Boosting UH endowment key to financial stability


POSTED: Friday, January 15, 2010

Classics professor Robert Littman was right on the mark when he said that the University of Hawaii must increase revenue and decrease the wrong kind of expense, partly by cutting the size of the UH administration (”;UH can balance budget without gutting faculty,”; Star-Bulletin, Island Commentary, Jan. 10).

He could have added that the administration budget has grown from about 5 percent when he came here to about 15 percent now.

Professor Littman is only partly right when he says that UH has only three revenue sources: state funds, federal funds, and tuition.

He left out two important sources of university finance: the UH endowment raised through private gifts; and the needed change in attitude and effort by the UH leadership to raise that money.

That's odd for a professor of Greek, which includes Aristotle, who was extra good at classifying knowledge 2,500 years ago and was a forerunner of the clever lads who created Google.

Littman cites the high tuition at the University of Michigan, but he fails to mention a significant fact about that institution: Michigan, a state university similar in structure to UH, has a solely controlled endowment of more than $2 billion. Depending on the market value of their endowments, nine to 11 other state universities have endowments of more than $1 billion, including the state universities of California, Texas, Minnesota, Washington and Virginia (which a few years back threatened to secede from the state system because of shabby treatment by the state government).

It is more than coincidence that the highest ranking universities show a very high correlation between the size of their endowments and their rank.

That means that salaries can be higher, libraries and research facilities can be bigger and better, scholarships for students can be more plentiful and diverse, innovative scholarship can get seed funds to start the long road to a Nobel prize, and architecture can impressively and soundly give visual expression to the respect for intellect.

The second major source of funds not mentioned by Professor Littman is the attitude and action driving vigorous and skilled efforts by the presidents and others to raise private money.

UH has had some success with such fundraising, as, for example, the $25 million given by Jay Shidler for the business college, the $1 million given by Hiram Fong Sr. to the colleges of arts and sciences, and even the total of $90,000 given individually by the UH Faculty Retirees Association board of nine people. Imagine if the thousands of faculty retirees had donated to the UH endowment over the 50 years since statehood.

If the misguided faculty union that endorsed Lingle had set out to raise endowment funds for faculty development, like Jack Hall of the ILWU joining Ben Dillingham for Aloha United Way 40-some years ago, UH would be much closer to the $1 billion that would belie the “;pore li'l us”; attitude so often invoked by our crab-in-a-basket leadership.

Now UH still has about 65 percent of the way to go, depending on the market. If the job description for each regent were to raise $1 million a year from private sources, the regents would be diverted out of their congenital pathology of micromanagement and misjudgment of personnel.

Finally, Professor Littman should have said that a good university has a business side, but its main institutional model is not business but service — service to intellect, the singular characteristic of human beings.


George Simson, a Manoa resident, is emeritus professor of English at UH-Manoa.