While it may sometimes seem that "up" is the only direction for UW-Madison's state funding, the portion of the University of Wisconsin's budget that comes from the state has steadily declined since its founding. State funding as a portion of the university's budget was nearly 100 percent in 1848, 54 percent in 1925, 49 percent in 1961, and just 17.6 percent in 2011.
Even as the university has argued for increased state funding for UW's expanding role, the tendency of the Legislature has always been to fund a smaller percentage of campus undertakings. As state funding is cut as a percentage of the budget, the Wisconsin Alumni Association has advocated for increased freedoms, including the ability to raise funds from other sources such as federal grants and gifts, as well as flexibility in the use of those funds.
While private funding of university research is a common and encouraged practice today, in 1925, the University of Wisconsin Board of Regents instituted a new rule at a regular meeting in August 1925 that banned the UW from accepting some forms of non-state funding. (See image below right)
The funding that sparked the regents' decision came from the General Education Board, a national education fund endowed by oil mogul John D. Rockefeller. The Board of Regents believed such funding came with unacceptable strings attached, and therefore, constituted a threat to academic freedom. The decision to reject such funding posed an important question regarding the future of the University of Wisconsin: Would the UW continue the annual fight for increased state funding from reluctant legislatures, or would the university begin seeking an increasing portion of its funds from alternative sources despite the risks to academic freedom?
In response to the regents' decision to outlaw certain types of grants, the Wisconsin Alumni Association formed a committee to investigate the risks and rewards of such funding. Three reports were published in the Wisconsin Alumni Magazine. A minority report from Richard Runke '1900 argued that even the possibility of attracting outside money would influence policy and research decisions. From that report:
" ... if we expect to go back to these foundations, as it is admitted we will do, for more money year after year, then it is that the "hoped for dollar" will necessarily influence our course."
A second minority report from Spencer Beebe '1893 suggested the university was at a crossroads. Down one path lay a future of decreased state contributions and increased control from the outside institutions that would make up the difference. The alternative, he suggested, was to return to the days of 100 percent state funding. From that report:
"I must say that I am very warm to the idea that our state CAN support and SHOULD support its own University without aid from these outside sources."
The primary report of the WAA Committee to Investigate Funding concluded that the University of Wisconsin Board of Regents was wrong to reject alternative sources of funding. According to the committee, "Withal the liberality of the legislature, our university program has lagged behind its needs." They listed university endeavors, such as dormitories and Memorial Union, which had been accomplished without state funds. The committee concluded future programs, such as the medical school and research, would not receive sufficient funding from the state to reach their full potential. From that report:
"We do not understand why taxpayers should insist that they themselves bear the whole of these burdens and reject the supplemental aid which private benefaction is willing to supply nor why the regents should insist that the taxpayers do so."
The report did recognize the risks non-state funding provided. While stressing the importance of state funding, it was ultimately resolved that alternative sources of funding should be accepted, and even sought after, because the nature of Wisconsin would prevent any influence on academic freedom. From that report:
"And let us here say that any man who shall set out with the sinister intention of restraining academic freedom in the University of Wisconsin will have much to reckon with ... He must reckon with the president of the faculty, over them the board of regents, over them the legislature, over them the people of the state, not to speak of the great student body."
The regents' decision to reject alternative sources of funding did not last; non-state funding now makes up the vast majority of UW-Madison's budget. This transition has allowed UW-Madison to accomplish its three core missions of instruction, research and service, all on an international scale at a decreasing cost to the taxpayer. Shifting away from state funding, however, has created serious risks and concerns for the university. The Wisconsin Alumni Association has worked with the UW through the years to find solutions to issues created by non-state funding.
Making Non-State Funding Work
The primary threats posed by non-state funding were increased tuition, influences on research and a lack of private gifts to fill needs unmet by the Legislature. WAA followed through on its belief, first expressed in 1925, that these difficulties could be overcome by working with the UW to come up with creative solutions.
One such solution was the Wisconsin Alumni Research Foundation (WARF). Founded in 1925, the organization helps UW researchers patent their findings, reinvesting royalties into further university research. Since its original work with UW biochemistry professor Harry Steinbock's patent, which enabled foods to be enriched with vitamin D, WARF has contributed $1.07 billion for programs, initiatives and research at the UW. (Read a history of WARF first published in the June 1948 edition of Wisconsin alumnus magazine.)
By funding research with research, WARF has allowed UW-Madison to supplement its state funds without compromising the academic independence of researchers. Harry Russell, one of WARF's founders, summed up how WARF enables research without influencing how that research is conducted: "WARF's job is to earn the money and give it to the university; the professors' job is to spend the money as wisely as they know how."
In 1945, WAA was involved in the creation of the Gifts and Bequests Council, later called the University of Wisconsin Foundation. The original UW Foundation included six members elected by WAA, in addition to WAA's secretary and president. Throughout the years, WAA and the UW Foundation have worked together to raise and administer private gifts for the university. The UW Foundation provides a crucial barrier between the university and outside sources of funding, helping to ensure donated funds do not hinder the university's academic freedom.
Tuition increases are one result of reduced state funding. To make up the difference, the UW Board of Regents has gradually increased tuition since 1848, when the university was free to students. WAA's work to raise funds through gifts, grants, increased state appropriations and by supporting WARF has indirectly helped to offset tuition increases.
Today, student tuition makes up about 15 percent of the university's budget, trailing behind federal funding (33%), gifts, grants and segregated funds (18%), and state funds (17.6%). WAA has served as a key advocate for students, rallying alumni support to keep UW-Madison accessible to all Wisconsinites. Raising funds for scholarships, supporting the Madison Initiative for Undergraduates and offering financial services for students are just a few of the ways WAA works to offset increasing tuition.
As state funding has been reduced, WAA has partnered with WARF and the UW Foundation to ensure alternative sources of funding are adequate and do not harm the UW's long tradition of fearless academic sifting and winnowing. WAA will remain an independent advocate for all sources of funding and a vigilant university partner in ensuring the UW remains an accessible and academically independent public university for future generations.