Aug. 15, 2016

A Virginia Success Story

There is a revolution under way in state support for research in higher education. It is a revolution with substantial casualties.

Flagship universities from California to Missouri and Montana have suffered devastating cuts as taxpayer support for critical research has been withdrawn by state legislatures. Tuition has soared. Student debt has spiraled. Enrollments have been cut.

Together these developments augur a bleak future for publicly supported innovation and job creation, crucial tasks for state institutions.

At the University of Virginia, the struggle has been difficult. The challenge has also been undertaken amidst a distracting run of bad news, from random acts of violence against several students to a fraudulent national hit piece (the Rolling Stone article alleging a “rape culture” exists in Charlottesville) to maladministration by an earlier Board of Visitors faction, who unsuccessfully sought to short-circuit work on the issue by firing, then rehiring, President Teresa Sullivan.

Lost in this reporting has been an extraordinary development. It is good news which once again affords U.Va., one of our nation’s greatest public universities, the opportunity to provide exceptional leadership. Virginia’s success should serve as a national model for solving a crucial challenge: how to support both teaching and research at our best state institutions.

A decade ago, cuts from Richmond made clear legislators’ conclusion we could no longer afford to bear the financial cost of maintaining world class, state-subsidized research universities.

During the subsequent recession and recovery, U.Va. administrators struggled to reinvent a model public research university.

The key to U.Va.’s success appears to have been a combination of flexibility and focus. Through a judicious mix of fiscal conservatism, active stewardship of endowment funds (which have soared with domestic markets over the past eight years), and the application of modern finance, U.Va. has succeeded.

A sustained fundraising campaign was able to secure investments from alums and supporters to augment the existing operating funds pool. The research side of the university’s academic house is now secure. U.Va. is now well-situated to self-fund its research opportunities, while at the same time working with the legislature to address the challenge of maintaining the affordability of its other essential mission, the training of tomorrow’s leaders.

Reinventing the funding of the academic research enterprise is critical to U.Va. and similar research universities being able to deliver on both halves of their mission: teaching and research. Absent a robust infrastructure and faculty, the education experience would drift away from research, essential to creating new knowledge and jobs.

Today in Virginia, the funding responsibilities are clear. Tuition, endowment and modest state support will fund access to education and training. The university and external sponsors of academic research are responsible for funding research. No other university in America has addressed this challenge as successfully as the University of Virginia.

Many other states have folded their hands, choosing to defund the research enterprise at their state’s flagship universities.

Not all public research universities are capable of supporting the kinds of innovative research that provides long-term dividends.

Rather than allowing research to wither, U.Va.’s administration and its BOV made a huge bet. They have wagered that for the commonwealth to prosper, a revolutionary new self-funded business model for research had to be imagined and deployed.

Instead of treating the decline of state funding as a one-time shock to ride out, U.Va. leaders saw an opportunity. Rather than relying on state funds or tuition dollars, U.Va. would build the infrastructure and investment portfolio with which to self-fund strategic research. State dollars are now focused on access for all and support for excellent teaching. It is a classic win-win model.

By assembling what is now a best in the nation $2.2 billion strategic research investment fund, U.Va. has succeeded where a number of other public universities have failed. There is now the opportunity to invest in longer-term strategies that secure U.Va.’s position as a national leader in affordable undergraduate education and knowledge creation through innovative research.

Two years from now, Virginia will celebrate the bicentennial of one of our greatest national treasures, Mr. Jefferson’s university. As we approach this benchmark, citizens and policymakers alike would do well to reject divisive rhetoric and either/or choices.

Better we should engage together and chart a course towards excellence, one which balances the responsibility to provide our most promising young students access to an excellent, affordable education, while offering researchers and scholars a state-of-the art platform from which to change the world. Our greatest universities are ambidextrous. Few are as fortunate as Virginians are to have this opportunity before us.

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