PRIVATE CONTRIBUTIONS AID UNIVERSITIES; ADDED FUNDS HELP BEEF UP PROGRAMMING

THE FUNDING DILEMMA IN HIGHER EDUCATION

(Fifth in a series)

As public colleges and universities struggle to secure federal and state funding, private contributions have become increasingly relevant to their financial health.

While private donations are a small part of a university's overall budget, university officials contend a healthy fund-raising foundation can make good programming better.

One survey ranks Southeast Missouri State University among leaders in private donations to public, comprehensive colleges and universities. Robert Foster, executive vice president of Southeast, said the university's foundation last year raised more than the institution received in "new money" from the state.

Southeast received $30.3 million in state funding for general operations in fiscal year 1990, up $1.5 million over 1989. For the 1989-90 year, Southeast raised $2.6 million in private funds, including $1.8 million in cash donations, Foster said.

"This was more money than we received in new money from the state, which is unusual," he said. "But private funds are definitely playing a bigger role in higher education. Still, we are a state university and we must look to the state for our funding needs." said Foster.

Since its inception in 1983, the Southeast Missouri University Foundation has generated $20.2 million in contributions, including $9.5 million in cash.

Southeast Missouri State ranked fifth among 31 colleges and universities in Missouri in 1988-89 in private contributions received. Among 155 comprehensive public universities surveyed nationwide, Southeast ranked 12th in private contributions received that year.

In Missouri, almost $160 million was donated to 31 colleges and universities in 1988-89.

According to the New York-based Council for Aid to Education, private contributions to the nation's colleges and universities in the 1989 academic year rose to the highest level on record $8.9 billion up 8.8 percent over 1988.

Foster said Southeast's fund-raising success has helped ease the effect of budgetary constraints that contributed to the closure of 53 programs since 1982. Statewide, Missouri's public colleges and universities have discontinued 260 academic programs in the past five years.

With state appropriations expected to remain at existing levels for the 1992 fiscal year, new or enhanced programming will need to be funded through increased student fees and private gifts, Southeast officials said.

As the state continues to tighten its budget belt, student fees like private donations are paying for a larger share of higher education than ever before.

Ten years ago, student fees funded about 15 percent of Southeast's operating budget; today, student fees generate about 30 percent.

Without more state funding for higher education, Missouri colleges and universities likely will continue to rely heavily on tuition hikes and increased donations to fund general operations.

Although the $2.6 million raised through private giving last year is a small part of the overall $62 million Southeast budget, Foster said the additional revenue is crucial to enhancement or expansion of existing programs.

"The fact is, we have used foundation money for really basic things here at the university," Foster said. "The quality of programming has been greatly enhanced because we've been able to use foundation money for some programs."

Don Ford, director of university development at Southeast, said plans for a new College of Business Administration building is one example of the role the foundation plays at Southeast.

"The state has indicated that we needed to raise $2.4 million for them to fund the new college of business administration (building)," Ford said. "So it's very crucial that we're successful in our current $25 million `Vision of Excellence' campaign to raise money for the new facility."

The capital campaign also will fund a variety of other projects and programs.

Southeast President Kala Stroup said the foundation's success serves as a "bargaining chip" with the state to reflect the region's commitment to the university.

"The success of the foundation shows the local and regional commitment to ideas," she said. "The foundation has allowed us to put that edge, or margin of quality, on something that you couldn't have done with the state budget."

Ford said lawmakers see Southeast's foundation success as an indication of broad-based constituency support of the school. "I think members of the legislature have come to appreciate what our embryonic foundation has done," he said.

But Stroup said that even the most successful foundation cannot pay the bulk of an institution's operating expenses. Southeast is no exception and is dependent on the state legislature and its students for most of its revenue, she said.

The Missouri General Assembly is considering whether to place a record tax-increase proposal on the November ballot that would provide funding for higher education and elementary and secondary schools. The legislature is not expected to vote on a final tax proposal until late in the session, which ends May 17. The tax package could include about $300 million for higher education.

Foster said that, short of a tax increase, there's little the university can do to reverse the trend of increased reliance on student fees and donations for operating revenue.

"I think the tax proposal certainly is the answer to getting things in balance," he said. "When we've gone from about 10 percent of educational costs being borne by student fees to 31 percent, then we've obviously moved across the line of balance."

Foster said the additional burden is particularly difficult in Southeast Missouri, where there are "higher pockets of poverty" and a lower college-attendance rate. "We must keep that cost for the student as equitable as possible," he said.

Foster said $300 million in additional state funding for higher education is a "reasonable figure."

While some business groups in Missouri have urged that additional money be raised for higher education, many business leaders say they're opposed to a massive tax increase, particularly one that places a disproportionate share of the tax burden on corporations.

Should voters approve such a measure, critics have said the tax hike might discourage corporations and business leaders from supporting higher education through private contributions and gifts.

Foster said: "I've heard that criticism but I don't think it would have a negative effect. I see many prominent business people out supporting this tax proposal. They're going to want properly funded higher education and they're willing to pay their fair share for it."

Ford said that regardless of the success or failure of a tax increase for higher education, the foundation's mission remains the same: to increase private-sector contributions to Southeast.

"It's an economic fact that, given the tax burden the taxpayer takes care of right now, that a lot of people are not inclined to pay more," he said.

"There are some very important issues being debated in the legislature right now, and I don't think it's my place to debate the pros and cons of possible legislation. But whatever we can do from the private sector can only help this university."

(Friday: A look at higher-education reform and programs that have earned Missouri universities national acclaim.