The University of California, San Francisco (UCSF), today released a series of proposals aimed at fixing finances at the biomedical powerhouse. Although UCSF receives more grants from the US National Institutes of Health than any other public institution, it is still struggling to stay above water. Under historic growth rates in revenues and expenses, UCSF would be in the red by 2015. In January, UCSF Chancellor Susan Desmond-Hellmann created a working group to explore new governance structures and financial relationships with the greater UC system.
Among the group’s proposals are establishing a UCSF-specific board, a venture development fund and bond-funded investments. It also recommended a new way of determining the funds UCSF pays into the UC Office of the President (UCOP).
However, Desmond-Hellmann brought up only the most moderate part of these recommendations at a meeting before the UC regents today. She proposed establishing a volunteer UCSF advisory board to act as strategic partner, provide access to extraordinary expertise and focus management on the most important issues to the university.
In four to six months, Desmond-Hellmann plans to return to the regents with plans for a board charter and membership. She emphasized repeatedly that UCSF did not want to break away from the UC system and that she could recruit better board members if regents were likely to support a board’s recommendations.
The regents responded enthusiastically, praising research the working group had done and saying that other UC campuses could follow this example. “It’s a small step, it is a good step, and a reasonable step, and could serve as a pilot for other campuses,” said regent Bonnie Reiss. UC president Mark Yudof said Desmond-Hellmann had done “a superb job”. Still, the move is controversial. Left unsaid at the meeting were concerns that UCSF was moving to more independence and that other campuses might follow. (See Biomedical campus seeks freer rein.)
Although not discussed at the regents’ meeting, the working group report also outlined more radical moves, such as ceding some decision-making authority to the board and introducing “entrepreneurial” financing options. One would be the creation of “a long-term quasi-endowment fund to support tech transfer”. This fund, along with private funds, would be invested in UC spin-off companies and intellectual property. Returns from these investments would then be reinvested into the fund.
Another financing option involves US$50 million of proceeds from Century Bonds, which were sold this February to bring funds into the UC system. These would be combined with $50 million raised from donors to create a $100 million investment in the UCSF Foundation, with earnings that could be funneled into financial aid.
Finally, the working group wants to change how UCSF contributes to the UC budget. At present, each of the ten UC campuses contributes to UCOP based on its overall budget. UCOP manages undergraduate admissions, retirement and health-care benefits, and provides centralized banking and accounting services. According to the working group report, UCSF consumes less than 10% of service but pays for 18%. In addition, UCOP has compensated for budget cuts by approving increases in tuition. Since tuition makes up less than 1% of UCSF’s budget, this strategy would not work for UCSF. The working group proposed smaller cuts to UCSF during shortfalls as well as smaller increases if state funding recovers.
Desmond-Hellmann appears to have been strategic about obtaining buy-in from the regents. Five of the 13 members of the regent-approved working group designing the proposals are regents or executives at the UCOP. Several UCSF and UCOP officers sat lined up beside her as she addressed the regents.
Meanwhile the UC regents continue to face criticism for proposals to meet budget shortfalls with tuition increases. Before the meeting, a group of students dressed as zombies held a protest, saying that debt and fees were killing public education.
