Report: How research universities can overcome funding shortfalls

Communicating cost-saving initiatives to the public is key

Public research universities cannot rely on tuition anymore, but rather must lean more heavily on a mix of state, federal, and especially private resources, according to a new report from an American Academy of Arts and Sciences initiative. 

The report is the last of five produced by The Lincoln Project: Excellence and Access in Public Higher Education, led by former University of California, Berkeley chancellor Robert Birgeneau and former University of Michigan  chancellor Mary Sue Coleman.

About four million students are enrolled in public research universities, which are often the largest school in their states and enroll many of the brightest in-state students. Yet since 2000, state funding fell from 32% to just 18% of total funding per full-time student.

"As a result of these cuts, public research universities have been forced to make difficult choices about institutional priorities" according to the report. "They have reduced expenses and raised tuition. For the moment, they have maintained their educational and research missions. But this trend is not sustainable."

The paper calls for states to reinvest in higher education and work with the federal government to build tax incentives that encourage private businesses to donate funds for scholarships.

The report included several initiatives for businesses to pursue, including vocalizing the importance of healthy public colleges and donating to endowments.

Meanwhile, the report encourages colleges to align themselves with other institutions to cut expenses, make it easier for businesses to use school research, and publicize annual fiscal targets. 

Communication is key

Schools must also work to change the public narrative surrounding higher education spending, write the authors. Many people believe that college costs are climbing due to extensive student facilities and administrators' salaries, but studies have found that state disinvestment is a bigger driver of tuition spikes. 

"One of the things that we suffer from in higher education is not doing our communication as well as we need to," Birgeneau says.

It may help to highlight successful cost-saving initiatives, such as Maryland's Effectiveness and Efficiency Initiative, which saved $356 million over 10 years. 

Alternative fundraising 

While some universities successfully completed multibillion dollar donation campaigns recently, those funds are often earmarked for specific uses and can't be used to ease other funding shortfalls.

Schools should pursue private companies, the report says, citing Georgia Research Alliance as a successful example. The alliance is a group effort among many regional colleges and the state development agency. Since 1990, the group has turned the state's $600 million investment into about $3 billion in federal and private investment, about 6,000 well-paying jobs, and 150 companies (Zinshteyn, Hechinger Report, 4/7). 

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