Opinion: Endowment should help KU more in this crisis
Your family takes great pride in helping each other across generations. The grandparents regularly set aside money, knowing that your dream is to build a second home on a few acres of land the family owns. You could not do it without them. They want to do it for you.
After years of their saving, a disaster destroys your existing home, which also houses your business. Your finances descend into chaos. Certainly you would ask those generous elders to direct some of the second home nest egg toward saving your family and business from ruin. Hopefully you’d not even have to ask.
KU is likewise in a crisis. Having recently cut $20 million dollars from its budget, the university faces losses of “tens of millions” more in this academic year. Next year the financial peril may increase if students are unsure that effective testing accompanies a return to campus and if necessary KU can transition to a high-powered online curriculum.
At the same time KU holds, through its endowment, over $1.8 billion. The Kansas University Endowment Association sits on that particular nest egg but has hatched no plans to address this crisis. Journal-World reporting shows the sum total of KUEA emergency fundraising scarcely exceeds $30,000.
While other universities are investing for summer development of compelling new courses mixing online and in-person learning, KUEA offers faculty tiny amounts of emergency funds for summer support, due to be repaid in September!
Faculty and teaching assistants are not paid in summers. When they are told that “much work” is to be done to win back students in the fall, they know that this is to be unpaid work. Even if we bracket questions of fairness, this response does not match the scale of the curriculum redesign the university faces.
KUEA has its reasons, some of them legal ones, for such parsimony. The endowment exists in an ill-defined state of semi-autonomy from the university. KUEA’s vision of its own role is to know donor interests and to secure gifts firmly tied to those interests — an academic building devoted to X, an athletic facility named for Y, an endowed professorship studying Z, or student scholarships variously targeted. Such a strategy makes for inflexibility in the face of crises. About 96% of the endowment is said to be tied to specific goals.
Some of KUEA’s strategy benefits the whole university. Scholarships produce revenue and attract excellent students. But the KUEA model also risks creating budget crises. If, for example, a named building comes in over-budget and if infrastructure and maintenance supporting it are left unaccounted for, the shortfalls become KU’s obligation. Administrators attributed the emergency deficits of two years ago to just such a scenario, one in which the university wound up subsidizing donor priorities.
There are potential long-term solutions to this problem. Some administrators wisely have proposed a cost-sharing component for gifts to endowment. Such a mechanism would retain targeted contributions but set aside 5% to 10% for the university’s day-to-day operations, without which buildings would not function and faculty would flounder.
Our crisis looms in the here and now. It is partly about money, of course. Equally important is the good that KUEA’s coming forward to face the crisis can do in changing approaches to KU’s reopening and rebounding. At this point administrative responses are imagined as overwhelmingly about austerity. Furloughs, pay cuts, hiring freezes, slashed budgets are the decisive actions in place or contemplated.
However, emerging on the other side of COVID-19 as a successful research university attractive to undergraduates requires marshaling resources as much as it does lamenting their absence. A successful on-campus reopening cannot be achieved with financial crises entering into public health judgments. KU will also need to transform many in-person courses to compelling online and hybrid ones to compete for students with quality community colleges in the region.
The nurturing family at this article’s beginning suggests one part of a model for preserving a healthy university. We need a flexible, generous, and far-sighted KUEA response for KU to avoid slipping seriously in stature and enrollments. Lawrence as a city also has a stake in this matter since it is sure to suffer as KU does.
Exploring to what uses the 4% of the endowment that is unencumbered can be put, inquiring to donors what pledged funds might be repurposed, and energetically fundraising for emergency purposes could begin a KUEA response.
— David Roediger is a foundation distinguished professor at KU.