chuckstaben Advancement, On being a president

Advancement after Covid-19

Colleges almost certainly will face funding challenges in Fall 2020 and moving forward. How might this affect advancement, and how should a president prioritize fundraising?

The most important change is to focus on current dollar and immediate use. Donors will recognize the immediate difficulties, and strong supporters are likely to want to help. If you have been working with a donor on a $100,000 endowment gift, encourage them to make a $5000 gift today, or even better to make a $10,000 gift today, and to move the endowment plan into their estate. If the donor is committed to an endowment, suggest they at least “jumpstart” it with a current gift equal to the expected yield of about $5000, as almost all endowments payout in arrears, and you need their support now.

With the decline in the stock market, some endowments, particularly recent ones, may be “underwater” in that the current value is less than the original donated funds (actually, less than the permanently restricted fund). Though foundations have more flexibility today due to changes in UPMIFA, if the underwater endowments are recent, you may be able to contact the donor for permission to alter the agreement or at least to get their approval if you hope to expend from an underwater account (without violating any restrictions, laws, or covenants!)

During the 2008-2009 recession, many foundations changed spending policies to decrease payout, which put additional financial stress on students and institutions. Of course, a president must work with the Foundation Board or equivalent to ensure prudent use of funds, but it is worth emphasizing to the Board that good spending and investment policies are intended to assure generational equity; it is time to rely on those policies, take a long-term outlook, and keep supporting the institution. Historically, the stock market DOES bounce back.

Of course, many donors are likely to feel alot of uncertainty in the coming months. My experience is that one must stay positive, stay engaged, and that strong supporters will always return to their love of their institution.

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Reading List

If you don’t have time to read…you don’t have time to lead.

Of course, as President…you don’t have alot of time. So, just a few suggestions of books that I have found, over the years, very informative or influential.

On the general business/management side, some obvious choices:
Bolman and Deal and reframing present several classics, but the shorter version focused on education is: Reframing Academic Leadership, Bolman and Gallos. There is a version of Good to Great that recognizes the differences between education and business: Good to Great and the Social Sectors, Collins. Not as popular, but influential to me is Drive: The Surprising Truth About What Motivates Us, Pink. Short, and I think very applicable to academics in particular. More recent, and excellent, is Start with Why, Sinek. I know there are many other excellent choices…and I’d love to hear your recommendations.

On the higher ed side, I have some favorites:
Designing the New American University, Crow, Dabars is a vision that does not fit all universities, but I think is particularly appropriate to research universities and gives a great picture of the role of higher education and how we can meet our country’s needs.
The Innovative University: Changing the DNA of Higher Education from the Inside Out, Christensen, Eyering is a great comparison of Harvard and BYU-Idaho that will stimulate you to think about your mission rather than just trying to be Harvard.
Locus of Authority: The Evolution of Faculty Roles in the Governance of Higher Education: Bowen, Tobin provides a better understanding of faculty governance…but I wish that Faculty Senates would read it as I think they have abdicated, at many universities their important and appropriate roles of overseeing the curriculum and establishing professional expectations of faculty to wanting to run the mundane details for which we hire folks like our VP Finance.

Don’t forget to do your recreational reading…be sure to read the university’s Common Read, for example as well as some impactful or best sellers…your public and donors expect you to be well-read and well-spoken!

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Intellectual property

The Bayh-Dole Act of 1980 had a najor legal and psychological effect on universities with respect to intellectual property (IP).  Prior to that act, intellectual property that resulted from federal funding (NIH, DoD, NSF) often was the property of the government, but the Act moved ownership to the university.  Universities became much more aware of IP, and frankly, much more possessive.  Unfortunately, that possessiveness has, in many cases inhibited interactions between universities and industries that I believe can be mutually beneficial, much more so than owning IP that often has limited value.

There are several examples of universities with extremely valuable intellectual property:  Lyrica has earned Northwestern over $1.3B, Carnegie-Mellon’s disk drive noise reduction technology has earned $750M, Google earned Stanford $336M, and Gatorade has made the University of Florida over $280M, to name a few.  Blockbusters like these are the exception, however, not the rule.

AUTM’s (Association of University Technology Managers) latest report shows 7625 US patents issued to US universities in 2018 and over $2.9 billion in licensing income.  Nevertheless, the bulk of that licensing income came from a very small number of “blockbusters” like Lyrica and Gatorade.  Typically, only the top 20 or so licensing offices actually generate income in excess of costs and most patents generate no income at all.  The unfortunately naïve perception of many boards is the opposite…that the university has a great deal of valuable intellectual property and that we are letting it just walk out the door.

Though it is difficult to predict a blockbuster, and one should certainly try to protect discoveries that may yield them, I believe that the larger “pot of gold” and the greater societal impact is to have by less restrictive, less grabby IP policies.  Industries supported over $5 billion in sponsored research at US universities last year-almost twice the licensing income.  Additionally, engaging ones’ university with industry has payoffs in workforce development, engagement of professors with state-of-the-art industrial work and facilities, and often brings economic development capital.

So, what is a reasonable model?  I believe that for most research contracts with industry, an “agree to assign” or “first option” is reasonable.  Industries are much more likely to sign such contracts, allowing them to support your faculty and students and move projects forward.  Yes, you might lose some licensing revenue, but ensuring the success of a local industry will bring you a strong supporter.

As a practical matter, when I arrived at the University of Idaho, we were at a 5 year logjam in contracting with a local industry over restrictive IP attitudes.  After liberalizing our policy, we not only got a sizable grant, but the company endowed a chair ($2M), and engaged with us to now found a center to sponsor ongoing research, with a further $1.5M donation in support of the Center.

Bottom line…industry is usually better than universities at commercializing intellectual property-our strength is usually in basic research.  Consider liberalizing your IP policy in most cases, and I suspect you will see more industrial grants and greater interaction.  Remember, our job is to generate knowledge and to disseminate it-we spend money to generate knowledge…not generate knowledge to make money.