University of Melbourne Vice Chancellor Glyn Davis is under mounting pressure to explain recent job cuts after leaked internal documents uncovered a $265 million donations plan to line university coffers.
The “University Campaign Plan”, launched last July, aims to tap private donors for millions of dollars in fresh funds, according to a report in next month’s edition of student newspaper Farrago.
The philanthropy push, currently in a pre-launch “quiet phase”, includes initial plans to raise up to $100 million with a target of $265.4 million by 2015. It already contains around $50 million and was expected to be publically launched next July.
The campaign will employ 50 full-time staff, including a well-paid “Chief Advancement Officer” to head it up. Leaked meeting minutes say that a glossy brochure, dubbed a “Book of Dreams”, will be used to spruik the initiative.
The Medicine, Dental and Health Sciences faculty will receive $86 million by 2012, while Arts, VCA and music and Economics and Commerce will receive around $25 million, according to the report. The Science faculty will receive $9.3 million. However estimates show the additional income is yet to be attached to the faculties’ bottom lines.
Davis blamed the recent axing of 220 staff cuts in the Economics and Commerce, Medicine, Engineering and the Victorian College of the Arts on the $191 million gouging of endowment revenue in the wake of the global financial crisis. He claimed the cuts would save the university around $30 million.
But the endowment fund, buoyed by the sale of Melbourne IT for $85 million a decade ago, is believed to contain around $800 million. Critics say cuts to teaching could be easily avoided by tapping the fund or the $50 million received under the new donations plan.
Ted Clark, head of the National Tertiary Education Union’s Melbourne University branch, said the fresh push for private funds was hypocritical.
“While we would endorse any effort by the University to raise money, it is dubious to blame the global financial crisis for the sacking of 220 staff, and then try to recoup more than the amount saved through donations.”
Mr Clark said it was foolish to proceed with the cuts because the hit to the university’s reputation could end up dissuading potential donors.
Davis has blamed a reduction in government funding for a shift towards private sources of revenue. The University has modelled itself on United States institutions which rely heavily on the largesse doled out by wealthy benefactors.
Some say Davis’ personal friendship with Prime Minister Kevin Rudd has also inhibited more militant appeals for public funding. Last December, Crikey revealed that Mr Rudd attended Mr Davis’ son’s birthday at the Prince Alfred hotel in Grattan Street, abutting the University.
A spokesperson for the University, Christina Buckridge, said that she wasn’t aware of the new fundraising plans.
“The way you do major fundraising is that you don’t tell anyone about it before you announce it”, she said.
Ms Buckridge said donations are linked to specific outcomes and are not factored in to ongoing operations. The University’s central budgeting process for next year was still proceeding, Buckridge said.
The University is on edge over the fallout from the cuts and the well-attended public protests over cuts to the VCA. This morning, following Crikey‘s queries, its media unit despatched an officer to confront Farrago staff over the source of the leak.
I don’t see the problem here. The University of Melbourne, like all responsible institutions, has to match expenditure to curret revenue. If additional revenue from philanthropy or elsewhere (the most likely is a sizeable share of the government’s ‘sustainable research excellence’ fund of $300 million annually) is gained in the future, then future expenditure may be increased accordingly.
Davis has been as critical as most other vice chancellors of the present and previous governments’ higher education funding and policy generally. But the vice chancellors’ club Universities Australia has been advised repeatedly by government relations experts that they don’t do their cause any good by constantly carping about inadequate funding.
I have been watching this unfold for two years now. Melbourne University appears to be adopting the University of Chicago model of funding where individual Chairs are subsidized, or is it “compromised”, by corporate donors, albeit in the guise of tax free foundations. Once a university becomes little more than a mouthpiece for Big Corporate (and probably not even Australian Big Corporate), we will see a new breed of academic shills emerge mouthing the corporate party line whenever directed in order to protect their funding. This is what I believe the US public is subjected to daily on US cable TV.
I am pretty sure I don’t want that to happen here and hope that others feel the same. It seems to me that this practice is slowly destroying the US as a stable democracy and is making the long suffering public more and more angry and resentful of the scant regard for their opinions paid by their so called representatives.
Back to Australia; first cab off the rank may well be education because education is already a major focus for Melbourne U. Watch the foundations (you didn’t even know existed) emerge from the woodwork and offer support for Chairs in this area with the goal of leveraging some business advantage not too far down the track.
Like Gavin Moodie I don’t see a problem here either. On a conservative estimate, $100 million in extra donations might give you maybe $5 million p.a. in revenue which you might only be able to use for specific development purposes it was raised for.
No university in the world would use this kind of (totally hypothetical at this stage) money to stop up shortfalls in recurrent expenditure in faculties that are spending more than they earn.
No university in the world would run down the endowment it already had and spend its capital to pay people’s salaries, thereby reducing its income into the future in perpetuity.
These criticisms are quite muddle-headed.
I would not like to say that Gavin Moore and MichaelT are wrong, but their thoughts do need some qualification. The business model adopted by Melbourne University views education as a “product for sale”. That is OK in principle, I suppose, but the delivery of that product depends almost entirely on the lecturers and other professionals working there. If the lost jobs were in this area and greater pressure was thereby put on the remaining staff, then the product is being devalued. If Melbourne Uni does not see this as a problem, it might as well go online and sell cheap degrees like so many odd institutions in the USA.
Jim
I think the issue is far simpler. The annual funding for each creative arts place is $10,317 from the Australian Government + $5,201 from the student in the form of their HECS payment = $15,518. The Victorian College of the Arts therefore has to teach its students for $15,518 per student per year. If that means cutting staff to get within budget, so be it. I don’t understand why the Victorian College of the Arts should be different in this from other University of Melbourne faculties and most other university conservatoriums and creative arts academies.