With Endowment Plan Dead, CUNY Searches for Funds

The disintegration of a plan to establish a public university endowment in the state is forcing the City University of New York to look elsewhere for the money it needs to replenish its faculty.

State lawmakers have cast aside the idea of an endowment, which was first proposed in January by the former governor, Eliot Spitzer, and has since become a relic of an ousted administration and a more optimistic economic outlook.

Turned away by Albany, CUNY officials are seeking succor from private foundations, including the Bill & Melinda Gates Foundation, to carry forward with its long-term plan of greatly expanding its full-time faculty.

Sources say CUNY officials are resigned to the collapse of the endowment idea, which would have created a $4 billion fund shared by the city system and the State University of New York, and are now moving aggressively on their own to raise cash from the private arena.

The university is reaching out as the Gates Foundation reassesses its higher education philanthropy, which has been geared toward its Early College High School Initiative, a network of schools that allow students to pursue high school diplomas and college credits simultaneously. Last year, the foundation gave the University of Washington $105 million to start a health research center.

Talks between CUNY and the Gates Foundation have not progressed beyond informal stages, sources said.

During the last eight years, a period in which CUNY has enjoyed something of a renaissance, the university has been rewarded with increases in private giving.

In 2004, its chancellor, Matthew Goldstein, announced the largest fund-raising campaign in the university's history, setting a goal of netting $1.2 billion by 2012. CUNY has already matched that figure, aided by eight-figure gifts from the likes of William and Anita Newman, William Macaulay, and Andrew Grove.

Support for an endowment has taken a backseat to more urgent budget concerns. Lawmakers say their top priority on the higher education front is to soften the blow of Governor Paterson's order that the State University of New York trim more than $100 million from its operating budget. CUNY, which has a budget of more than $2 billion, has seen its funding drop by more than $80 million below its expectations.

"It's going to be difficult to come up with a source of funding to endow the fund," a spokesman for the Senate Republicans, John McArdle, said. "The endowment fund is not our priority."

Mr. Spitzer's push for an endowment grew upon a report issued last year by a commission on higher education, which the former governor appointed with the goal of transforming SUNY into a respected public university on par with the best state systems in Michigan and California.

The centerpiece of the commission's recommendations was a call for New York to beef up CUNY and SUNY's faculty with 2,000 additional full-time professors, including 250 senior academics.

The commission, led by a former president of Cornell University, Hunter Rawlings, has been inactive since it published its preliminary report in December. It's supposed to release a final report next week.

CUNY, which is locked in a contract battle with its unionized professors, has 6,800 full-time faculty members at its four-year senior and two-year community colleges. Mr. Goldstein has established a goal of having a 70-30 ratio of full- to part-time faculty members, which will require the hiring of hundreds of more professors.

To pay for the new faculty members at both SUNY and CUNY, Mr. Spitzer proposed creating a $4 billion endowment whose funds would be generated by leasing the state lottery to a private investor, who would give the state a lump sum of cash in exchange for sharing the revenue and assuming control over marketing and promotion.

Lawmakers were immediately cool to the idea, expressing concerns about the harm of encouraging more residents to gamble and the potential risks to the $2 billion a year that the lottery already supplies to lower education funding.

In the budget passed in April, lawmakers created what was essentially an unfunded endowment fund under the auspices of the state comptroller. After rejecting the idea of privatizing the state lottery, the Legislature has yet to propose an alternative funding stream.