A Billionaire-Funded Campus Breaks Ground, Reshaping a University. Will it Pay Off?

 Photo:  Joshua Rainey Photography/shutterstock

Photo:  Joshua Rainey Photography/shutterstock

There’s stiff competition, but in an era of university mega-gifts, Phil and Penny Knight may very well be the donors who end up having the biggest influence on a state through campus philanthropy. 

University of Oregon broke ground this month on a $1 billion science campus, with plans for three 70,000-square-foot buildings, anchored by $500 million in matching funds from the Knights. The university is projecting an eventual $80 million annual benefit to the state as a result, and possible additional impacts from private industry that could sprout up, as optimistic officials anticipate. 

The commitment to the state school follows a similar $500 million matching grant the couple made to Oregon Health & Science University to build the Knight Cancer Institute scheduled for completion later his year. 

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Collectively, private donations from the Knights in support of university science facilities could make a significant impact on Oregon’s relatively modest research and innovation scene, its academic reputation, and the state economy. In fact, even if campus leaders and the Knights’ plans don’t go as well as they expect, the donations have already triggered remarkable shifts in terms of state dollars, university priorities and national attention.

The Knights clearly have high hopes that their wealth can spur Oregon on as a destination that can compete with the nation’s leading research hubs. But their giving to the University of Oregon, in particular, remains a gamble that hinges on some open questions. 

For one, the school still has to raise its half of the money, and so far, its requests for support from the state have fallen short of expectations. In 2017, the university sought $100 million in bond money, only to receive approval for half of that. The school then went back to the legislature sooner than expected, asking for another $40 million this year, receiving just half of that. That second round happened only after a commitment to use a set amount of a local timber product. Rep. Nancy Nathanson, a Eugene Democrat, said, “Overspending because you’re in a hopeful mood is not the right thing to do.”

School officials aren’t showing disappointment, but it's not a great start. You can understand why state leaders are hesitant. After all, it hasn’t been so long since the state authorized $200 million in state bonds to pay for a chunk of Knight’s other huge campus project at OHSU, leaving some leaders upset that the money didn’t go to other worthy needs. 

If the state balks at future funding requests, it's unclear whether the school can rally enough private donors to close the gap. The university had its best fundraising year in history in FY2017, bringing in $695 million including Knight’s $500 million, but before that, its biggest year was $215 million. Raising $430 million is a heavy lift for just one (big) project, not to mention the university’s other fundraising needs. 

Of course, the looming question is whether all of this will pay off, and Oregon will be able to boast universities in the top tier of scientific research, sparking local benefits to match. As experts told The Scientist, while it will clearly have a positive effect, the economic outcomes of building such research centers vary. It’s not a foregone conclusion that a new science campus will turn Oregon into a high-tech destination, or just what kind of impact it will have on the local economy. There’s also no guarantee that big federal research funding will follow once the campus is complete, as many other institutions compete for finite public resources.

One final issue—and something that OHSU faculty and state lawmakers wrestled with while securing the campus's own Knight donation—is whether such large matching funds are taking the institution in a direction that best serves its broader mission. It’s the same question a nonprofit faces when forming a new program, or a museum confronts when it builds a shiny new expansion using a big private donation.  

University of Oregon’s complex of new buildings is dedicated to speeding up the development of scientific discoveries into real-world applications, including forging tighter connections with industry and entrepreneurs. There’s clearly an expectation that this will lift all boats at the school, but there are other financial needs. Consider that tuition and fees for its 23,000-plus students have been steadily climbing, with in-state costs up nearly 80 percent since 2009. It’s not as though the Knight campus is taking over the entire school, far from it. But while the match is a gift, it’s also going to be a huge priority in terms of state requests and private fundraising in coming years. 

We've written before about how big risky capital projects, the kind that often excite billionaire patrons, can hijack institutions—preoccupying leadership, spawning infighting, alienating smaller donors, and sidelining other priorities. On the upside, the results of these gambles can be transformative when everything goes as planned. 

Regardless of how everything shakes out in the end, what's happening at the University of Oregon is yet another example of universities and other big nonprofits relying heavily on gifts from mega-donors, and how philanthropy is reshaping some of them in the process.