Why Universities and Foundations Should Get Together Sooner

Pete Ryan for The Chronicle

April 09, 2017

Much has been written about the broken business model of higher education, focusing on rising costs, ever-higher tuition, and mounting student debt. However, an increasingly important but rarely discussed issue is the weakening of the traditional partnership between universities (both public and private) and private philanthropic foundations.

We know that universities cannot fund themselves entirely through market mechanisms in part because they provide public goods — education and basic research — and require subsidies to survive. As many states cut their funding of higher education, with per-student spending declining by an average of 21 percent between the 2008 and 2014 fiscal years, donations fail to make up the difference for most colleges.

Although some university capital campaigns go into the billions, year after year more than 25 percent of total donations go to fewer than 1 percent of them, with institutions like Harvard and Stanford Universities and the University of Southern California leading the way. This is driven in large part by so-called mega-gifts of $100 million or more, $1.44 billion of which went to just four universities in 2015.

This funding landscape suggests that most universities must increasingly rely on philanthropies. However, the reliance on philanthropic funding is a problem. Many foundations have been moving away from the provision of "general support" for some time, and signs suggest that they will continue to move in that direction. Most foundations limit the percentage of funds available for general operating support to less than 25 percent. They are increasingly mission-driven and problem-oriented and want to invest in programs that deliver a measurable impact on societal issues.

This places pressure on universities to be responsive and demonstrate more clearly their contribution to the social good. But that is difficult when the common perception exists among foundations that universities as organizations often struggle with policy and social relevance and that they lack the flexibility to conduct real-time policy analysis or to encourage public engagement around current policy issues.

The result is a conceptual mismatch between what most universities are supplying through their basic research mission and what foundations are demanding in response to their investments. Universities would like to be able to claim that they produce the foundational knowledge that makes societal impact possible, and that while the long-term benefits are hard to measure they are both present and profound. That is probably correct, but it isn’t answering the question of immediate and measurable policy impact that foundation presidents and boards are asking right now.

Today, there are two common ways of linking that supply and demand. Foundations issue requests for proposals and university researchers respond. Or, university researchers try to persuade foundations to support their work. Sometimes this direct connection goes the other way when a foundation reaches out to a particular scholar (or a group of scholars) to fund an idea without using a proposal request.

The problem with both approaches is the unhealthy distance between foundations and universities, as problems and solutions coexist, mingle, and occasionally meet almost by chance. In the field of sociology, this has been referred to as the "garbage can" model of institutional problem solving, and it is famously inefficient.

One of the inefficiencies that is powerfully evident today is that when the garbage-can model "works," funding tends to go more heavily to established scholars at highly ranked institutions because those scholars and those institutions are best known to the foundation boards.

Focusing on big names at big-name places creates obstacles to encouraging a diverse set of scholars and perspectives. Under this model, younger scholars or those not at Ivy League and other top research institutions, including minority-serving colleges, face difficulties in having their voices heard unless they manage to get included in projects led by well-known academics at highly ranked universities. This can be a tall order.

Forging more effective and broader connections between university researchers and foundations is impeded by several additional factors: First is the general problem of inadequate incentives for policy-relevant scholarship within academe. Most universities emphasize basic research as their core mission, and for most purposes there are few, if any, other institutions in society that are organized and funded equivalently.

Second, foundations themselves often have robust networks of experts outside universities, raising important questions about the conditions under which scholars provide foundations with added value.

Third, universities have traditionally been structured along the lines of academic disciplines, but pressing contemporary challenges such as climate change and pandemics are increasingly complex and require expertise to be shared and solutions to be developed in an interdisciplinary fashion.

Fourth, universities still struggle to demonstrate institutional buy-in for sponsored research through cost-sharing, reduced overhead rates, and other mechanisms.

Given these challenges, we propose an alternative and more dynamic model wherein foundations and universities cooperate at much earlier stages in the research process, working together to identify emerging problems that are of significance to both. In a co-creative process, foundations are able to fund projects, and researchers are able to deliver their findings on the basis of a jointly identified problem. Foundations would serve as reservoirs of knowledge, not just sources of money, as both foundations and universities act to shape research agendas.

This co-creative approach harnesses the longstanding assets of universities — the large talent pool of highly trained researchers (faculty, postdoctoral researchers, and even students); the methodological sophistication of those researchers; and the independent legitimacy of university-based researchers, including the externally recognized value of their work — in new ways.

Such a model raises important questions: Will it press universities into the mold of a foundation model in which specific projects are supported because of their mission alignment? Does it place at risk the separation that many foundations and universities see as necessary to avoid conflicts of interest? While such questions demand thoughtful application of a co-creative model and mechanisms of review, the resulting new approach could be of significant value.

For established foundations, as well as for the new kids on the block, adopting this approach will more dynamically encourage academics to ask research questions that are of significant social value while allowing foundations to continue to benefit from the expertise and skill of university-based researchers. It will also generate possibilities for more diversity and inclusion in the funding process so that the fullest range of voices are heard as we face the crucial challenges of our time.

James Goldgeier is dean of the School of International Service at American University, Bruce Jentleson is a professor of political science in the Sanford School of Public Policy at Duke University, Jessica Trisko Darden is an assistant professor in the School of International Service at American University, and Steven Weber is a professor in the School of Information and the department of political science at the University of California at Berkeley.