James H. Wharton: Fundraising obstacles at LSU

Recently there has been extensive criticism of private fundraising at LSU based only on the university’s endowment.
In 1981 the University’s endowment was $3.0 million and the foundation had two employees. The LSU Alumni Federation had three employees, no active chapters and was supported by public funds.
There was no Tiger Athletic Foundation or Tradition Fund. Last year, LSU raised more than $150 million, which is more than most of the universities to which LSU was compared in a recent local publication.
In the early ‘80s and after much study of consultant’s reports, it was decided to form three independent private nonprofit corporations.
Rules established by the State Ethics Commission, the attorney general and the courts made it clear that these corporations had to be independent of LSU, had to pay all employees with private funds, and among other things could not receive gifts (public money or property) from the university.
All three had to bootstrap their way into independent corporations which they have done and today are enjoying considerable success.
Over 100 LSU alums have devoted 30 years of their time and wealth to the creation of these corporations.
Today the LSU Alumni Association services over 135 active alumni chapters and provides a host of other services that form lifetime associations with students and alumni across the nation.
The Tiger Athletic Foundation (TAF) raises funds for athletic facilities and will in the future raise more funds for academic facilities. The LSU Foundation has the main mission of raising private funds for academics (facilities, chairs, professorships, etc.) and has had the greatest difficulty overcoming a late start plus finding private funds to support a full-scale development staff.
The Tradition Fund raises private funds that become restricted public funds to support the LSU athletic department budget as well as making modest contributions to the university.
the LSU campus was built in the mid-1920s and has limited space. Many facilities are in poor condition. Due to cracks in the concrete, Tiger Stadium was condemned in 1981. TAF not only saved the stadium but has also greatly enhanced it.
The LSU Foundation provided $40 million for a new building to house the Business College, $55 million for renovation of Patrick F. Taylor Hall, $8 million for the Lab School and many more projects.
Currently a new building for the Department of Mathematics and other extensive renovations are absolutely essential and more important than an endowment.
Further recent comparisons to other universities need to be put in context. Michigan and Michigan State have long been constitutional corporations, completely independent of their governor and legislature. Their Boards are elected and hold complete control over each university’s financial operations. In 1923 a Wisconsin professor obtained a patent for the process of putting Vitamin D in food, especially milk which eliminated childhood rickets. A small group of Wisconsin alumni created a private foundation named the Wisconsin Alumni Research Foundation (WARF).
That patent plus the patent for Warfin or Coumadin (rat poison or blood thinner) has brought more than a billion dollars to Wisconsin. The president of Indiana University is head of the Indiana foundation and the university provides funding to the Foundation. That would not be possible in Louisiana because LSU is part of the executive branch of state government, and as such the university is subject to all the laws, code of ethics and executive orders of the state. However, one advantage that Louisiana Universities have is the TOPS program which produces annual funding for scholarships equal to the revenues from a $5.5 billion endowment. This allows the institutions to concentrate private fund raising more on facilities, faculty and fellowships.
The LSU Foundation, LSU Alumni Association and the Tiger Athletic Foundation have in the past been independent private nonprofit corporations dedicated to support of LSU but unfortunately, it appears that could be changing.
James H. Wharton is professor and chancellor emeritus at Louisiana State University.