Thanks to endless fundraising, an explosion of regional giving, and a historic bull market, universities continue to raise staggering amounts of money earmarked for capital projects. A closer look at the mechanics of these gifts reveals an intriguing amount of diversity in terms of what is motivating donors.
For instance, 2018 saw huge donor support for the construction of university-based medical centers, research hubs and hospitals. Donors often view these buildings as drivers of regional development in an era when healthcare is a key factor in local economies. A similar kind of logic often underpins support for new museum wings and other cultural projects. Many higher ed donors subscribe to the theory that the arts don’t just enrich life on campus, but create more robust and appealing local communities.
Another striking and cash-flush manifestation of the university building boom is currently playing out across the country’s elite engineering schools. Caught up in an intense competition to recruit in-demand, high-performing students, schools are rolling out increasingly expensive and glimmering facilities, and donors are more than happy to foot the bill for this gold-plated educational experience.
Consider recent developments in Pittsburgh, where the Allegheny Foundation gave Carnegie Mellon University (CMU) $30 million—the largest gift in the foundation’s history—earmarked for the construction of its new Scaife Hall for the College of Engineering. The new building, according to president Farnam Jahanian is “the latest investment in our multi-year effort to provide cutting-edge education and research spaces” for Carnegie’s College of Engineering.
Jahanian said, “We are grateful to the Allegheny Foundation for making the lead grant to jump-start this project,” which will “further strengthen our dynamic and growing mechanical engineering program.”
Capital Project as a Recruiting Tool
The law of scarcity tells us that when demand outstrips supply, universities have to get creative in order to attract scarce high-achieving and high-income students. The law applies to the higher education space writ large as the number of college-age students continues to shrink, and it’s why, according to Robert Kelchen, a professor at Seton Hall University's Department of Education, we see universities rolling out controversial amenities like rock climbing walls and lazy rivers.
As far as the upper echelons of American engineering schools are concerned, recruiting high-performing students often involves state-of-the-art buildings, labs and classrooms. Nor is this recruitment strategy limited to students. All across higher ed, donors are giving big to help universities recruit superstar faculty, as well. To see this phenomenon play out with startling urgency, let’s briefly turn our attention to the Pacific Northwest.
Almost two years ago, we looked at the University of Washington’s (UW) plans to construct a new computer science building. UW had a goal of raising $70 million privately, and local tech funders like the Zillow Group, Microsoft, the Bill & Melinda Gates Foundation and Amazon happily obliged.
Back in September, GeekWire took a tour of the new building, now called the Bill & Melinda Gates Center for Computer Science and & Engineering, which will open in January. The final price tag stands at approximately $110 million, as the state chipped in $32.5 million and the UW contributed $9 million. It ain’t too shabby.
Across the street from the new building stands the Paul G. Allen Center for Computer Science & Engineering, which opened in 2003, thanks to a $14 million donation from Allen, who passed away earlier this year. The school was named in Allen’s honor after he gave UW another $40 million prior to his death. (According to UW, not a cent of Allen’s gift went to the new Gates center.)
Add it all up, and the investments find UW making a concerted effort to compete with MIT, Carnegie Mellon, Stanford and Berkeley for faculty firepower and top-tier students, according to UW’s Ed Lazowska, a professor of computer science who led fundraising efforts. “The goal here is, instead of there being top-four program, to be a top-five program, and for us to be the fifth,” he said, with the kind of specificity one would come to expect from an engineer.
As we’ve seen, UW has been incredibly successful on the fundraising front. But the school is growing so fast that it hasn’t been able to hire enough faculty. “That’s because it is a dog-eat-dog world for the best people,” Lazowska said. “And we are fighting with Stanford and Berkeley and MIT and Carnegie Mellon, and basically nobody else, so it is pretty fast company.”
UW’s Computer Science and Engineering school is now enrolling 480 new undergrad students annually, up from 170 just a few years ago, to meet the Seattle region’s insatiable demand for engineering graduates.
Building Boom at Top-Tier Schools
In July, the German chemical company BASF SE gave UC Berkeley $7 million toward the construction of a new state-of-the-art, interdisciplinary research science facility. Dubbed the Berkeley Science and Engineering Hub, the new center will bring together chemists, biologists, engineers, computer scientists, ecologists, social scientists, policy experts, economists, entrepreneurs, and industry and civic leaders.
A few months back, billionaire financier Stephen Schwarzman gave MIT $350 million to establish a new College of Computing that will bear his name. The college will include a new building serving as a hub for computer science, AI, and data science.
And while Harvard wasn’t on Lazowska’s list of elite schools, it famously netted $400 million from John Paulson to endow its School of Engineering and Applied Sciences a few years ago.
This is the world that Carnegie Mellon University fundraisers are living in, which explains why its new Scaife Hall, which will focus on “expanded, technology-rich labs, modern, flexible classrooms, and spaces that facilitate formal and informal collaborations,” comes with a hefty price tag of $75 million. The new project brings Carnegie Mellon’s total infrastructure investment in engineering over the past decade to more than a quarter-billion dollars.
A shared history between Carnegie Mellon and the Allegheny Foundation also factors heavily into the gift. The original Scaife Hall was named after Alan Scaife, a longtime benefactor of Carnegie Mellon and the father of controversial conservative industrialist Richard M. Scaife, who founded the Allegheny Foundation.
The Pittsburgh-based foundation, which supports Southwestern Pennsylvania initiatives in the areas of education, civic development, and historic preservation, has previously supported projects in CMU's Mellon College of Science and School of Computer Science. These kinds of partnerships have made Pittsburgh a university-centered technology hub and the gold standard of Rust Belt economic revitalization.
To that point, it’s worth remembering that donors have been funding construction projects since the dawn of philanthropy. Only now, as often noted, there's more money than ever sloshing around.
According to a recent study by the Council for Aid to Education, 41 percent of the $43.6 billion raised by universities in 2017—$17.8 billion—funded capital expenses, representing a 12.3 percent increase over 2016. And fundraising budgets during capital campaigns increased by an average of 65 percent, according to the Council for the Advancement and Support of Education.
More money invariably leads to more specialization, which explains why we’re seeing donors support construction projects to transform universities into world-class medical centers, engines for economic development, and destinations for world’s best and brightest engineering students and faculty.