Penley to delegate authority, focus on fundraising

 CSU Administration  Comments Off on Penley to delegate authority, focus on fundraising
Sep 092008

By J. David McSwane

Following a national trend of public universities seeking private dollars to offset state funding shortages, CSU President Larry Penley is spending more time on the road, seeking alumni donations, research grants and working to increase the school’s national prominence, administrators said last week.

Under what the university is calling “a strong provost model,” a significant shift of responsibility has been transferred to Tony Frank, senior vice provost, and John Lincoln, executive vice president, who will respectively oversee the academic and administrative duties of the president.

“Larry’s got a really complicated job,” Frank said. “Presidents probably spend more time dealing with fundraising and legislative affairs than they used to.”

Challenged by a $832 million shortfall in the state’s funding of higher education compared to other states, Penley has refocused his efforts to “people tactics,” probing private donors, business partnerships and competing for research grants that fund the university’s highly publicized “Supercluster” initiatives, which are hoped to meld academic research into a capital-generating venture for the university.

Penley’s efforts are similar to what private universities, devoid of public support, must do to remain competitive.

In fiscal year 2008, the university raised $79.5 million in private funds and spent a record-breaking $303 million in research expenditures, most of which came from the federal government.

The research dollars – which legally can’t be funneled into the academic operations of the university and ease strains there – address CSU’s mission as a land grant institution and increase the visibility of the school, administrators said.

“When you go out to get a job, your degree will be worth more because of these efforts,” said Brad Bohlander, Penley’s spokesperson, adding that overall the university is “much better off” than before Penley took over in 2003.

“It is a transition. It is a shift,” Bohlander said.

But the efforts will not help offset the financial burden on students and parents, and some scholars say Penley’s efforts might not be all that helpful to the university.

Jim Hearn, a professor with the Institute of Higher Education at the University of Georgia, said studies show technology transfer initiatives like Superclusters can create net losses and can’t replace state support.

“While revenue diversification is an understandable approach for public universities facing financial challenges … none of the potential
alternative revenue streams holds much promise as a substitute for state
support of undergraduate education,” Hearn said in an e-mail interview. “It is not at all clear that institutions consistently receive net financial benefits from pursuing technology transfer, federal and foundation research grants, and the like.”

And the recent focus on research grants has drawn some criticism at CSU.

“What’s he raising money for?” said John Straayer, a CSU political science professor who specializes in state governments. “Is he now going to go out and raise money for tuition relief? … It can’t do a whole lot for the instructional side even if you bring in research dollars in the train loads.”

But Penley’s new focus on private funding won’t replace the university’s lobbying at the state level and working with state legislators, Frank said.

“Certainly, fundraising is an important aspect for any university these days … one of the expectations of any president is to have effective fundraising efforts,” he said. “I think Larry works pretty effectively with legislature and the governor.”

The president’s recent efforts are noticeably different than his previous attempts to battle for scarce state dollars and increase the university’s greatest revenue stream, tuition, which accounts for about half of the school’s budget.

In 2006, Penley submitted a last-minute amendment to the state budget that would have effectively raised tuition about $1,200 per student in one year, but the addition was defeated when student government lobbied against the increase.

Penley drew fiery criticism from students and the state legislature and publicly clashed with Gov. Bill Ritter, accusing him of “holding down CSU’s ability to serve its mission.”

The failed tuition increase – arguably the only option for the financially starved CSU system – illuminated the dire need for reform in funding for higher education in Colorado, which is dead last in the nation, according to a 2007 State Higher Education Executive Officers study.

While the dismal availability of funds from state continues to bog down CSU’s mission, Frank said, the university will continue to consider all sources of money.

“I think the (CSU Board of Governors) has had several discussions about what are innovative funding streams,” he said. “That raises a very long-term question: What does it mean to be a public university?”

Enterprise Editor J. David McSwane can be reached at