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November Board of Regents meeting highlights

The November Board of Regents meeting took place Nov. 12 and 13 at McNamara Alumni Center.

By Adam Overland

Regents Seal

November 18, 2009

The November Board of Regents meeting took place Nov. 12 and 13 at McNamara Alumni Center. Steven Goldstein, president of the University of Minnesota Foundation, and Becky Malkerson, president of the Minnesota Medical Foundation, presented to the regents the Annual Report of Private Giving.
Financial Year 2009 was the second best year of giving for the U, behind only 2008. In FY 2009, 83,000 people made gifts and pledges to the University, a drop of just 5 percent from 2008, when 88,000 people gave, said Malkerson. The total amount raised in 2009 was $267 million, compared with $289 million raised in the previous year.

"The past two years have been unique both in terms of the size of the gifts and the state of the economy," said Malkerson. "This is a very positive outcome."

Goldstein noted that some donors direct that gifts should be used immediately, while others indicate that their gifts may go toward an endowment fund. "It's important to understand that this is, unfortunately, not all immediate cash available to use, but…it creates a pipeline of giving that benefits the University over time," said Goldstein. Fully 98 percent of gifts were designated by donors for a specific use, with $72 million going toward ongoing academic program support and $35 million toward student scholarships and fellowships.

Gifts supporting faculty totaled $20 million in FY 2009. These gifts are often made in the form of endowed chairs and professorships, said Goldstein. Also, 8 new endowed faculty positions were created in the last year, bringing the U’s total to 431.

About 4 percent of giving was unrestricted, typical of any given year. "It's small, but it's important and it's flexible, and it makes it possible to respond to more immediate needs," Goldstein said. Private donations made up 6 percent of the University’s budget in FY 2009.

Six-year capital improvement plan
Vice Presidents Kathleen O’Brien and Richard Pfutzenreuter, Senior Vice President Robert Jones, and President Robert Bruininks presented to the board the six-year capital improvement plan.

The University continues to plan guided by the assumption that state support will continue to decline. The six-year plan presentation comes on the heels of news that Minnesota tax collections fell again in October, coming in 2.7 percent below projections. The state took in $29 million less than anticipated last month. Revenues are nearly $81 million below projections since the fiscal year began in July.

Facilities and resource management
O'Brien said that a significant part of planning involves improving facilities conditions, decommissioning buildings that are obsolete, and prioritizing projects. "We have to optimize and decrease the space we have, because that drives our operating costs," said O'Brien.

Part of the plan will involve using Higher Education Asset Preservation and Replacement (HEAPR) funds to renew the campus utility infrastructure and individually targeted chilled-water projects. O'Brien noted that when the St. Paul campus moved from individual chillers to a centralized chiller, the U saved about $2 million in operating costs.

Senior Vice President Jones added that the plan will include the creation of facilities, like the Science, Teaching, and Student Services building currently under construction, that directly link to educating and graduating students, improving learning outcomes, and enhancing student satisfaction.

Online learning
Asked by the board whether online learning could contribute significantly to reducing capital costs, President Bruininks responded, "We have done a study of which courses can be given online without reducing quality. We think we can do more to improve online learning, but we don't want to leave the impression that online learning is a lot cheaper--perhaps a 10 to 20 percent 'efficiency premium,'" he said. "There isn't any great panacea."

Bruininks added that the most expensive spaces the University maintains and operates are research facilities, and online learning initiatives do not generally impact those facilities.
He acknowledged that capital planning is likely to become an increasingly challenging responsibility of the University, and said that part of the job of the recently formed Advancing Excellence Steering Committee will be to determine better ways to use space and plan and schedule instruction.

Bruininks predicts more data-driven decision-making and disciplined and proactive management strategies where incentives will likely play a big part in the system. "We are looking very hard not just to attach management rules and regulations, but also to build up a culture that values incentives and the prudent use of resources," said Bruininks. "The old way of thinking about capital projects is 'my turn' rather than 'our need,’ and I think we need to turn to a more strategic view of how we organize our priorities," he said.

Other items

Vice Provost for Undergraduate Education Robert McMaster presented a report on University transfer students and what the school is doing to engage them. The report showed that more than 2,700 students transferred to the U in 2009, a majority from Minnesota state and community colleges. Transfer enrollment increased by more than 800 students from 2008 to 2009. President Bruininks suggested that the trend is likely to accelerate and that the University, in turn, should be doing much more with evening and weekend programs. He called for a "highly cost effective and highly accessible blended strategy."

The board reviewed a nonaction change to the U's conflict of interest programs and held a discussion of the draft policy, which is available for comment on the University Policy Office Web site.

Next month the board will hear a report on the state of University research, from Vice President for Research Tim Mulcahy.