve more students and communities, and create productive environments for learning and research,” Tech President Timothy Sands said in a written statement.
Bacon’s bottom line: I’m of mixed minds. On the one hand, state support is inconsistent. Given past history, Virginia Tech has every reason to fear future cuts. No one can blame the university for trying to buffer itself from budgetary vagaries. Further, I’ll say that Tech has done a better job than Virginia’s other research universities of restraining its tuition increases. I’m not sure how Tech did it, but the university has managed to grow its research base without shifting costs to students as sharply as peer institutions have done. Finally, plowing money into Tech augments its ability to function as an economic-development engine for Southwest Virginia.
On the other hand, building big, fat endowments shifts power within the university to the school administration by insulating the feudal empire of presidents, deans, deanlets, provosts, assistant provosts, and associate assistant provosts from market forces (collecting tuition from students), oversight (the General Assembly), and even the faculty. As Benjamin Ginsberg argues in his 2011 book, “The Fall of the Faculty,” big endowments free the administrative bureaucracy to pursue its own inward-looking agenda, which creates little value for anyone but the administrators themselves.
“Fund-raising represents a more attractive income source than tuition,” Ginsberg writes.
To administrators anxious to generate new revenues, an increased emphasis on fund-raising usually seems a far more attractive strategy than seeking additional tuition dollars. Fund-raising is almost entirely under the control of the administration and requires minimal, if any, faculty involvement. …
Today, thanks to schools’ major emphasis on development, gifts to colleges and universities total about 40 percent of their tuition income. … The larger the endowment, the greater the power and independence of the school’s administration. Perhaps this notion helps to explain why many schools — particularly the wealthiest — hoard the earnings from their endowments, reinvesting a large fraction of their annual endowment income so that their endowment and future income will grow.
I’m not suggesting that the critique necessarily applies to Virginia Tech, which has a relatively modest endowment — but it might. Ginsberg describes a behavioral trope common to the richest institutions that must be guarded against. College development officers are wizards at cultivating a sense of tribal loyalty among alumni (football, basketball, reunions, pageantry, rah! rah! sis-boom-bah!) and crafting sales pitches to maximize giving. Alumni are ripe for the picking, for they typically have no source of information other than what administrators spoon feed them.
A humble proposal: Someone should publish a “Virginia Tech Alumni Donor’s Guide” (and like publications for other institutions) which compiles a wide array of data regarding institutional performance. This series of guides would include data available through the State Council of Higher Education for Virginia (SCHEV) website and other sources documenting, just for starters, the history of tuition increases, student fees, student indebtedness, administrative staff ratios, faculty ratios (tenured-track versus instructors and adjunct faculty) and various financial indicators. One set of indicators would describe how the university is administering its endowment. What percentage of income is spent on programs, and what percentage is reinvested to grow the endowment?
Perhaps an organization such as Partners 4 Educational Excellence @ EDU, a sponsor of this blog, would find value in such an exercise. Just a thought, guys!
