As was noted earlier, the faculty generated $410 million in external grants and contracts in FY 2005. These are valuable funds because they represent the primary mechanism by which new knowledge is generated. However, grants and contracts revenues are restricted in nature and cannot be used to address the basic funding needs of the campus.
State-Appropriated Funds
State-appropriated funds, or general funds, are important not only to UMB’s continued growth and development, but also to the continuation of programs vitally important to the state’s economic and social health and development. In FY 2005 UMB’s appropriation provided 20% of its financial support (see Figure 2 in Chapter 1). Total campus revenues increased from $376 million in FY 1997 to $673 million in FY 2005, an average of 7.0% per year. However, the average increase in state general funds over the same period was only 2.9%. In fact, because of a substantial decline (13.7%) from FY 2002 to FY 2004, resulting from a recession in Maryland, state general funds were 12.8% ($19.6 million) less than the highest level received in FY 2002.
Tuition and Fees
It should be noted that UMB has a relatively small student body and therefore cannot meet its increasing fiscal obligations by increasing tuition rates. As a result of substantial increases in tuition during the FY 2002-2004 recession, the de facto ceiling on tuition has probably been reached in most UMB programs.
FY 2007 Budget Request
The FY 2007 Budget Request (the most recent budget information available) includes an average increase of 5.4%. These increases will provide for a 2.5% merit increase for faculty and staff, mandatory fringe benefits, funds to operate the new Dental School Building, a 10%
increase in state-supported need-based financial aid, and the increased costs of fuel and utilities.
In addition the request includes enhancement funds of $1.7 million for facilities renewal, $1.5 million for the Center of Regenerative Research, and $0.8 million to support the Capital Campaign, which will allow the University of Maryland Baltimore Foundation to grow and sustain a mature development program. Funds for the interdisciplinary Center for Regenerative Research, building on the core faculty already in place, will be used to recruit and retain some of the nation's best researchers.
Private Fundraising
The tradition of philanthropy in public higher education is relatively recent. With the exception of several large universities in the West and Midwest, very few public universities had substantial development operations until approximately 20 years ago. A national survey of private giving to higher education and independent schools reported the following comparative data for 2004:3
• 70 private research/doctoral institutions raised a total of $46.7 billion in 2004, an average of $97 million per institution, compared with 136 public institutions that raised $7.5 billion, or $56 million per institution. UMB raised $41.3 million during this period.
• Private institutions raise, on average, 16.3% of their total budget through private funds compared with 9.9% among public institutions. UMB comes close to the public average at 7.0%
• The endowment at private research/doctoral institutions averages $166,112 per student compared with only $18,391 at public institutions. At UMB, the endowment per student is $29,423 compared with peer institutions that have undergraduate colleges, such as the University of Virginia at $104,000 per student and the University of Michigan at $78,000.
The development enterprise at UMB mirrors the organization of the campus as a whole.
The university is composed of professional schools and a Graduate School with an active alumni base of 54,593, and the development function is structured to serve their specific priorities and needs. The growth in philanthropy over the last 14 years, from $21.6 million in FY 1997 to almost $53 million in FY 2005, demonstrates three intersecting realities: an increased
appreciation within UMB of the public university imperative to develop entrepreneurial private sources of funding; an increased commitment by University leaders to integrate private sector fundraising into their strategic planning and budgeting processes; and a realization by the wider community of alumni, friends, corporations, and foundations that philanthropic support for UMB is a mutually beneficial investment in health and human services for their own future. The
ultimate UMB development goal is to create a new model in which the income stream from the
3 Source: 2004 Voluntary Support of Education, Council for Aid to Education. The numbers quoted reflect the number of institutions reporting to CAE.
University’s permanent endowment provides stability for its growth and excellence, independent of the economic cycle in the State.
At present the organizational model for development at UMB is a hybrid of
centralized/centralized relationships with accountability ranging along a continuum. Three schools—the Dental School and the Schools of Pharmacy, and Social Work—have their development staff report directly to the associate vice president of development and alumni relations in the central Office of External Affairs. On the other hand, development staff in the Schools of Law, Medicine, and Nursing report directly to their deans. Additionally, core functions and services reside at the central campus level that serve all components of UMB.
The purpose of placing the Development Office within the Office of External Affairs was to create and implement a comprehensive and integrated model for development and alumni relations for the campus. In consultation with school development staffs and within the context of the annual campus fundraising goal, this division sets expectations for performance and productivity outcomes. Funded through the Office of the President, the UMB Foundation, and allocations from the schools, OEA Development provides an efficient, state-of-the-art
infrastructure that supports the activities of the school-based development staffs.
Core leadership and support services are provided in five general areas: Strategic Planning (Capital Campaign); Annual Fund;4 Planned Giving, Corporate and Foundation Relations;5 and Prospect Research. The Office of Resource Management within OEA also provides core services to individual units in gift administration and in donor database support, which is managed using BSR Advance software.
Campus philanthropic goals are derived primarily from the academic priorities and strategic plans of the schools and units. For every successive Capital Campaign, each component of the University drafts its case statement, thus ensuring that gifts support stated goals and objectives designed to advance each school. Revenue from private sources also seeds special programs and initiatives as they gain momentum for extramural grant support. Additionally, philanthropy has increased endowment for essential priorities such as professorships and scholarships.
By design, major gift activity is the primary focus of school-based staff. Major gift
officers manage portfolios ranging from 100 to150 qualified prospects. Each development officer is responsible for customized cultivation, solicitation, and stewardship strategies for each major prospect. Collegiality and transparent communication are the norm for coordinating activity throughout this process.
OEA conducts program evaluations with each school that has entered into a direct OEA management relationship within the past two years. Outcomes will determine the success and therefore the continuation of this new campus model. OEA senior development directors design measurable outcomes within their program areas for each of the schools. The resulting data will provide benchmarking information to evaluate the efficiency and impact of additional campus staffing and budgeting.
The ultimate measure is the growth in philanthropy in each succeeding year and the return on the University’s investment in this function. To date, a $.12 cost per dollar raised
4 The Executive Director of the Medical Alumni Association manages the School’s Annual Fund program.
5 The Schools of Medicine and Nursing include this function in their staffing.
demonstrates a wise and efficient use of resources for development in a centralized/decentralized model.