State Matching Grant Programs Stimulate Private Giving
URI Communications, 401-874-2116
If 20 other states, including three New England neighbors, can do it, why not Rhode Island?
What are they doing? Investing in their state universities by providing matching endowment funds that encourage the private sector (i.e. alumni, businesses, and others) to also support public higher education.
The current legislative session has two bills under consideration that would provide the University of Rhode Island $1 in state funding for every $2 privately raised (the state funding would be capped at $5 million). URI President Robert L. Carothers has identified this legislation as being among the University’s top 2005 priorities. The same legislation would offer Rhode Island College up to $2 million and CCRI up to $1 million. The legislation explicitly states that the endowment funding would not replace state appropriations for operating and capital purposes.
Such state matching grant programs have proven track records. In other states, public universities have reported substantial increases in private giving, as supporters have responded to the state’s willingness to do its part. Some states have found such programs so attractive that they have renewed or increased them.
Massachusetts had a matching grant initiative during the 90s, and has stated its intent to assist UMass with its upcoming fundraising campaign by bringing back a similar program. A January 10th 2005 Boston Globe article noted that the legislature desires “to send the message that the state will carry its share of the load.” After the state came into the picture, UConn discovered that alumni and friends were quick to follow with their own investments in the University.
Why an endowment match now? URI is about to launch a comprehensive fundraising campaign focused on building its endowment. When we campaign for private dollars prospective donors often ask, “What is Rhode Island doing to make URI a continually better place?” This question reflects alumni and business community concerns that URI (as well as RIC and CCRI) are under funded. With a state matching grant program, we can answer that question.
Securing new endowment funds and growing the overall endowment are key objectives defined by President Carothers in the University’s strategic plan. Why? Because endowment funds are permanent; they are not annual monies. At URI, they are managed and invested by the URI Foundation, and they are kept separate from University and state funds. Their yearly earnings become the dependable sources of revenue that an institution needs on a short, intermediate, and long-term basis. They provide stability.
The size of an endowment is one of the criteria used to rank and evaluate public and private institutions. It makes a statement about quality and prestige, as it reflects how willing others are to invest their own money in an institution. Endowment size is also used as a criteria because it provides more earnings to invest on existing priorities as well as emerging areas, such as academic and student life programming, faculty curriculum and research efforts, the library, graduate fellowships, and undergraduate scholarships.
The University of Wyoming, identified in a recent study as one of URI’s national peer institutions, has a $500 million endowment fund created by the state to invest in scholarships and faculty chairs. These are the same areas that URI, with a $67 million endowment, is seeking to bolster.
A recent news article pointed out the challenges of retaining students at URI, challenges directly related to rising costs but insufficient sources of money to meet those costs. More scholarship endowments at URI will help address that problem. For example, a recently received $25,000 gift for upper class students in microbiology would be a $37,500 endowment if this state program were in place. Our College of Engineering received an estate gift of $1.7 million dedicated to undergraduate scholarships. With the state program in place, this $1.7 million would have become more than $2.5 million, with the University able to offer at least an additional 20 scholarships to deserving students.
Why view the program more as an investment than a cost? Because it is spending some money to make a lot more money. That’s a cost of good business! Where else can the Rhode Island legislature allocate $5 million and expect to get $10 million in return? Who among us can turn down a 2 for 1 return?
To the citizens of Rhode Island, to the nearly 40,000 alumni who live in this state, and to the families of our students, we ask you to join in supporting Senate Bill S-0113 sponsored by Sen. Jack Revens, and House Bill H-5128 sponsored by Rep. Pat Shanely. It is time for Rhode Island to join its sister states (Massachusetts, Connecticut and Vermont) and adopt this legislation.
Robert M. Beagle
Vice President for Advancement
University of Rhode Island
Daniel J. Pendergast, ‘59
President, URI Foundation