Board of Visitors meetings

Faculty Actions

Staff Report

The line between public and private funding of the University’s operations is shifting in a small but significant way.

“For the first time, revenues from private sources — gifts, and endowment income — exceed the state appropriation,” said Leonard W. Sandridge Jr., executive vice president and chief operating officer, in briefing members of the Board of Visitors’ Finance Committee on the University’s proposed 2003-04 operating budget.
State funds make up about 8.1 percent, or $130.9 million, of the University’s proposed $1.6 billion budget while spending that will come from endowment income and gifts accounts for about 8.3 percent, or $134 million.

Sandridge noted in the May 21 meeting that since 1985-86, the state’s share of U.Va.’s budget has decreased from 27.1 percent to 9.6 percent for the current year, and that decrease is expected to continue into the coming fiscal year.
“It’s the lowest that I’ve ever seen it,” said Sandridge.

The committee’s discussion came on the same day that the State Council of Higher Education for Virginia reported the need for a consistent, reliable statewide higher education funding policy.

“Higher education support is on a slippery slope — what took years to build, we stand to lose … and it will take a long time to rebuild a nationally reputable system of higher education,” Dr. Carl N. Kelly, SCHEV chairman, said in a release accompanying the report.

The decrease in state funding is expected to be partially offset by increased tuition and fees, which will account for 15 percent, or $242.8 million, of anticipated revenues.

The largest slice of the income pie will come from patient revenue, expected to contribute 42.1 percent, or $680 million, toward operating costs. Grants and contracts account for 15.1 percent, or $245 million.

Several board members asked about the Medical Center’s budget, which accounts for 42.1 percent, or $665.4 million, of the overall proposed budget. Sandridge expressed confidence in the anticipated operating margin and pointed out that occupancy of beds in the Medical Center has been “extraordinary.”

“We are as full as we’ve ever been for the last four years,” he said. In addition, two new modular operating rooms are scheduled to be up and running this summer.
“It is a sound budget, a conservative budget,” Sandridge said.

—Lee Graves

Development: If it‘s not broken ...

With 27 separate foundations and a central development office, U.Va. has “by far the most complex [fund-raising] structure in public higher education,” the University’s top fund-raiser told the Board of Visitors’ External Affairs Committee on May 23.

With an eye toward an upcoming $3 billion campaign, the committee heard the pros and cons of the University’s peculiar set-up, but took no action to modify it.

“We have the best dysfunctional program in the country,” said Robert D. Sweeney, senior vice president for development and public affairs. “It works great, but you wouldn’t want to design it that way.”

By comparison, most public universities have one fund-raising foundation to serve their entire institution; only the University of North Carolina-Chapel Hill has as many as a dozen foundations, Sweeney said

U.Va.’s system has its drawbacks and benefits, Sweeney and others said.

“The strong point of our model is that we have development officers who know their particular unit so well,” Sweeney said. Big gifts are often dependent on building a relationship between a donor and a researcher or faculty member, he noted, and school-based development officers are in the best position to facilitate such relationships.

The central development office serves as a management company, integrating the disparate foundations’ work in an effort to make fund-raising efforts appear seamless to potential donors, Sweeney said, while offering efficiencies of scale.

The central office can also help strengthen the operations of less-established foundations, he noted, and can guide donors from one jurisdiction to another. Still, political tensions do occasionally arise among the various units, and between the units and the central development office, said John B. “Jack” Syer, executive director of the U.Va. Alumni Association.

“Each unit has the capacity to engage its best and brightest volunteers,” who often identify closely with their particular unit, he said. “They don’t want to give up control.” Cooperation is more the rule than competition, Sweeney said.

Board member Susan Y. “Syd” Dorsey raised another potential flaw in the foundation-based model: the difficulty in making appeals to distinct constituencies that cross school boundaries, such as women and international students, both groups whose numbers are rising among alumni.

With the University on track to raise $240 million in cash flow this fiscal year, no one was offering ideas for alternate structures — yet.

“It’s like watching a dog walk on its hind legs,” said rector Gordon F. Rainey Jr. “The amazing thing is that it can walk at all.”

— Dan Heuchert

Architect selected for studio art building, other board action

A Boston architectural firm was selected by the board’s Building and Grounds Committee to design the $12.5 million studio art building.

If the full board approves, Schwartz/Silver Architects Inc. will develop plans for the three-story structure, which will provide teaching studios for painting, sculpting and photography, faculty offices, gallery space and studios for visiting faculty.
Among other actions taken May 23, the committee:

• Selected RMF Engineering Inc. of Baltimore for designing improvements to the main heating plant, a project that will total $50 million to improve emission controls and upgrade equipment.

• OK’d architectural design guidelines for the performing arts center at the corner of Massie Road and Emmet Street. The $47 million project will house a performance hall, faculty offices, classrooms and other space for the music department.

• Approved architectural design guidelines for the Rouss Hall addition and renovation. The $43 million project will provide a new home for the McIntire School of Commerce and additional space for the College. Committee members agreed not to demolish Varsity Hall, a historic building located behind Rouss Hall, but to get more information before deciding where to move it.

—Lee Graves