Endowment: Money in the bank

Private dollars change student lives at public universities

"I was driving up 81 the other day and saw that beautiful university. I can't believe how much it's grown. The campus is gorgeous." How many times have you heard descriptions like these from friends and fellow alumni? How many times have you thought the same thing?

JMU's buildings are beautiful; the landscaping is tip-top; enrollment is soaring. State funding must be at an all-time high. The university has it made for life, right?

It's a myth.

Those beautiful buildings are not all funded by the state. Periodic capital appropriations from the Virginia General Assembly do fund academic buildings, those with classrooms, labs and libraries. But other campus buildings - residence halls, dining quarters, athletics and recreation facilities, and parking accommodations, for instance - as well as extra-curricular student activities are funded through student fees. A few campus buildings, like the future Leeolou Alumni Center, are funded through special private fund-raising efforts and partnerships.

In addition, a combination of state funds and student tuition is expected to cover all of JMU's academics and academic support needs for a student body that has increased from 11,500 in 1994-95 to 15,000 in 1999-00, a 30 percent increase.

So while the state pays a hefty share, it's not enough to address critical academic initiatives and needs at JMU.

"If you look at the educational and general budget, which is the combination of state-taxpayer-dollars plus tuition, JMU is at the very bottom in terms of dollars-per-student of all Virginia's four-year institutions," says JMU President Linwood H. Rose. "In terms of tax dollars only, we are third from the bottom among the comprehensive and doctoral universities. Only Radford and Longwood are below us, yet our tuition is already one of the lowest in the state."

And JMU's days of dizzying physical growth have ended. "We have built the institution. Now it's time to flesh it out," says Rose. "It's time to switch our focus from funding physical campus growth to funding new programs and upgrading the ones we have. To do this, we need to increase the university's private funding base. I want to create an environment in which students have the best comprehensive undergraduate experience in the nation."

For the past several years, JMU has concentrated its fund-raising efforts on annual giving, now called the Madison Fund. These are usually smaller gifts (under $250) that are funneled directly into the university's operating budget. The university spends these funds as they come in. The challenge now is to up the ante. That means continuing to receive those annual gifts while focusing on increasing JMU's endowment. That's money in the bank.

"Since a university's needs recur each year," explains Ray Sonner, president of the JMU Foundation, "either funds must be raised annually to meet these needs, or another more permanent solution is necessary - meaning private endowment dollars."

Major gifts from alumni and friends build endowment, and the principal of that endowment is invested in stocks and bonds. A portion of the investment income is returned to JMU to meet essential needs and fund inventive programs. The rest goes back into the endowment to make it grow.

For example, an essential area of need at JMU is student scholarships. Director of Admissions Michael Walsh explains, "Endowment dollars earmarked for scholarships allow JMU to recruit high-quality students. But, just as importantly, we need to retain the high-quality students we already have. In order to compete with universities with larger endowments, JMU needs to be able to offer the same enticing financial aid packages and larger scholarships."

Money in the bank, however, is more than just an insurance policy for student aid and faculty development. There are numerous examples of how private funding can be a deal maker or breaker. Professors have become experts in financial juggling, creating their own mixes of project funding with grant monies, state funding and partnerships.

Donna Amenta, chemistry professor and department head, explains, "Scientific equipment does not come cheap. We funded a $350,000 nuclear magnetic resonance instrument through a unique funding mix and a regional partnership. JMU's NMR regional site was funded with a successful National Science Foundation grant proposal, matching state funds, a donation from the Merck Foundation and monies from Eastern Mennonite University and Bridgewater College. By seeking funds from five different sources, we've made this highly technical instrument available to JMU students and other college students in the region."

But purchasing is only one aspect of the complicated funding process. "JMU also needs funds for everyday maintenance, repairs and replacement of this highly technical and expensive equipment. Endowment dollars would help us to be constantly moving forward and keeping up with technology," adds Amenta.

There are similar needs all around the university - including stipends for undergraduates who cannot afford to stay on campus during the summer to complete time-sensitive research; financial aid for students to study abroad and experience the global community and economy; adding professors and resources to expand the capacity of high-demand programs to accommodate additional majors. The list goes on.

Rose adds, "To keep JMU on the cutting-edge and to build its reputation in higher education we need the support of our alumni. The University of Virginia, William & Mary and Virginia Tech have aggressively built their private endowments, which range from $330 million to $1 billion. That allows them to offer more scholarships, cutting-edge programs and state-of-the-art facilities, all of which attract world-class faculty members and students. JMU, which has a $23 million endowment, needs that same flexibility. What we do here is transform students' lives. We offer them life-altering experiences and arm them with the skills and knowledge needed to lead successful lives. Every day, professors personally influence the students they teach and mentor, and we need to nurture that environment so our teachers can work their special magic with students. Now, we're asking alumni to become part of that experience and to help JMU to change students' lives."