The greatest example of a beneficial public-private partnership in our nation is public higher education.  Any student of history knows the key to glory in our republic is the balance between the private lives of citizens and their support of the public good.   Intellectual and fiscal resources, ingenuity and taxes power the nation (hopefully more the former than the latter.) University achievement will likewise boosted significantly by donors who love and support their alma mater.

Tax dollars alone won’t work.

This makes universities unique in the constellation of state agencies, and a public university is a state agency.  The six thousand employees of Southern know they work for the State of Illinois. But here is another truth…Universities in the 21st century will be built on the foundation of private giving.  This was not the case in the fifties and sixties when, to quote Dorothy Morris, “The money grew on trees – it just grew on trees.”

The four resource streams for funding public higher education are: 1) state appropriations, 2) tuition and fees, 3) grants, gifts and contracts, and 4) auxiliary operations.  In every public university in the United States an inexorable shift has been occurring over the past forty years.  State appropriations relative to total expenditures have been steadily becoming a smaller part of the resource pie.  At the University of Virginia state appropriations make up less that 10% of total expenditures.  The trend is similar everywhere.

At our University we rely too heavily on the state, over 30% of our budget comes from state appropriations, down from nearly 70% just 4 decades ago.  A simple rule applies to all public research universities:  The better the institution the smaller the contribution of state resources for operating the organization. That doesn’t mean that state funds are unimportant or unappreciated.

States resources are seed corn, not harvest.

Effective development of extramural support for academic excellence is critical as tuition and other resource streams are pulled and pressed more thinly.  Philanthropy, research support, and other public/private ventures must all continue to grow as reliable funding streams.

The just desire to keep tuition and fees within reach persists, with recognition that the current trend in state appropriations will increase the importance of private funding, and entrepreneurial public-private partnerships.  Intelligently coupled, cost-effective management principles and alumni giving provide a financial margin for excellence in educational opportunity for students.  The challenge over the next decade is to generate and allocate resources while remaining attentive to the strength, need and mission of every part of our University.  There must be a partnership of public and private funding.

The opportunity and the demand for innovation are greater now than at any time in history as a result of the increased pressure on the resources of the State.  Is it an impossible task to make the resource equation work, and simultaneously build quality?  I would argue that out of such circumstances institutional character and quality are defined, honed and enhanced.  Logan Wilson, president of the American Council of Education said it clearly, “Higher education will be financed adequately only when costs are regarded as investments rather than expenditures…”

In order to make our university work, we must have private giving, and for that to happen, our university must prove its worth.  Quality and giving drive each other as surely as inhaling and exhaling.