<p>Berkeley Raises $1.1 Billion to Keep Professors From Ivy League </p>
<p>By Brian K. Sullivan and Matthew Keenan</p>
<p>March 14 (Bloomberg) – The University of California, Berkeley, the highest-ranked state college in the U.S., has raised $1.1 billion toward a war chest to fight raids on its faculty by wealthier Harvard and Yale. </p>
<p>The money will endow chairs for 100 professors. Berkeley’s teachers now often earn less than counterparts at Harvard University, may soon be underpaid by 30 percent, and are vulnerable to higher offers, Chancellor Robert Birgeneau said. The school will also overhaul management of its $2.9 billion endowment to match the 23 percent return at Harvard’s $34.9 billion fund, Birgeneau said. </p>
<p>``These institutions are competing for exactly the same faculty that we are trying to hire and so an important question is whether the public universities are going to be able to compete,‘’ Birgeneau, 65, said in an interview.
Berkeley has been hit by increased competition for students as Harvard and other elite schools step up financial aid, becoming cheaper than Berkeley for some families. Berkeley has lost at least 30 faculty members since 2003 to its eight primary competitors, led by Harvard. The California school also faces a 10 percent cut in state subsidies under the budget proposed by Governor Arnold Schwarzenegger.
Berkeley, which counts 44 Nobel Prize winners among its alumni and past and present faculty, is the highest-ranking public-supported university in U.S. News & World Report magazine's 2008 list, and places 21st overall.
The school argues it deserves support because, unlike elite private universities, Berkeley has a mission of educating a broad cross-section of students, Birgeneau said. Thirty-one percent of Berkeley's undergraduates, most of whom are from California, are eligible for federal Pell grants for students whose family income is less than $45,000.
Harvard's Sticker Price
There are about 7,500 Pell-eligible students at Berkeley, more ``than are present on the campuses of all the Ivy League universities put together,'' Birgeneau said. Twelve percent of Harvard's students qualified for Pell grants, as did 9.4 percent of Yale University's in 2006, according to the Journal of Blacks in Higher Education.
Berkeley's fees, housing, books and other expenses bring the typical cost for California residents to $25,300. The sticker price for Harvard is $45,620.
Competition for low- and middle-income students is intensifying, as Harvard, Yale and other schools have sweetened financial-aid plans. Harvard is waiving all costs for students from households earning less than $60,000 annually. Grants from Berkeley lower its costs to $8,000 for families making less than $40,000, Birgeneau said.
Harvard is also instituting a sliding scale, with contributions from households earning up to $180,000 capped at 10 percent of income. Families earning $90,000 pay the full price at Berkeley, Birgeneau said.
Professor Pay
The average salary for a full professor at Berkeley in fiscal 2006 was $134,672, or 15 percent less than the average earned by counterparts at private institutions, according to the university. Associate professors made $88,576, or 14 percent less than peers.
Econometrician Guido Imbens left Berkeley for Harvard in 2006; chemical engineering professor Arup Chakraborty went to the Massachusetts Institute of Technology in 2005; and law professor Robert Post joined Yale in 2003.
Chakraborty, 46, worked at Berkeley for more than 16 years. When he was considering leaving for MIT, Berkeley offered to establish an endowed chair for him, narrowing the financial differences between the schools.
It is true that over the long term, private schools do offer endowed chairs that are more sustainable,'' Chakraborty said.In general, for Berkeley, it is a bit of a problem.''
State Deficit
The state of California is projecting an $8 billion budget deficit by June 30, 2009. Schwarzenegger has proposed a 10 percent spending cut, while Democrats in the Legislature want to raise taxes to meet part of the shortfall. The state gave Berkeley $508.5 million in fiscal 2007, excluding research contracts. Harvard's endowment, meanwhile, soared $5.7 billion, and provided $1 billion toward the annual budget.
The William and Flora Hewlett Foundation, in Menlo Park, California, made a $113 million challenge grant to Berkeley in September, the largest gift in the university's 140-year history.
The Hewlett grant earmarked $3 million so Berkeley could study how to manage its endowment to match returns at elite schools. Berkeley's assets are split, with $2.1 billion handled by the board of regents and $840 million by the University of California, Berkeley Foundation.
Berkeley plans to form an investment company to manage the foundation's share, said Scott Biddy, 43, a vice chancellor.
Endowing Chairs
The school plans to raise $107 million from other donors and pair it with the Hewlett gift to create the 100 endowed chairs. There are 1,350 tenured and tenure-track faculty, and 351 endowed chairs backed by $458 million in assets.
Craigslist Inc., the San Francisco-based provider of online advertisements, has pledged $1.6 million to establish Berkeley's first endowed chair for new media. So far, the drive has attracted 15 additional grants.
``Our base doesn't rival that of Harvard or Princeton, but it is enough for us to improve significantly our financial position,'' Birgeneau said. </p>
<p>Berkeley gathered commitments for the $1.1 billion in advance of announcing a multi-billion dollar fund drive that begins next September, Birgenau said. The university hasn’t set a goal or schedule for the drive. Berkeley’s last campaign, ended in 2000, amassed $1.4 billion. </p>
<p>Good news! I wonder though how the 1.1 billion is divided between faculty, grad students, and UG.</p>