"I have spoken often with leaders of efforts to improve European and Asian higher education," wrote one John L. King in 2007 in a comment on a Business Week story.
"When they ask me what I see as the greatest challenge to their goal of replicating the strength of U.S. higher education, I tell them it is their lack of strong private colleges and universities. The U.S. leads the world in higher education because of the intense competition between public and private institutions at all levels.
"Segregating privates and publics as 'haves' and 'have nots' would destroy the most powerful mechanism of U.S. dominance in higher learning."
And there you have it: a few sentences that both explain and justify UND's transformative new endowment campaign.
By undertaking its $300 million endowment drive, UND is taking advantage of "the most powerful mechanism of U.S. dominance in higher learning": competition, specifically competition with peer public institutions as well as private colleges and universities across America.
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In order to keep up with the Joneses -- really, with the University of Minnesotas, the University of Montanas and the Hamline universities of the region and nation -- UND needs a new source of money. And that source can't just be stable. It has to be better than stable: The revenue it generates must grow faster than inflation, maybe even a lot faster if trends in university finance continue their decades-long rise.
That's where a strong endowment comes in. Suppose a billion-dollar endowment generates a 10 percent or $100 million annual return (not unusual in the world of high-end higher ed endowments). The university likely would spend half of that ($50 million) on financial aid, endowed professorships and other improvements.
The other $50 million would be reinvested, growing the endowment by 5 percent -- enough to beat inflation and then some.
Furthermore, the endowment also would grow through annual fund drives and major campaigns, exactly as UND's own endowment -- much smaller than a billion dollars, but just wait -- is being grown now.
UND's ambitious effort is somewhat new in North Dakota but not around the country.
Once upon a time, private colleges and universities were the only ones that needed endowments to supplement tuition and other revenues. Public universities got their supplemental income from the states.
That was then. This is now: Two trends have upset that textbook cart. First, most states (except, importantly, North Dakota) have cut their financial support of state universities.
Second, private university endowments soared in the 1990s and early 2000s, generating astronomical income and setting very high standards for college.
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Climbing walls and wellness centers aren't even the half of it. Take financial aid: Harvard now is so rich that it pays the full tuition and room-and-board costs for every student whose family income is less than $60,000.
That mean students from a typical North Dakota families now can attend Harvard -- or Yale, Stanford, Princeton and several other well-known schools -- for less than it costs to attend UND.
If North Dakota wants to keep its top students in-state, it's going to have to strengthen its financial aid programs. That's part of what UND's stronger endowment is going to do.
No, the university won't be as generous as Harvard. But it doesn't have to be. Aspiration, not imitation, is the key. Just as the Mayo Clinic sets the standard for upper Midwestern health care, and just as Grand Forks and Fargo hospitals are better because of their need to compete with Mayo, so too are North Dakota colleges better because of the high standards set by Harvard.
UND's endowment drive is Exhibit A.
With this move, UND is securing its spot in America's lineup of world-class universities. To perform at that level in 2010 and beyond, public colleges and universities now need strong endowments. That's exactly what UND's leadership is trying to provide.
-- Tom Dennis for the Herald
