Posted on September 1, 2006

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Public Colleges, Universities Increasingly Seek Private Funding

Faced with dwindling state aid, public colleges and universities are learning that raising private funds and growing their endowments is crucial to their survival, the Kansas City Star reports.

According to the National Association of State Universities and Land Grant Colleges, state aid to higher education has dropped by about a third over the past twenty-five years, and tuition hikes alone have not been sufficient to cover cost increases. Wary of putting a college education beyond the reach of moderate- and low-income students, public schools increasingly are turning to alumni, corporations, foundations, and other donors for funding, in addition to stepping up their fundraising appeals, increasing the size of their development staffs, hiring professional money managers, and using the Internet to raise funds.

Many public institutions also have turned to venture capital and hedge funds in their quest for higher returns, higher education officials said. "[W]ith dwindling support from the state, we may no longer be all that different from a private institution," said John Amato, vice chancellor of university advancement at the University of Missouri-Kansas City.

For most public institutions, notes Dale Seuferling, president of the Kansas University Endowment, success begins with a healthy endowment. The steady income from such a robust endowment helps colleges and universities attract and keep faculty, advance their academic programs, pay for better equipment and facilities, and recruit a more diverse student body. At the end of the day, added Seuferling, there "is no such thing as too much endowment."

Williams, Mara Rose. “Public Schools, Private Funding.” Kansas City Star 8/31/06.

Primary Subject: Education
Secondary Subject(s): Higher Education
Location(s): National

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