‘Privates’ Fearful of Huge Public College Fund Drives

Presidents of privately run colleges and universities in California speak wistfully of a gentlemen’s agreement during the 1960s: they would not bother the Legislature for money if their counterparts at state universities would restrict fund raising to alumni and traditional corporate friends.

But that pact died and now is being buried under an avalanche of fund raising by public institutions of higher learning to pay for what they say is a backlog of building projects and academic improvements. The University of California, Berkeley, for example, recently launched a $320-million drive and UCLA is nearing completion of a $300-million campaign.

A few years ago, such large figures would have been unthinkable. As a result, some educators worry about whether there is enough philanthropic money to meet both sides’ needs and whether private schools are beginning to lose the contest to the public schools.

“All the privates are feeling tremendous pressure from the fund raising by the publics,” said Richard Kriegbaum, president of Fresno’s Pacific College, a 1,100-student liberal arts school affiliated with the Mennonite Brethren Church. “It would be a lot cleaner and neater if the state Legislature would have the courage to set tax levels so that Berkeley can get what it needs.”

“It is a cause for concern, certainly,” said Frank Balz, executive director of the National Institute of Independent Colleges and Universities, of the increased reliance by public universities on private dollars. “You can argue that the pie just grew or you can view it as money lost to private schools.”

Much of the change, officials said, is the result of limits in state budgets such as the 1979 Gann Amendment, which tied growth in state government spending in California to inflation and population. So public universities are getting more aggressive in asking their alumni for donations. Also, the public universities’ pool of affluent and sentimental alumni has grown dramatically as the baby boom generation ages.

But at the same time, public schools have become more adept at gleaning donations from corporations and foundations.

Corporate Giving Rises

Corporate aid to higher education was more than $1.5 billion in 1985-86, the most recent available figures, according to a much-cited national study by the Council for Aid to Education. The public sector’s share of that has doubled in 20 years to the point where, for the first time, it accounted for more than half of the total, the survey showed. Among the 10 California schools with the most successful record of private fund raising from all sources were three UC campuses--UCLA, Berkeley and San Francisco.

Big public universities in the Midwest have a long tradition of asking for charity. But some Californians may be befuddled by that prospect here, where taxes and student fees have covered most of the operating costs at public institutions. After all, would any other state agency, say prisons or highways, pass the collection plate throughout corporate America?

To such sentiments, Curtis R. Simic, UC Berkeley’s vice chancellor for development, responded: “Any state university that has been great is not going to stay great relying just on public money.”

Besides, he added, talk of dangerous competition for funds is premature because no school, public or private, has tapped the full cash potential of alumni and other natural constituents--such as local businesses and sports boosters.

Distinction Blurred

Moreover, public college administrators stress that the distinction between their schools and the private ones is increasingly blurred. Eligible students can apply Cal Grants, the state-funded scholarships based on financial need and academic achievement, to tuition at private schools, some of which also receive enormous federal grants for research. “There is no such thing as a fully private university anymore,” Simic said.

Still, officials of some private schools--particularly smaller and less well-known colleges--are angry. “Wouldn’t you resent it if someone was cutting into what you figured was your territory?” asked Sandra Johnson of Brakeley, John Price Jones Inc., a Connecticut-based fund-raising consulting firm.

Many corporations aim their donations at the schools where they recruit new employees. In California, the growth and improvement in the UC and California State University systems in the last 20 years led businesses to both recruit employees and to give more money there. This created another benefit for public schools because many companies now match their employees’ donations to colleges.

For example, the Security Pacific Foundation, affiliated with the large Los Angeles-based banking corporation, used to give money to only a handful of public universities. But three years ago it began donating to all the UC and Cal State campuses as well as to private schools, said Carol Taufer, foundation president. “We get as many new hires from UC and Cal State campuses as we do from the privates now,” she explained. “So there is no reason not to be supportive.”

Type of Phenomenon

Meanwhile, the amount of dollars and manpower involved on both sides grew rapidly in recent years and fund-raising techniques have become more sophisticated with the aid of computers. “There is a cliche that a rising tide lifts all boats and I think that’s the kind of phenomenon you’ve got,” said James Norvell, chairman of Development Management Associates, Long Beach-based consultants.

Yet some schools are worried about what they describe as an air of one-upmanship: each successful fund drive encourages a school to try a bigger one soon and prods its rivals to set even higher goals. Even some two-year community colleges are joining the race.

According to a survey published in September by the Chronicle of Higher Education and announcements since then, 40 American colleges and universities each are trying to raise $100 million or more in announced capital drives and at least 25 more are planning such campaigns. Eleven of the 40 are public schools. At least 100 other colleges have announced drives with goals between $15 million and $100 million. All those dollar figures, the Chronicle announced, “would have been unimaginable a few years ago.”

Stanford University is now the nationwide leader and its fund-raising abilities are regarded with awe around the country. Stanford shattered all previous records with its announcement in February that it aims to garner $1.1 billion in time for its 1992 Centennial. William Hewlett and David and Lucile Packard, from the families that founded Hewlett-Packard Inc., kicked things off by giving $120 million, and by September another $288 million had been pledged, officials said. (Most fund drives are not announced until at least a third or more of the contributions have either been pledged or received.)

Causes Some Backlash

But such a trend to very large fund drives also has produced something of a backlash. Some corporations feel besieged. “The size of gifts they are looking for is way out of line,” said the philanthropy officer for one major corporation headquartered in San Francisco.

Many of the current capital campaigns are aimed at repairing old buildings and constructing new ones. To be sure, some schools have gigantic endowment reserves--Stanford, for example, has $1.5 billion, thought to be the fifth largest in the nation. But even wealthy schools say the income from endowments is not enough to meet academic needs.

The recent stock market crash added a sense of uncertainty to all of philanthropy, officials said. But no school, public or private, appears to be backing off.

Some examples:

- UCLA began a $200-million capital drive in 1982 but was so successful that it increased that to a goal of $300 million by the end of next near. So far, $268 million is pledged or in hand, according to James Osterholt, assistant vice chancellor for development. Annual donations to UCLA are now about $90 million, more than double the pre-1982 peak. In the last year, UCLA opened fund-raising offices in San Francisco and Newport Beach.

- Three years ago, privately run University of Southern California began a $557-million capital drive--the second largest in the nation now--and is more than halfway toward the goal with three more years to go. USC president James H. Zumberge said he is “worried to some extent” about competition for money from the UC system. But, he added: “I obviously can’t be devastated by that when we are having such good success on our own behalf.” Zumberge said he thought it was more important that the state Legislature raise the funding for Cal Grants.

- UC Berkeley earlier this month kicked off the Los Angeles portion of its new five-year drive with a lavish dinner at the Beverly Hills Hotel and the announcement that $164 million is pledged or in hand toward the $320-million goal. The campaign, entitled “Keeping the Promise,” is for new buildings for bioscience, business and computer science, as well as to endow 60 new professorship chairs and boost the humanities and international affairs studies.

- Occidental College began a $42-million drive in 1975 and twice increased the goal and postponed the deadline. It now has $89 million in cash and pledges toward a $100-million target next year, according to Lee Case, vice president for planning and development. “The point is not that one should preclude any corporate giving for public education,” he said. “The point is that business and industry should realize there is a very important private sector out there that needs support. We simply have to get a fair share.”

UC Sets Guidelines

The UC system set guidelines in 1959 to restrict its non-governmental soliciting to alumni families, traditional friends and to companies geographically or sentimentally close to the campuses. Gay Englezos, UC’s gift and endowment coordinator, said that policy is still on the books, although she said she can understand why private schools think it was long ago discarded. “Our circle of friends has grown,” she said. During interviews with fund raisers at several UC campuses, everyone questioned about the policy said they thought it had been abandoned.

The California State University system is also increasing its efforts. Five years ago, all 19 Cal State campuses raised a total of about $22 million from corporations, foundations and alumni. That grew to $47 million in 1985-86, according to Robert Maners, executive director of development, although he concedes “that is chicken feed compared to Stanford.”

Cal State Chancellor W. Ann Reynolds stressed that the system is only 27 years old. “We have maturing alumni and in the future will have increasingly successful people to contribute,” she said. Earlier this year, Cal State, joining the trend of computer-aided fund raising, used motor vehicle records to obtain addresses for 406,000 of 486,000 alumni who had been considered “missing.”

“We never had much of a history of alumni giving before because we never asked them for much,” Maners said. “My point is we are just emerging and we are going to get better. And I don’t think we are to get better at the expense of other institutions. I think there is enough for everybody.”

TOP COLLEGE AND UNIVERSITY FUND-RAISERS According to the Council for Aid to Education, these colleges were the most successful fund-raisers in 1985-86. They are ranked here by millions of dollars collected.

THE STATE Stanford University $179.3 Caltech 77.6 University of Southern California 72.0 UCLA 57.2 UC Berkeley 52.2 Pomona College 32.9 Loyola Marymount University 31.7 UC San Francisco 29.5 Harvey Mudd College 26.1 Pepperdine University 23.0

THE NATION Stanford University $179.3 Harvard University 146.2 Washington University (St. Louis) 146.1 Cornell University 114.2 Yale University 110.2 Columbia University 94.5 University of Minnesota 93.7 Princeton University 87.5 University of Illinois 82.9 University of Pennsylvania 79.5