The Private Public University: How the UO fulfills its public mission with private dollars
They are standing among opulence. Mom and Dad are there, maybe a younger sibling and of course the prospective student, the high schooler weighing his or her options for where to spend the next four or five years. They are in the north lobby, where the campus tours start. Look to your left, digital pillars glow on the eastern end with the records and accolades of Oregon in text and images. Look right, above the stairs, you’ll meet the wooden faces, hewed from a Crimson King Maple, gazing at the visitors. This is Ford Alumni Center — part office building, part art museum.
There’s a corner office on the second floor. The view is dominated by Bean Complex, squatting between two of the University of Oregon’s newest and shiniest facilities, the Global Scholars Hall and Matthew Knight Arena. This office belongs to Paul Elstone, assistant vice president of development.@@http://www.linkedin.com/pub/paul-elstone/b/7a8/64a@@ He used to have an office in Agate Hall, the old home of the Alumni Association and development. He likes the upgrade for his department and he likes what it represents.
“Part of the great thing about this building is that the alumni-University relationship begins even before you come to U of O. This building was designed specifically with that in mind, that even before you come here, even when you’re kind of thinking about coming here, we want students and families to know that this is a wonderful community. You come here and this is going to be a lifelong relationship that’s going to help you in your career, in your family, in your life.” @@http://www.uoregon.edu/findpeople/person/paul*elstone@@
That lifelong relationship and the money it brings through tuition and, later, private donations has become the lifeblood of the UO.
Elstone and the staff in the development office have a specific mission.
“Our job is to secure private support and private donors,” Elstone said. They establish trust and show alumni how their money could best go to help their alma mater. “Development really has become very important to what we do.” Every department and school at Oregon has at least one development officer, the bigger ones like the business school have several.
The scale of private money has changed how the UO functions — building new facilities is a prime example. The schools of music, business, education and journalism have all had significant renovations, expansions or new facilities built in the last decade through a formula of state bonds to match what the University can raise through its donors.
“That’s the typical model for most of the newer buildings,” Elstone said. “Some buildings have been more privately financed. The business school, when that was completed, was mostly private funds.”
The UO has always depended to some degree on the altruism of alumni, foundations, private businesses and Duck fans. Phil Knight has been a major contributor to Oregon since the ’90s; however, it was in 2001, in the middle of the dot-com bust, that former President David Frohnmayer @@http://frohnmayer.uoregon.edu/biography/index.html@@began Campaign Oregon, a hugely ambitious fundraising initiative. The goal was $600 million by 2008. In the end, the campaign raised over $858 million. The campaign led to the campus building boom and significantly increased the size of the UO Foundation, a nonprofit which invests money on behalf of the UO to bring in steady revenue every year.
“That does not mean we are becoming a private university,” Elstone said emphatically. “The public mission of the University remains absolutely foremost in what we do. President Gottfredson has said that our main goal is to remain one of the premier public research universities in the country.” @@http://president.uoregon.edu/biography@@
The UO must walk a fine line — maintain its public mission in the eyes of the state and Oregonians, but make enough revenue from private money to keep operating. Right now, a mix of private and public funds is critical to the success and survival of the University, but the generosity of donors is becoming more paramount.
It’s a ruthless cycle. The state cuts financial support for the UO and the UO raises tuition and private donations to compensate, which allows the state to slash more funding because the UO has proven it can survive.
“The state has continued to disinvest in the University over decades,” Elstone said. “Right now, the state provides about 5 percent of the University’s annual operating budget. So it’s up to donors to really help us figure out how to maintain the excellence of the University.”
It’s not just construction. With tuition jumping every year, many students rely on scholarships to keep them in college. The Giustina Foundation is funding 40 Presidential Scholarships a year; a $10 million gift from the Staton Foundation in 2001 is supporting more than 50 students every year; gifts from the Swindells Charitable Trust are funding 32 Willamette Presidential Scholarships every year. @@http://financialaid.uoregon.edu/staton_scholarship@@ @@http://www.swindellstrust.org/@@ @@http://e-v-giustina-foundation.idilogic.aidpage.com/e-v-giustina-foundation/@@
Elstone said this level of donor support is making the UO successful and competitive in Oregon and beyond, “In the state, we have … the lowest debt rates for students in-state. Many, many donors have made that happen.”
Increasing reliance on donations has its downsides. The Ducks football team has undoubtedly raised the profile of Oregon with potential students and donors, but an increasing number of gifts to the UO have been for the athletics programs over academics.
The mission of the UO is not to win games, it’s to provide education — but athletics are a critical part of University life and reputation. This is a case in point of donor money modifying the priorities of the UO. It’s the reason Knight and Nike are so often criticized for their roles in University life.
Just one of the basic drawbacks is that the UO has a strong incentive to stay on the good side of big donors like Phil Knight and Lorry Lokey. In 2001, when Nike was accused of using sweatshop labor in their manufacturing abroad, the UO came under intense pressure regarding its close affiliation with Knight. Part of the fallout from the conflict was Knight’s complete withdrawal from giving to the UO until Oregon was no longer a member of the Worker’s Rights Consortium.
Losing a pledge or endowment after it has already been factored into the finances of the UO can mean immediate and harsh consequences. What is the University supposed to do if a professor loses his endowment? What if a program has its funding cut because a donor feels it’s not meeting their intentions? What happens if a company goes under after already pledging millions to a construction project?
Maintaining relationships and trust with donors has become essential to the financial foundations of the UO. That’s not to say state support is much better. During the last legislative session, no bonds for construction were approved because of financial concerns. Instances of wavering state support could mean the UO will continue to rely more and more on private donors.