University President Mark Yudof is tired of falling behind the rest of the pack.
He presented two options to the Board of Regents on Friday to earn the University $1 billion in private donations and help raise the University from its position behind 19 of the top 30 research universities in the country in faculty and staff member pay rates.
University officials are only able to give faculty and staff members a 3 percent pay raise over the next two years with the funding allocated to them by the Legislature. The amount is down from the 5 percent for which Yudof asked.
The University goes to the state for core funding of faculty and staff compensation, but officials are increasingly finding that is not enough, said Richard Pfutzenreuter, the University’s chief financial officer.
“It just seems to be beating our head against a brick wall to get more (than 3 percent),” he said.
As a result, the University is stepping away from its past strategy of looking to the Legislature for increased funding and is moving into other areas.
Yudof’s first recommendation is part of the University’s 1999-2000 budget, which he presented to the regents Thursday. The regents will vote on the budget June 28.
If approved, University officials will begin asking separate colleges to add to the University’s 3 percent pay raise for faculty and staff members this year.
“Part of the compensation plan is to encourage (separate colleges) to allocate additional funds,” said Robert Bruininks, University vice president and provost.
The different colleges are funded by state money through the University, but they also garner funds through tuition, specific grants, endowments and private financial gifts. For each tuition dollar the University takes in, 75 cents goes to the college in which the course is instructed and 25 cents goes to the college where the student is registered. If a student takes a course that is in the same college in which they are enrolled, that college gains the entire dollar.
“When tuition goes up, the yield goes to the colleges,” Pfutzenreuter said.
The other option, which Yudof presented to the Board of Regents on Friday, is to begin asking outside private sources for gifts, grants and endowments to the University to aid in faculty and staff compensation.
Yudof said increasing faculty salaries is the only way for the University to hire and keep professors who are outstanding rather than just average.
Pfutzenreuter said the University has an extensive fund-raising network and officials will access it to focus fund raising toward this goal; but he said it is an uphill battle.
“Donors like to fund specific things,” he said. Often, a goal as vague as faculty pay increases is not well accepted by the public.
“People understand when we say we need money to research Alzheimer’s,” Yudof said Friday. “People don’t always understand when we say, ‘Aren’t you ashamed we’re $2,000 behind Wisconsin or $5,000 behind Michigan?'”
The University stands at ninth in faculty and staff compensation among public research universities and 20th among research universities overall. But, when comparing the pay rates for full professors, the University is 25th, though that ranking is up from 28th two years ago.
Yudof estimated that faculty salaries would need to increase 15 percent, plus the cost of inflation, to compete with the top five universities, which are the University of California-Berkeley, Stanford University, Cornell University, the University of Michigan and Harvard University.
Yudof said one risk in looking to private donors to compensate for the gap in state funding is a loss of funding from the Legislature, but “I guess my advice is the risk worth taking,” he said.