Compared to most other public universities, Temple University's tuition is very high. And it accounts for a relatively large percentage of the institution's operating funds. State appropriations, by contrast, are relatively modest compared to other states, following Pennsylvania's longstanding policy of generously funding financial aid that significantly benefits students in private institutions and constraining appropriations to public institutions. In fiscal year 2001, State appropriations accounted for approximately $179 million of Temple's budget and tuition was $255 million.

With tuition among the highest of the nation's public research universities, additional revenue from tuition will rely more heavily on enrollment growth than on tuition rate increases. And large additional appropriations from the Commonwealth are not likely as the economy softens. The University cannot, therefore, anticipate significant new revenues for operations. Whatever academic and other institutional initiatives are undertaken must rely principally on reallocations and on expanding grant and contract funding. A modest amount of additional funding, targeted to specific programs, may occur through private fund raising, as discussed below.

As Temple attempts to strengthen its academic programs, a substantial revision of the budget process should be undertaken. I have recommended that the University move to a budget for academic units that is heavily, but not completely, driven by enrollment. Since our principal mission is to serve students, it is appropriate that resources should follow them. By examining the expenditures per student credit hour, adjusted for undergraduate and graduate teaching, at other Carnegie public research universities, Temple can develop benchmarks for allocating funds to schools and colleges for faculty and for non-personnel expenses. It should be our objective to restrain administrative expenses, except for investments in academic facilities. At the same time, the budget should leave some room for differential investment to stimulate new programs, support those that have achieved excellence, and stimulate research and public service initiatives. To achieve these purposes, a small pool of discretionary funds for academic initiatives should be included in each annual budget.

Both planning and budgetary prudence are encouraged when those who manage budgets have some capacity to engage in multi-year planning. To achieve this, budget units that have unspent funds at the end of each fiscal year should be able to carry over a substantial portion of those funds for use in subsequent years.

To develop confidence in the University's budget process and to fit the budget to institutional goals, the budget process and the budget itself should be transparent and predictable. There should be clear guidelines for allocating funds and expending them. Each academic and administrative unit should have clear budget goals, and the rationale for increases or decreases in their budgets should be articulated. The reconstruction of the University budget to achieve these goals will begin in the development of the fiscal year 2002 budget, but it will take several budget cycles to complete.

Beyond its operating budget, Temple should seek to expand its resources from other sources. The imperative to expand grant and contract funding has been discussed fully in a previous section of this report. Some further attention should be given to Temple's prospects for greater private support.

Temple has a large body of 218,000 living alumni, for which Temple has addresses for approximately 175,000. The University's alumni appear to be grateful for the opportunity to attend Temple and for the quality of the education they received at the University. They are proud of Temple and speak of it with enthusiasm. Most do not have a strong emotional tie to the University, however. They did not live on the campus; their lives, even during their student years, were centered elsewhere. Because so many Temple students attended part-time or over an extended period, alumni do not identify themselves as part of an academic class. And over the years, Temple's programs to reach alumni have been intermittent.

One consequence is that Temple's alumni provide only modest financial support for the University. About 19,000 alumni made a contribution to Temple in 1999-2000, or about 11 percent of those for whom the University has a current address. The percentage of those giving varies widely among schools and colleges; Law and Medicine gain the largest proportion of alumni participation, which follows a pattern at other universities. Nonetheless, Temple's unusual mission and the commitment that so many alumni feel to the University suggest that there are opportunities to attract significantly greater support from alumni for Temple's programs.

Temple should make a substantial effort over the next five years to strengthen its program of major gifts from individuals, corporations, and foundations. But it should be recognized that—except at a small number of elite institutions with historically significant endowments, a large body of wealthy alumni, and well established fund-raising programs—very little private giving supports the general operating budget. Donors are generally thoughtful and purposeful about what they want to support, and they expect their gifts to be used accordingly. These national trends in private giving have made fund-raising by academic colleges and departments more significant in recent years. Most donors want to support specific academic programs and want to do so in targeted ways.

Temple has a relatively modest endowment totaling $147 million. In this respect, Temple is weaker than most other urban universities. But developing endowments is difficult in all such institutions. Urban universities have long served students from modest means and students who commute. After graduation many students feel little emotional connection to their university; and, as they accumulate assets, they husband them for the next generation because there is little or no pre-existing asset base on which the family can build. Nonetheless, some alumni are capable of and willing to make significant commitments to Temple. Other individuals who recognize Temple's signal role in Philadelphia and in the nation may also be willing to make important commitments. There must be a stronger effort to involve them with the University and to assist them to select worthy programs for support that are consistent with their interests.

During the University's Commonwealth Challenge Plus Campaign, in the late 1990s, Temple's total fund raising for all purposes rose under Peter Liacouras' leadership to $44 million annually. That compared favorably to the nation's other leading urban universities. In the subsequent years, fund raising declined somewhat. The University's able vice president for development left Temple, and the development program lost some momentum. Temple is now searching for a new vice president for development. And the current budget makes substantial commitments to fund the development program at a level that will allow significant expansion.

In the years ahead, Temple should seek to expand its alumni participation and its major gift programs. Most additional funds will be targeted by donors for specific academic programs and purposes, and those programs can be significantly strengthened. Endowment gifts may also support the University's operating budget by supporting professorships, scholarships, and targeted programs in research and instruction. Beyond these endowment gifts it is unlikely that in the near-term Temple's general operating budget will be significantly expanded through private giving. Temple's operating budget will continue, therefore, to depend heavily on tuition and State appropriations and on an expansion of grant funding. A longer-term goal will be to build continuing private support for the University's general educational programs.