The University of Virginia is tapping its Strategic Investment Fund to create the Bicentennial Professors Fund, a $75 million plan to support about 70 endowed professorships, reports the Daily Progress.
The College of Arts & Sciences at UVa currently has 52 endowed professorships. Endowed chairs are used primarily to supplement professors’ salaries, recruit graduate students, and underwrite laboratory space. Such dedicated funding is a critical tool for recruiting star faculty and building institutional prestige at a time when UVa is competing for academic talent and elevate its standing as one of the top universities in the country.
“Endowed professorships have been a challenge to secure in numbers sufficient to reward our existing faculty and to help recruit the best new faculty,” Ian Baucom, dean of the Graduate School of Arts & Sciences, told the Daily Progress in an email.
“In my own career and in my role as dean, I’ve experienced first-hand how endowed professorships were the difference in our ability to retain or attract talented faculty members,” Baucom said. “The Bicentennial Professors Fund will help us build on our historic strengths and fuel our emerging, field-transforming research by ensuring we are highly competitive in the marketplace.”
Under the plan, the university will match half of every dollar in gifts of $1 million or more. For gifts of $3 million or more, the newspaper says, the Bicentennial Professors Fund will provide a “super match” of $2 for every $3 pledged. Thus, a $3 million gift would be matched with $2 million.
The Strategic Investment Fund was cobbled together from various reserves and special funds and handed over to the University of Virginia Investment Management Company (UVIMCO), where it can generate a higher investment return. Since February 2016, the fund has invested more than $307 million in strategic priorities such as $20 million for autism research, a research seed fund, addiction aid, infrastructure for behavioral research efforts, and an interdisciplinary research center to study cosmic origins.
Bacon’s bottom line: If the goal of the UVa administration and Board of Visitors is to attract star faculty and elevate the prestige of the university — and it is — then this is a necessary investment. The recruitment and retention of big-name faculty members is only getting more intense as other institutions throw more and more money into the academic arms race.
Let’s assume the university generates 6% to 7% annually on the $75 million in the Bicentennial Professors Fund and retains, say 3% to allow the fund to continue to grow and keep pace with inflation while withdrawing 3% to 4% to spend. That would create resources of $2 million to $3 million a year, or about $30,000 to $40,000 per endowed professorship. That should be a big help in recruiting and retaining the big names.
However, if UVa’s goal is to make the institution more affordable and accessible — a goal that is given lip service — then this is an opportunity lost. The money could have been used to build an endowment for financial aid. Or it could have been invested in re-engineering business processes to lower the university’s cost structure. For purposes of illustration, one could envision investing $75 million in HVAC systems, lighting systems, and rooftop solar and saving, to pick a reasonable number, $7.5 million a year in annual operating costs, which in turn could be used to moderate tuition increases.
Ironically, it is possible that recruiting more star faculty will have the effect of driving up costs. While UVa’s academic titans are funded in part by general tuition, they tend to teach few courses than the typical instructor and contribute little to the educational experience of the undergraduates paying the tuition.
Instead of competing with Ivy League institutions, why can’t UVa settle for becoming the best public university and providing the best undergraduate experience in the country? Those seem worthy goals, and reaching them would be an impressive achievement.
UVa responds: UVa spokesman Anthony de Bruyn responded to this post as follows:
In December of last year, the Board of Visitors established a permanent endowment of up to $300 million to support student scholarships through a combination of philanthropic support and the Strategic Investment Fund. Earnings from the Bicentennial Scholars Fund provide need- and merit-based scholarships for University undergraduate students, and also will relieve pressure on long-term tuition increases by funding need-based aid from this fund rather that from tuition revenue.
The University is also doing its part to identify cost savings across Grounds. The University’s Organizational Excellence program has identified $60.2 million in savings since the launch of the program in 2014. You can learn more about the program and associated initiatives here.
Bacon’s response to UVa’s response:
Yes, UVa has upped its commitment to financial aid, which does make the cost of attendance more affordable than it would be otherwise for the recipients. But that doesn’t do much for the middle-class and affluent families who still pay the full freight. De Bruyn said that funding from the Strategic Investment Fund helps alleviate the pressure to raise tuition in future years. Well, we’ll see about that. I’ll believe it when I see the Board of Visitors enact a tuition increase that’s less than the inflation rate.
As for the Organizational Excellence program, it is much to be commended. Kudos on the $60 million in savings. However, I would like to see an analysis of those programs. I would ask if any of them required substantial up-front capital investments. Could the university save even more by making large capital investments in efficiency? I don’t know the answer. But those are the kinds of questions we need to be asking.
Leave a Reply
You must be logged in to post a comment.