Spending to make money

About two years ago, while reviewing designs for the new College of Charleston basketball arena, Bobby Marlowe suddenly realized something was missing — a president's suite.

"I had always assumed there would be some type of box there for entertaining and donor cultivation," said Marlowe, chairman of the university's board of trustees. "But it wasn't included. It was an oversight."

And given the college's long-term fundraising strategy, he said, it was a serious omission. State funding for the school has declined dramatically over the years, so "we have no choice. We've got to raise private dollars."

With the arena already under construction at the time, university officials reconfigured the design to include an upper level suite at mid-court, a move that added about $211,000 to the project's $44 million budget, a Post and Courier Watchdog examination of construction documents shows. Marlowe described the suite as an investment, not a luxury.

"We'll raise a lot of money entertaining people with that," he said, adding that the university felt the same way about the recent $800,000 renovation of the president's formal residence and gardens at 6 Glebe St.

Welcome to the new world of state-supported

higher education, where college presidents and trustees increasingly agonize over ways to make their well-heeled visitors, alumni and other potential donors even more comfortable.

This push for perks reflects a nationwide trend that's a hot topic in education circles but generally off the public's radar: From the College of Charleston to the University of Virginia, state-supported universities are getting less money from taxpayers. As a result, many educators say state-supported universities have little choice but to mimic private universities, which depend heavily on fundraising, high tuition and research programs that generate money.

"We are a fully public institution," said George Benson, College of Charleston president. But, "we're being forced to act like private schools."

Many educators say this trend has widespread implications for an education system that helped create the nation's middle class and became the envy of the world's researchers. They worry that declining government support and a shift toward privatization is leading to higher tuition and fees, making it more difficult for lower-income students to get degrees. Some fear that as administrators spend more time catering to millionaires, they lose sight of students' needs.

A few institutions, such as Coastal Carolina University, are even thinking of going "charter," a move that would give them more freedom to bring their operating models even closer to those of private universities.

"Since the time of Thomas Jefferson, education has been looked upon as a public good, established to benefit all of society," Graham Spanier, president of Penn State University, said in a symposium on the future of public universities. "That has been our legacy. But that legacy is at risk."

'A new era'

As the Baby Boom generation came of age in the 1960s and 1970s, the nation dramatically expanded its public higher education system, a move that experts have long credited with helping untold numbers of people get degrees and good-paying jobs, as well as boosting the nation's global research capabilities. Today, America's public institutions still educate about 75 percent of the nation's 17.5 million undergraduate students.

But in the last seven years, South Carolina's contributions to its public universities have dropped 20 percent. Meanwhile, average annual in-state tuition has more than doubled, rising from about $4,134 to more than $8,537, according to the state Commission on Higher Education. "There's a direct correlation between shrinking state support and increasing tuition," Clemson University President Jim Barker said.

At the College of Charleston, roughly 30 percent of the school's budget in 2000 came from the state. Now, with the recent budget cuts, the state provides 14.3 percent. Meanwhile, tuition for in-state students at the college more than doubled, rising from $3,630 in 2000 to $8,400 this year.

"What's happening in South Carolina and elsewhere around the country is that we're gradually privatizing public education, one step at a time," Benson said. "That is making private fundraising that much more important. Here at the college we're in a new era."

The high-price, high financial-aid model is typical of private colleges, but many top educators worry that students will suffer under this kind of structure. "Do you want higher education to drift off into the stratosphere in terms of price?" Benson said. "Do you want education to be only for the wealthy? I think the answer is no."

Perks for donors

At the College of Charleston and other public institutions, leaders are facing this trend toward privatization with a mixture of anxiety and gusto. While they talk about rising tuition, they also tout their new fundraising efforts. Barker estimated that he spends 50 percent of his time fundraising.

At the College of Charleston, officials are preparing for a major capital campaign, and one of the reasons the board of trustees chose Benson as president two years ago was because of his fundraising record, Marlowe said.

This emphasis on capturing cash from donors means the College of Charleston and other public universities must rethink the way they do business, Marlowe said. And that sometimes means spending money to raise money, he said.

Such was the case with the school's renovation of the president's home on Glebe Street.

Benson said he and his wife, Jane, had their first look at 6 Glebe St. about two years ago when interviewing for the president's job, a position he ultimately accepted.

"My first impression in terms of its history was, 'Wow,' " Benson said. The Georgian-style home was built in 1770 with 18-inch walls and 12-foot ceilings, and the college had its first classes on its ground floor. John Rutledge, delegate to the first and second Continental Congress, died in the house. It is a National Historic Landmark. "That house is the College of Charleston," Benson said.

He was less impressed with its condition. The home's grand staircase was in danger of collapsing. "I had also noticed during the tour that the bathrooms weren't in very good shape." To get in one bathroom, people had to step sideways, "and then hang on to the sink to use the toilet." That wasn't exactly the way he wanted to impress future donors.

"My goal is to bring people from around the world and around the country to the College of Charleston, to get the college connected around the world to major donors and major chief executive officers, and they're going to be spending time in that house, sleeping in the house, going to the bathroom in that house, and I want them to be comfortable visiting that house."

The interior renovation began in early 2007 as the Bensons arrived. The college spent about $500,000 to fix the staircase, redo bathrooms and renovate the interior. The ground floor, which is sometimes used for conferences and other gatherings, got new gas fireplaces and a 50-inch plasma TV. Windows got new drapes.

After the interior renovation, the college spent about $300,000 to redo the home's driveway and gardens, turning what used to be a nondescript parking area into what Marlowe described as a new venue for fundraising and other college functions. "This was an investment," he said.

So was the decision to build a presidential suite in the new College of Charleston arena.

Though the project added more than $210,000 to the arena's cost, "we've already received a return on the investment," Marlowe said, adding that the college received a $100,000 gift from George W. Fennell, founder and president of Fennell Holdings Inc. "We'll raise a lot of money entertaining people because of it," Marlowe said.

Benson added that it also "creates a networking environment" because "when you're locked into (fixed) seats the whole game, you can't talk to anybody. This provides ability to flow and move around and interact with people and tell about the program at the university. It's designed with fundraising in mind from beginning to end."

Is it elitist to have a special suite? "No, it depends on your definition of elitist, I suppose," Benson replied, adding that most modern arenas have suites, and that the box probably will be used by other departments. He said that instead of calling it the president's suite, "I've been encouraging people to call it the Cougar Suite."

A 'negative effect ...'

As public universities and colleges focus more on fundraising, they're also raising tuition and creating academic programs that generate revenue.

University of South Carolina President Harris Pastides said the drop in state support has forced the school to behave more like private colleges, "and that's not all bad." It also spurs schools to be more entrepreneurial, he said. But public universities also have to be careful not to be more responsive "to where they get most of the money" than "the flagship responsibilities of educating the sons and daughters of South Carolina."

In an op-ed piece for The Post and Courier, Medical University of South Carolina President Dr. Raymond Greenberg noted that the state provides the institution a small percentage of its budget - $1 for every $17 the university takes in, about 6 percent. While the state gets most of its revenue from patient fees, grants and other programs, these funding sources often must be used for specific purposes. State money is more likely to be used for teaching students.

"Declining state support for health care training today will have a direct negative effect on the quality and availability of health care for South Carolinians in the future," Greenberg wrote. "... the falling state investment in MUSC is surely pushing us in the wrong direction."

Benson said he's concerned that the debate about the decline in government support for public institutions is "happening without much discussion and without much vetting on a national level," he said, adding that he spoke with President-elect Barack Obama and Sen. John McCain when they came to the campus earlier this year. "I've yet to hear them talk about it on the campaign trail."

But he said public universities are partly to blame for this. The academic world "could do better at spreading the word about what we do and that we're on the edge of the abyss."