When public universities have to raise funds like private institutions

Last month Harvard University raised nearly $10 billion in a development campaign.  It was a tremendous sum of money, yet also within the realm of fund-raising we have come to expect from elite American private universities.

Elite public universities are not far behind.

As the Wall Street Journal reports, the University of Michigan (my alma mater) just raised $5 billion.  Meanwhile,

the University of North Carolina at Chapel Hill is trying to raise $4.25 billion, the University of Florida is aiming to raise $3 billion and the University of Illinois at Urbana-Champaign is targeting $2.25 billion…

A Michigan State University campaign that started in 2014 and is set to end at the end of this year has so far raised $1.74 billion…*

What does it take for a campus to attain such sums?  Serious institutional investments are required: staff and funding, what some include within the term “administrative bloat.” For Michigan, “its development office… now employs 550 people and coordinates 1,600 volunteers, and the school spent half a million dollars throwing parties to bring alumni together.”

What does it take for a society to support this kind of fundraising?  Simply put, the serious accumulation of wealth among the elite:

In 2015, the top 1% of donors gave 79% of total campaign funds raised, up from 64% in 2006, according to [the Council for Advancement and Support of Education]. Over that same span, the amount the top 10% of donors gave increased to 92% from 87%. At Michigan, the percentage of gifts over $5 million has climbed to 54% of the campaign from 34% of the campaign that raised $1.5 billion in 1997…

In the University of Michigan’s case, their campaign “includes at least four gifts of $100 million or more…”

So the economic elite tend to give to the academic elite, both in private and public post-secondary education.  The increasing stratification of American society is therefore echoed by the increasing distance of public universities from one another:

“You have public research universities launching multibillion-dollar campaigns and in the same state you’ll have small schools that are running bare-bones fundraising operations,” [Kevin McClure, an assistant professor of higher education at the University of North Carolina, Wilmington] said. “This is one of the mechanisms by which we’re seeing the financial stratification and separation of institutions in public higher education.”

The author of this Wall Street Journal article, Doug Belkin, reminds us of a key part of academic history that makes this new system work: states defunding public higher ed.

[U]ntil around 1980 it was generally accepted that the costs of public institutions would be covered mostly by taxpayers—with the rest picked up by tuition and research dollars.

But a cycle of funding cuts eroded that model. Recessions prompted cut backs by lawmakers who asked schools to make up the difference by raising tuition. When the economy sprang back, the state generally didn’t return as much to schools. As tuition grew, so did budgets.

At a very macro level I can’t shake the impression that we experienced a massive turning point in history around 1980.  That’s when income inequality began to grow for the first time since World War I.  This is when privatization became a new practice, first under Reagan, then his successors.  It may have been the birth time of neoliberalism.

Forty years later we now work with the results: privatized public higher education, escalating income and wealth inequality, increasing separation of post-secondary institutions.  These massive fundraising drives are the sign of those developments well under way.  How much further will we continue along this path?

Doug Belkin was also a fine Future Trends Forum guest this past May.

(This blog post is another installment of my reading paywalled content for you, dear reader.)

*On that MSU fundraising: “A spokesperson for the school said the money would not be used to pay the $500-million settlement reached earlier this year with the sexual assault victims of a school doctor.”

(thanks to Todd Bryant)

Liked it? Take a second to support Bryan Alexander on Patreon!
This entry was posted in economics. Bookmark the permalink.

Leave a Reply

Your email address will not be published. Required fields are marked *