Private Funding for Public Education

Enrolment at B.C. universities continues to climb while funding dwindles, yet campuses resemble construction sites as one trophy building after another rises. Who’s steering the direction of public post-secondary education in the province?

UBC’s Faculty of Law at Allard Hall | BCBusiness
UBC’s Faculty of Law at Allard Hall.

Enrolment at B.C. universities continues to climb while funding dwindles, yet campuses resemble construction sites as one trophy building after another rises. Who’s steering the direction of public post-secondary education in the province?

It’s final exam time, and the bus loop at the UBC campus is a hive of activity as hundreds of bleary-eyed students shouldering giant knapsacks unload and disperse to their appointed lecture halls or to find a quiet spot to cram. Except for the smart phones, laptops and much more flattering sweatpants, the student body looks much like it did when I attended UBC as an arts undergrad, 20 years ago. But in the intervening decades, B.C.’s universities and colleges have gone through tectonic shifts. Government funding has been cut back drastically and universities are struggling to pay their bills, with collective deficits at B.C.’s post-secondaries reaching $179 million in 2010, more than double the $62.5-million collective deficit just four years previously.

Core funding to universities – primarily to pay faculty and staff salaries and to develop and maintain campus infrastructure – is the responsibility of the province, which provided $1.9 billion for the 440,000 students attending B.C.’s colleges and universities in 2011. But in the past 10 years provincial funding has dropped by 12 per cent. The past four years have been particularly brutal, with government slashes of $42 million in 2008 and another $70 million over the last two years. The 2012 budget is even worse for post-secondaries, the only publicly funded sector with reductions; that budget calls for a 2.2 per cent reduction in core funding and a slash of $100 million for capital infrastructure.

The results of the dramatic shift in funding are felt most by students, who now bear a significant share of core funding. The results are also apparent in new buildings and infrastructure, which increasingly bear the names of private donors, and in laboratory research activities that are increasingly driven by the needs of private industry.

Tuition fees have nearly tripled since 1990, so that students now shoulder over 40 per cent of their institutions’ core revenues, up from 12 per cent in 1979, while the provincial government operating grants that provide the majority of core day-to-day funding have declined dramatically, from almost 90 per cent to 58 per cent of university revenues in the same period.

As tuition fees increase, money for faculty has been shrinking. UBC has had cuts or net-zero faculty budgets in the past two years, while senior executive budgets have increased, including the fundraising department (called Development and Alumni Engagement), whose budget has more than doubled these past five years to $20.8 million.

SFU, like so many campuses in B.C., has cut operating budgets to most faculties between 2008 and 2012, including cuts of nine per cent to applied sciences, seven per cent to health sciences, five per cent to arts and 12 per cent to faculties at SFU Vancouver. While budgets for administrative departments increased by 72 per cent between 2003 and 2009, the share of the university’s operating budget devoted to academic salaries for SFU’s more than 940 faculty has decreased from 35 per cent in 1989 to 28 per cent by 2010, even as the student body has grown 68 per cent in the last decade.

To fill the teaching gap, SFU has increasingly relied on sessional teachers, essentially contract workers paid $5,800 per course; SFU has about 2,300 sessional lecturers. At UBC, sessional instructors make up more than 24 per cent of faculty and conduct more than 70 per cent of undergrad teaching in some departments. “That’s a really brutal, low-cost model for teaching,” says David Mirhady, chair of SFU’s Department of Humanities and a UBC grad.

Tenured and tenure-track professors are feeling the crunch. In a 2008 survey of faculty by the SFU Faculty Association, over half of respondents cited “unmanageable workloads” and felt that “teaching is undervalued at SFU” and 75 per cent reported frequent stress, with almost half reporting psychological health problems.

Nobody is feeling the cash squeeze more than the students. The province eliminated its student aid program in 2004, and student loans shot up 47 per cent. B.C. now ranks lowest in Canada for student aid, first in Canada for student-loan interest rates (prime plus 2.5 per cent) and second in the country for student debt, at $27,000 average per student. The future doesn’t look any brighter. The B.C. chapter of the Canadian Federation of Students estimates that by 2014 cuts will total another $41 million. With no new student aid in the 2012 provincial budget and a freeze on grants until 2014, the B.C. government will spend $78 million on non-repayable grants, a cut of 22 per cent since 2008. Last year B.C. students and their families paid more than $1.28 billion in tuition and the total cost of a four-year undergrad degree in B.C. is more than $50,000. Meanwhile, the federal government removed the $15-billion student debt ceiling along with a parliamentary oversight of lending limits, which stakeholders worry will cause the student debt to skyrocket even further.

With the Quebec student protests in full swing at press time over a potential 75-per-cent tuition hike, it’s surprising that the SFU campus, known as Berkeley North back in the ’60s and ’70s for its radical left-wing activism, hasn’t seen any student protests since a six-year-long tuition freeze was scrapped in 2002, causing a 100-per-cent tuition hike over the following two years. “We had some demonstrations here, but nothing like Quebec,” says Mirhady. “B.C. students were won over by the argument that we needed to be on par with Canada. And I think they were somewhat deceived into thinking there would be more classes available and the university would be better financed. In fact, the provincial government simply decreased its level of funding.”

At the same time, the province started attaching new strings to funding in 2008, tying it to new and extensive performance measures, including increasing the number of students on campuses and accountability methods linked to the labour market, employment rates and the commercialization of knowledge. This spring the provincial government also passed Bill 18, which impacts universities’ boards of governors, which are responsible for all campus decision-making, including faculty hires and approval of private donations. Board members include the university’s president and chancellor, and a mix of elected faculty, students and staff. Provincial law requires that a board’s majority be comprised of community-based individuals appointed by B.C.’s lieutenant governor. During a legislative assembly debate in February this year, Advanced Education Minister Naomi Yamamoto said that Bill 18 is meant to strengthen governance and reduce potential conflicts of interest at the board level, by disallowing faculty and students with union positions or executive positions at associations involved in collective bargaining from serving on the board.

Image: Milos Tosic
Arthur Erickson’s once- elegant complex on SFU’s
Burnaby Mountain campus.

The cost of a world-class reputation

If funding cuts and the province’s insistence on more oversight and economic performance measures have eroded the quality of public education in B.C., you wouldn’t know it by touring UBC, which now ranks 22nd in the Times Higher Education World University Rankings, second in Canada only to the University of Toronto. UBC has built its world-class reputation in part by taking advantage of infrastructure grants from government to grow its campus with new buildings, and by transforming many parking lots that once peppered the campus into market housing, both in the heart of and on the forested fringes of campus. B.C.’s largest public university looks like a construction site, with cranes, excavators and construction crews everywhere. In this age of fiscal prudence, and on the heels of an economic downturn, how can the province’s biggest university afford such massive physical growth?

Many of the clues are literally written on the walls and emblazoned above building entrances bearing the names of the captains of industry who provide multi-million-dollar donations. There’s the renovated Sauder School of Business, the Robert H. Lee Graduate School, Allard Hall law faculty, the Centre for Interactive Research on Sustainability (with its BC Hydro Theatre and Modern Green Development Auditorium, named after a $3.5-million donation from a Chinese developer currently building market housing on campus) and the Walter C. Koerner Library. Coming soon to UBC campus: the Audain Art Centre and the Earth Sciences Building, which will sport a Goldcorp Teaching and Learning Wing, if approved.

We rarely hear about donation controversies in the media, but occasionally a powder keg erupts. When mining company Goldcorp Inc. provided a $10-million donation toward the construction of a new arts facility downtown, SFU and the province committed $30 million and $50 million respectively, the result of which is the Goldcorp Centre for the Arts, now a centrepiece of SFU’s downtown campus at the Woodward’s complex. The Goldcorp donation sparked a firestorm of controversy, with student and community protesters citing concerns about SFU’s donations-acceptance protocol and its part in the gentrification of the Downtown Eastside, alongside allegations of human-rights abuse at the mining giant’s global operations. SFU president Andrew Petter dismissed Goldcorp’s labour practices at far-flung mine sites as a “non sequitur” in funding discussions, but a glaring contrast here in the Lower Mainland is inescapable: while SFU’s downtown campus benefits from a shiny new arts centre, its iconic central campus in Burnaby is in need of repair.

Image: Milos Tosic
SFU’s Goldcorp Centre for the Arts in
Vancouver’s Downtown Eastside.

The gigantic quadrangle at the heart of SFU’s Burnaby campus is 49 years old, and on the rainy spring day of my visit, architect Arthur Erickson’s bold, elegant, futuristic complex is marred by orange pylons and crime-scene-like yellow safety tape. While the university develops market housing on Burnaby Mountain and expands its satellite campuses in Surrey and downtown Vancouver, recent SFU reports acknowledge a “massive deferred maintenance backlog” and “health and safety deficiencies” at the original campus because of “dramatic reductions” in provincial funding for infrastructure maintenance, down from $6.9 million in 2008 to $500,000 in 2011.

Of course, not all private donors seek public recognition, but the naming of buildings is one very visible outcome of private funding of public universities. Barbara Miles, UBC’s vice-president of development, explains that anyone pitching in about one-third of the total cost of a building, including furnishing and maintenance, might have the option of seeing their name on the building. “We’re guided by university priorities, and our job is to match those priorities with the agenda of donors. We broker the conversation,” explains Miles. Typically, UBC chips in the remaining two-thirds of building costs, though sometimes provincial and federal governments provide one-third of funding, which happened during the economic downturn when the feds earmarked over $200 million for infrastructure development at B.C.’s post-secondary schools, a move designed to create construction jobs. Many schools in B.C. got a piece of the public pie, with matching provincial funding.

At UBC, certain building costs are also downloaded to students. Sauder School of Business students agreed to chip in about $20 million through “building renewal” fees, with graduate students paying a one-time fee of $1,500 and undergrads paying $500 yearly until the business school’s building mortgage is paid off in about 35 years. Architecture students pay $350 yearly for the new Audain Art Centre. To help fund a new student union building, all of UBC’s 47,000 Vancouver students started paying a levy of $20 in 2008 that increases $10 yearly, with a cap at $100 by 2016. That should make for a giant donor wall.

Miles stresses that not all benefactors are clamouring to see their names in lights. When forestry tycoon William Sauder donated $20 million to his alma mater in 2003 (just after his six-year run as UBC’s chancellor ended), he didn’t want name recognition, but he acquiesced when business school dean at the time, Daniel Muzyka, and UBC’s president at the time, Martha Piper, explained that it would strengthen the business school’s branding, following a trend that began in the mid-’90s, when wealthy philanthropists started providing big donations to campus business schools.

Michael Audain, founder of Polygon Homes Ltd., says he never asks for name recognition. The art collector prioritizes funding for arts, with donations to Canadian arts organizations now totalling about $35 million. His support to B.C.’s universities includes $2 million to SFU’s School for the Contemporary Arts, $2 million to UVic’s visual arts professorships and $5 million to UBC for its new Audain Art Centre, the largest donation in UBC’s arts faculty’s history.

“I am aware that universities have always needed private contributions,” he says. “Indeed, as a student in 1960, I went door to door in Victoria with a pitch about turning Victoria College into a university. Universities play an important role in helping make B.C., and most particularly Vancouver, an international centre for the visual arts – a goal our family foundation strongly endorses. So it’s only natural that we try to modestly respond to some of their financial needs.” Audain says pitches typically come from university presidents, though he adds that “UBC is far too globally important for its president to initiate all the ‘asks,’ and in the case of the Audain Art Centre it was one of a group of projects pitched to half a dozen business community colleagues, by the dean of arts, at a small lunch arranged by my friend Bob Rennie.” Before Audain writes a cheque, he says, his foundation looks at budgets and feasibility reports, and UBC identified a need for a new visual arts building to replace the cramped, aging Fredric Lasserre building, named after UBC’s first architecture school director.

Image: Milos Tosic
The Walter C. Koerner Library at UBC.

Commercialization of public education

Funding partnerships involving government, universities and private donors extend beyond buildings to academic research, and here concerns over potential conflicts of interest touch even closer to the core mandate of public education. In 1999, University of Toronto professor and Nobel Laureate John Polanyi raised the issue publicly, with his claim that the commercialization of public university research threatens Canada’s universities because it prioritizes market-driven research over general research, which could be of broader benefit to the public. Other critics say industry-funded research chairs that pay more than basic professorships create a two-tier educational system.

In April this year, York University faculty rejected a $30-million donation from Jim Balsillie, then-co-chief of Research in Motion, to fund an international law program. While administration approved the donation, the law faculty voted overwhelmingly against it over concern that the donor wanted too much power over staffing and research curricula. UBC’s vice-president of research, John Hepburn, acknowledges it’s normal to expect some strings attached to research funding, but the difficulty lies in finding a balance between the priorities of the donor or industry partner and the university. Although he admits he isn’t familiar with the details, Hepburn suspects that York was “just being a little bit too pure” in refusing the donation; yet on the other hand, he says, “It’s completely unacceptable to any university for a donor to say: ‘You have to hire a specific faculty member and I’ll tell them what research to do.’ That would squeeze academic freedom.”

UBC has already raised $194 million in donations this year, up from $45 million in 2001; last year, about 19 per cent came directly from corporations, 22 per cent from foundations and the rest from alumni and “other” individuals and organizations. Twenty-one per cent of these donations were used for infrastructure development, 32 per cent funded research on campus and the rest was desginated for student support. This year, the department rolled out an ambitious new “Start an Evolution” donor campaign with a $1.5-billion fundraising target focused on building infrastructure, research capacity and student scholarships.

SFU’s overall research funding almost quadrupled between 1999 and 2009, and five per cent of research funding came from private industry last year, compared to two per cent in 2006. Overall donations to SFU more than tripled between 2001 and 2010 to $52 million; with 28 per cent coming from corporations, 19 per cent from “community friends” and 45 per cent from alumni. A significant chunk of the university’s recent donations came from Ryan Beedie, who donated $22 million to SFU’s business school, which was renamed after the local real estate developer. The donation funds the business school primarily through student aid, professorships and research chairs, which provide funding for expert research-focused faculty. Such chairs typically leverage a university’s ability to attract renowned academics and also industry partnerships.

UBC’s Hepburn points out that between 1997 and 2007 federal research funding more than tripled, and now represents 68 per cent of UBC’s $550 million in total research revenues, with the majority going to the Faculty of Medicine, followed by 15 per cent to science, 10 per cent to applied science and four per cent to arts. “A number of research chairs were created and we had huge expansion,” acknowledges Hepburn. “Prior to that, it was really tough to hire researchers and compete with American schools like Berkeley and Stanford. Now we can regularly hire people choosing between us and the big U.S. schools.”

However, Hepburn acknowledges that the healthy level of federal research funding isn’t all good news: “The bad news looking forward is that the feds are putting all new funding into industry to stimulate that sector, not into academic research.” That could endanger the pipeline of university research funding moving forward. New faculty researchers will have trouble securing government funding and may have to prioritize industry needs to fill the gap, or leave the country altogether, causing a brain drain. “I don’t want UBC to be a farm team for big European and American universities – not good use of taxpayer dollars,” acknowledges Hepburn. “It costs a lot of money to turn the 30-year-old researcher into a star 40-year-old researcher. We’re in danger of losing tomorrow’s star researchers.”

Another concern with commercial-intensive research at our publicly funded universities is that when spin-off companies “show signs of growth and success, they’ll typically get bought by big American investors or companies,” says Hepburn. “Then all the research goes south of the border. Research in Motion is our biggest tech company, but it’s tiny by Apple or Google standards.”

Vancouver real estate developer Nat Bosa, a generous donor to post-secondary education, is cynical about public funding and its impact on today’s youth. Born in Italy, Bosa grew up in a poor family and dropped out of high school, but the 67-year-old recently made two big donations to education: first to Capilano University, with a $6-million donation to build and fund a new film school at the North Shore campus, which opened earlier this year, and $5 million for a school for low-income kids in San Diego, his second home.

For the Capilano donation Bosa, who also owns two film studios on the North Shore, says, “You bet if I’m giving money I want to see the university’s financial plan. And you need to look at the institution from the top down. How many senior executives are on the payroll? What are they getting paid? But donations motivate others to step up. And it’s dangerous to horde money, so if it benefits kids, that’s great, because we baby boomers have destroyed the future for kids. We’re the villains, the hogs at the trough that take and take.”

When Bosa hears the grim stats about students shouldering so much of the burden of public education and contributing more to the provincial coffers than corporations paid in taxes last year (according to a Canadian Federation of Students release), he says: “That’s so wrong. We need to close the tax loopholes. I’ve paid tons of taxes and I’ve never asked the government for anything.” Though, he acknowledges that such things happen in his industry. “It makes me crazy to hear about developers wining and dining government, asking me, ‘Who do I need to talk to to get something done?’ The government talks about fiscal austerity, but bureaucracy grows like fungus and we wonder where the tax dollars are going? We’re loading up these kids’ futures like the back of a donkey.”

Audain, when asked for his thoughts on the critics’ viewpoint of a corporate-controlled state where cronyism prevails to the jeopardy of campus stakeholders and the public, he says he needs to give it more thought, but he concedes that, “I am concerned to hear that these days corporations do not seem too interested in supporting cultural studies on campus. Without art, literature, music, theatre and dance, our civilized world would just remain a jungle.”

David Turpin, UVic’s president for the past 10 years, thinks private-sector funding isn’t problematic. (UVic’s donation revenues have actually decreased slightly this past decade to $21.2 million last year, yet it ranks an impressive 177th in the world according to the Times Higher Education rankings.) “Industry understands that universities are central to our social, cultural and economic development,” says the UBC alumnus, whose own final-exam recurring nightmare involves a last-minute realization that he’d registered for a course, but hadn’t attended a single class. Now the government is the bogeyman with its dramatic funding decreases alongside an abundance of self-serving measures that commodify campus life. “I’ve never had an issue with a donor trying to steer our path,” he says. “Yet the government tries to do that all the time.”