A Rising Tide: How the Higher Ed Fundraising Boom Lifts the Liberal Arts

Proponents of a liberal arts education have a right to be skittish in today’s higher ed fundraising landscape.

Schools continue to raise mountains of cash for STEM-related causes. Mega-donors are turning their attention to financial aid and the boosting accessibility for low-income students. And funders of all stripes remain infatuated with the promise of extravagant capital projects.

Yet throughout it all, donors keep giving to the liberal arts, thanks in no small part to the ongoing fundraising boom sweeping higher education. Consider news out of San Francisco late last year.

Alumni George and Judy Marcus gave $25 million to San Francisco State University to create the George and Judy Marcus Funds for Excellence in the Liberal Arts. The gift, combined with a recent $1.8 million athletics scholarship fund gift from the couple, represents the largest donation—$26.8 million—in the school’s history.

The new funds will support “major programmatic enhancements” in the department of creative writing and the school of cinema. San Francisco State’s creative writing department boasts an impressive cadre of accomplished faculty and alumni, including bestselling author Anne Rice and Pulitzer winners Philip Schultz and Rae Armantrout.

Meanwhile, the School of Cinema, according to SF State’s press release, is “consistently ranked one of the best film schools in the U.S. among public and private institutions.” SFSU’s claim checks out: According to the Hollywood Reporter, the School of Cinema clocks in at No. 21 in its list of top 25 American Film Schools. “What's attracting more applicants isn't just the school's broad curriculum covering everything from theory to production, but also its San Francisco-y attitude about filmmaking and creativity,” reads the article.

SF State’s recent fortunes provide an intriguing counterpoint to the school that ranked No. 6 on the Hollywood Reporter’s list, Orange County’s Chapman University. Chapman alumni Dale E. Fowler and his wife Sarah Anne made waves last year when they made a $100 million commitment to the historically liberal arts school. Almost half of the gift—$45 million—was earmarked for Chapman’s new engineering school.

While Chapman clearly isn’t abandoning its roots, it isn’t very often that a liberal arts school goes all-in on engineering to such an expansive degree. “This has been a dream for a long time,” said Daniele Struppa, Chapman's president. According to Struppa, the school has wanted to boost its national profile for quite some time, and embracing the sciences is key to this endeavor.

Diverse Support for the Liberal Arts

George Marcus is the co-founder of Marcus & Millichap Company, a real estate investment services firm. He is a trustee emeritus of the California State University Board of Trustees, serving from 1981 to 1989, and is a current member of the CSU Foundation’s Board of Governors. In 2012 he concluded a 12-year appointment as a regent of the University of California.

Judy is a former physical education teacher, the former board president of the Community Services Agency, and an active leader with the Humane Society Silicon Valley and Catholic Charities of Santa Clara County. Commenting on her gift to SF State, Judy said, “San Francisco State helped define our future, and it is our hope that this gift will do the same for students and faculty in the College of Liberal and Creative Arts now, and for many years to come.”

The couple’s gift suggests that no matter how intense STEM-mania gets, alumni understand the value of a liberal arts education and will continue to support schools that provide it. In fact, there’s a growing consensus across the donor community that the liberal arts can effectively complement the STEM model. Throw in traditional support for endowments and digitization projects, plus gifts earmarked for philosophy studies, and it becomes clear that the liberal arts funding space is more diverse and robust than one would initially suspect.

The liberal arts also have a reliable supporter on the institutional front, the Andrew W. Mellon Foundation, which boasts assets of $6.3 billion and an annual grantmaking budget of roughly $300 million. Last year, after Elizabeth Alexander took the reigns of the foundation, she made it clear the foundation will continue to be a bullhorn for the liberal arts.

“I think Mellon already considers itself to be the leader in this regard,” Alexander told the Chronicle of Higher Education’s Adam Harris. “And so, from that position, what that means is that the responsibility is not just about where the dollars go, but it’s also about convening power. It’s about—I won’t call it moral authority—but being in a position where you can bring folks together, and not only to pool their resources, but to pool their brainpower.”

Public Universities, Private Dollars

Another reason that the liberal arts are thriving involves the fact that universities raised over $43 billion in 2017. Money, as if by accident, will inevitably flow to liberal arts causes. Then again, there are no true accidents in modern philanthropy.

SF State is currently more than halfway through “BOLD. Thinking,” a $150 million capital campaign designed to bolster infrastructure and serve students, many of whom are immigrants from low-income backgrounds. The campaign is instructive on multiple levels.

While the State of California continues to fund a portion of the annual budgets for the 23 campuses and eight centers that make up the California State University system, Sacramento only contributes 40 percent of SF State’s total budget. “When I arrived in 2012, it was clear all across the country that states were dis-investing in public education,” said departing SF State president Les Wong. During the 2008 recession, the California State University system’s state funding was cut by roughly 40 percent.

This may sound familiar. In a higher ed space that finds state governments tightening the purse strings, public schools are increasingly turning to private donations to fill the gap.

Like many other schools turning to private dollars, SF State is essentially building its big-time fundraising apparatus from scratch. Campaign chair, alumnus John Gumas, wasn’t mincing words when he said, “This is the first campaign we’d ever done. We’re not fundraising experts.”

This can be a daunting proposition. Not only do fundraisers have to build a team, identify alumni, and craft a compelling message, they must also navigate the moral gray areas—e.g. gifts from dubious donors or those with “strings attached”—that can come with high-stakes fundraising. Further adding to a sense of urgency, President Wong noted that SF State is competing with nearby schools—the SF Gate called them “powerhouses”—like Santa Clara University and the University of California, Berkeley.

Trending Positively

As of early November, SF State had raised roughly $53 million from alumni. At the time of this writing, the campaign’s tally stands at $134 million, suggesting the school should blow past its goal before it winds down in 2020. This success is attributable to the fact that SF State has built a formidable footprint in the cash-flush Bay Area. According to the school, its impact on the regional economy surpasses $1 billion, in part because it is Silicon Valley’s third largest employee source.

SF State “funds a bank of talent” that fuels growth region-wide, Wong said. “It’s pretty hard for me to go anywhere and not run into an alum. We’re an intricate and integral part of the Bay Area, not only in the business sector but in social and nonprofit areas as well.”

In addition to the George and Judy Marcus gift, the school received a $5 million gift from Ken Fong, a venture capitalist and biotechnology consultant, to support interdisciplinary programs within the university’s College of Science & Engineering. Neda Nobari, a longtime Bay Area retail executive, is one of the campaign’s leading donors, thanks to a 2016 gift of $5 million that created the university’s Center for Iranian Diaspora Studies.

“Exponentially Greater Returns”

Lastly, consider the larger socioeconomic context at play as it pertains to SF State’s campaign.

Michael Bloomberg recently gave Johns Hopkins University $1.8 billion to help the school recruit more low-income students. A few weeks later, Ron Perelman gave Princeton $65 million to build a new residential college. The school plans to expand its undergraduate population, and in the process, accept more low-income students.

The gifts have triggered a lively debate around the best ways for donors to support this demographic at affluent schools that, in many cases, already provide generous financial aid.

Contrast this with the situation at SF State. As noted, the school was on the receiving end of a 40 percent cut in its budget post-recession. Despite these cuts, its tuition is among the lowest for any public university in the Bay Area and nationally, thanks to “prudent fiscal management.” Meanwhile, 60 percent of its students receive at least some form of financial aid. “Our students are talented, but don’t have the financial resources to go to a private university,” said Gumas, whose parents immigrated from Greece. “They’re first generation. They don’t have the means. That was me.”

Given these factors, the most rudimentary cost-benefit analysis suggests that donors who profess an interest in equity would divert contributions to struggling mid-tier institutions that primarily serve low-income students, rather than affluent private institutions that, in many cases, serve a mere fraction of such students.

SF State explicitly calls attention to this calculus. The campaign’s FAQ page reads: “Donors at all levels consistently describe how their support of SF State makes a more pronounced and measurable impact compared with donations to larger universities, public or private, which have longstanding fundraising programs and enormous administrative budgets.

“In short, a gift to SF State will result in exponentially greater returns in social, intellectual, and economic vitality.”