Texas A&M's $4 Billion Campaign Signals Public Ambitionby
Universities try to offset declining state, federal funding
Private counterparts have longer fundraising track records
Public U.S. colleges are growing more ambitious in the philanthropy race.
A $4 billion fundraising campaign unveiled last week at Texas A&M University ranks as one of the largest ever, as top public schools try to offset declining state and federal funding and stay competitive with private counterparts with longer track records of tapping donations.
Texas A&M trails only the University of California Los Angeles, which is seeking $4.2 billion, and matches a drive at the University of Michigan, according to the Council for Advancement and Support of Education, a membership organization in Washington.
“These flagship schools have been forced to rely on private philanthropy to try to keep up,” said Rob Reich, co-director of Stanford University’s Center on Philanthropy and Civil Society. “Texas A&M and others should keep in mind that a thriving system depends on public dollars.”
The pace of giving has remained strong this year, led by mega gifts from wealthy donors such as hedge fund manager John Paulson, who gave $400 million to Harvard University, and Stephen Schwarzman, who gave $150 million to Yale University. Donations to higher education came in at a record $37.5 billion in the year ended June 2014, up 11 percent from the year prior, according to a report in January from the Council for Aid to Education, a New York-based group.
Music mogul David Geffen donated $100 million to UCLA, bringing his total philanthropic support to the institution to more than $400 million, the school said Thursday in a statement. The latest gift will support a college preparatory academy on the campus for Los Angeles-area students in grades 6 through 12, UCLA said.
Philanthropy has been a bright spot in higher education as schools have faced federal research funding cuts and pressure to offer more financial aid to offset rising tuition. At the same time, university endowments, with the values of many surpassing pre-recession levels, have once again caught the eye of Congress, which may introduce a bill on the funds’ spending.
Among private schools, Harvard set a new benchmark unveiling a $6.5 billion campaign last year and is well ahead of schedule with $6.1 billion in pledges through last month. Cornell University extended an effort to raise $5.75 billion this year even though it has surpassed $6 billion of pledges.
UCLA is about halfway to its goal while Michigan has raised about $3 billion, the Council for Advancement and Support of Education said. Still, there could be a backlash as campaigns keep getting bigger, said Timothy Seiler, a fellow at Indiana University’s Lilly Family School of Philanthropy. State schools must also be careful not give lawmakers an excuse to further cut appropriations for higher education as private donations grow.
“There may be a point at which at universities come under scrutiny for the frequency at which they conduct these campaigns,” Seiler said.
Texas A&M, located about 100 miles northwest of Houston in College Station, is the largest public campus in the state with more than 64,000 students and one of the wealthiest in the U.S. with an endowment of $11.1 billion. It counts on state appropriations for about 22 percent of operating revenue, down from about 30 percent a decade ago, according to university documents.
The university said it has already raised $1.9 billion toward its goal in a two-year quiet phase leading up to last week. Michael Young, Texas A&M’s president, said in a phone interview that about 85 percent of the money will be spent on academics, mostly research, financial aid and faculty, while the rest will go to athletics, including helping pay for renovating the football stadium. The university said as much as $1 billion of the amount raised may be designated as endowment gifts.
“I’m very optimistic about this campaign,” said Young, who was hired this year from the University of Washington. “It’s a wonderful opportunity for planning for the university.”
Texas A&M collected $317 million in donations last year, up 25 percent from the year prior, according to the Council for Aid to Education. Its last campaign concluded in 2006, when it raised $1.6 billion, the school said. George Mitchell, a petroleum engineer who pioneered hydraulic fracturing, ranks among the university’s biggest donors, giving more than $95 million, including $20 million in 2012, the year before he died.
L. Lowry Mays, the founder and former chairman of Clear Channel Communications Inc., has with his wife given more than $20 million to the business school, which bears his name.
Prior to a steep drop in petroleum prices this year, Texas A&M benefited from a boom in oil and gas production, with royalties from wells on public lands flowing into its endowment. The money also helped pay for campus capital projects and was used by lawmakers to offset planned tuition increases. Young and others in the industry said fundraising remains robust in the state.
“The people that got the money still have the money,” said Robert Corder, a senior principal at Dini Spheris, a Houston-based fundraising consultant.