UC System Seeks Unrestricted Donations to Increase Revenue

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In a time of continued diminishing state funding to higher education, the University of California has increasingly been looking to private donations as a source of support, but such private funding often comes with specific restrictions - something the UC is looking to change.

For the past decade, the UC has reached annual private donation levels of more than $1 billion, receiving approximately $1.3 billion last fiscal year and marking a stark contrast to the less than $400 million donated 10 years ago, according to the Annual Report on University Private Support. However, currently 98 percent of donations to the UC are earmarked, according to UC spokesperson Steve Montiel.

The UC Commission on the Future's final report, released Dec. 6, 2010, advised that encouraging donors to give more in unrestricted funds and emphasizing fundraising responsibilities at the campus level are necessary steps toward increasing alternate revenue sources. Strategies to reach this goal have begun to be implemented at a campus level, according to Montiel.

Though the university is seeking to accrue more unrestricted funds, Montiel said the UC's current practice of accepting earmarked donations is not flawed.

"The fact is that a lot of donors want their contributions used for specific purposes," Montiel said. "It's a matter of finding ways to build on that kind of support to try to attract support that would allow for more flexible use of funds."

While alumni gifts have bolstered funding in different areas across all 10 campuses, over the last decade heavy emphasis has consistently been placed on donations to health and medical centers. According to Montiel, health services generally receive approximately 50 percent of all philanthropic support given to the university. In the 2009-10 fiscal year, health services received nearly five times as much funding as liberal arts disciplines, according to the Annual Report on University Private Support.

Inequity in giving occurs at the campus level as well. In the first quarter of the 2010-11 fiscal year, UC Berkeley and UCLA both received upward of $50 million, while campuses like UC Merced and UC Riverside received less than $3 million, according to the Quarterly Report on Private Support for the first quarter of 2010-11.

At the campus level, private support is "the crucial factor that is allowing Berkeley to remain public," said Jose Rodriguez, manager of campaign communications at UC Berkeley.

Over the last 10 years, while many other campuses regularly received less than 10 percent of individual donations from alumni, UC Berkeley - and occasionally UCLA - consistently received more support from alumni than any other campus.

"If the vast majority of private donations are restricted, then it is very dubious that the university would be able to replace the loss in state funds with private donations," said Hans Johnson, a senior fellow at the Public Policy Institute of California.

However, since 2000, even the three campuses to receive the most in private funding rarely received more than 50 percent of individual private donations from alumni. The Campaign for Berkeley, a campus fundraising effort that has raised $1.9 billion since 2005, may have contributed to a boost in alumni funding in 2009-10, when 65 percent of individual support came from campus graduates.

Alumni at other campuses have also stepped forward with major contributions, including the recent $100 million given by Meyer and Renee Luskin, half of which funds the UCLA School of Public Affairs and half of which goes to the construction of a residential conference center and the creation of an endowment to support conferences that might otherwise have difficulty securing funding, said UCLA spokesperson Phil Hampton.

Montiel acknowledged that there is no expectation that private donations could ever come close to replacing state funding, particularly with tuition and state support still accounting for 90 percent of core education costs - including financial aid, employee benefits and salaries as well as equipment.

This is partly because public university alumni are often less likely to donate than their counterparts at private institutions, due to a perception that it is the role of the state to provide funding for public universities, according to Johnson.

While Montiel said the UC was definitely considering philanthropic support as another major revenue source, he emphasized, "private support is important, but that's not the answer."


Nina Brown covers higher education. Contact her at [email protected]

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