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April 3, 2008

Should Private Colleges That Raise Billions Receive Public Funds?

As state lawmakers crunch budget numbers in New York, some leaders of the State University System are wondering why private institutions with the ability to raise money on their own are still receiving public funds, according to The Buffalo News.

Columbia University has received $32-million in state funds, and New York University has collected $50-million, the newspaper reports. Meanwhile, Columbia is in the middle of a $4-billion fund-raising campaign and NYU is raising $2.5-billion in private donations.

“At a time when we’re facing budget cuts, is it appropriate?” asked Marsha S. Henderson, vice president for external affairs at the State University of New York at Buffalo, in the article.

It’s hardly a debate that is unique to New York. Should institutions with the ability to raise significant private donations also receive public funds, especially when public universities are facing financial difficulties? For all kinds of institutions—public or private—does success in private fund raising jeopardize the case the institutions make for seeking public appropriations?

Comments

1. All so-called “private” colleges and universities receive substantial support from local, state and federal taxpayers. This support is either in the form of direct appropriations (such as Columbia and NYU in the article above) or in the form of tax deductions for the donations given to the schools. The public treasuries forfeit a substantial amount of tax revenue because of these charitable donations. This reality applies not just to private colleges but also to churches, museums, and other such charitable, non-profit organizations. I’m not saying that I disagree with this, but I am well aware that I am paying higher property taxes because the churches and private college in my hometown are tax-exempt. So, a private college or church or museum should be careful not to take an attitude of “we’re a private organization and don’t really have to listen to the rubes who complain about their taxes.”

   — Bob    Apr 3, 04:27 PM    #

2. Ditto, ditto, ditto, Maryland Legislature. All those state dollars that go to Johns Hopkins should be allocated instead to state universities.

   Churches are a different matter—they’ re separate by virtue of the First Amendment.

   — Crab Lover    Apr 3, 07:21 PM    #

3. Since college endowments are managed for the most part, by big investment firms who command a large pergentage of the profits, it is in their interest to keep college donations up, and distributions from endowments down…some as low as 5% annually. Why should the taxpayers subsidize colleges that maintain these large “slush” funds, and use them at their own discretion?

   — DAMAJAH    Apr 4, 12:01 AM    #

4. Please don’t forget that as a result of a real reduction in state and federal support many public institutions of all types are now becoming more dependent on tax exmpt donations.

   — Chris Munoz    Apr 4, 11:00 AM    #

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