'Bucks for Brains' program gains momentum
CHARLESTON, W.Va.-- The "Bucks for Brains" program launched by then-Gov. Joe Manchin in 2008 got off to a slow start because of the Great Recession but still promises to meet its goals of strengthening the state's research universities and creating jobs, according to program insiders.
Manchin proposed Bucks for Brains in his 2008 State of the State address after learning about a similar program at the University of Kentucky.
"West Virginia must be a player in the 21st century world economy, and to do so we need to develop more intellectual and financial capital," Manchin said. The Bucks for Brains program would achieve both of those goals, he said, "by leveraging smart, interconnected investments in economic development, higher education and workforce training."
On Manchin's recommendation, the Legislature set aside $50 million in state surplus money to create a fund for the state's two research universities, West Virginia University and Marshall University.
The money would "stimulate world-class research and development and attract venture capital, which will eventually lead to jobs in emerging high-tech, high-wage industries," Manchin said. "The state's investment will be matched, dollar for dollar, by private donations, resulting in sizable funds that will strengthen our most promising research departments, ultimately leading to business spin-offs, new patents and job creation."
The Legislature allocated $35 million for WVU and $15 million for Marshall University. The schools could tap the state money if they could raise matching funds within five years.
If all of the state money is matched, the program will total $100 million, with $70 million for WVU and $30 million for Marshall.
The Great Recession began just as the program was launched. That hampered the ability of universities to attract private donors. Consequently, acting Gov. Earl Ray Tomblin asked the Legislature to extend the deadline for universities to come up with matching funds from 2013 to 2015. The Legislature passed the extension in March.
Dr. Paul Hill of the West Virginia Higher Education Policy Commission oversees the program. The extension was made "because fundraising over the past couple of years has not been easy to do," he said. "Also, finding donors with specific interests in specific areas is tedious.
"From my perspective, it (attracting donors) has picked up recently as the economy seems to have been getting better," Hill said.
Marshall has attracted $8 million in gifts so far. West Virginia University has attracted $18.9 million.
The universities are allowed to draw the state money as soon as they have a commitment from a private donor, even though the commitment may only be a pledge. The universities must receive all of the pledged money by July 1, 2015. If they don't, they have to give back the state match.
The biggest donation to Marshall came just last month when the Cline Family Foundation, established by coal operator Christopher Cline, pledged $5 million to support new faculty and scientists in what the university calls a "sports medicine translational research center."
The center will be built in a multipurpose indoor practice complex Marshall plans to build with money from other sources. The university is "still defining exactly what the new sports medicine translational research center will look like," Marshall spokeswoman Ginny Painter said in an email.
It may not sound much like something that will create business spin-offs, new patents and jobs. But Painter said that's exactly the intent.
"Interest from the private gift and state match endowments will fund scientists doing cutting-edge biotechnology and nanotechnology research with sports medicine applications," she said. "That is exactly what the trust fund is supposed to do — create an environment where more people are doing more research, which will eventually lead to patents, spin-out companies and overall economic growth."
Curt Peterson, who heads the program at WVU, said donations there have ranged from as little as $500 up to almost $5 million. The nearly $5 million gift is to establish a graduate scholarship program for students in the four areas the university is focusing on: energy and the environment; biology, biotechnology and biomedical; biometrics and forensics; and nanoscience and nanotechnology.
Under the Bucks for Brains rules, the universities can never spend the donations or the state's matching money. Rather, they establish endowments that invest the money and then spend the earnings.
Painter said, "It will be a little while before we start to see interest accruing from the endowment of the funds and have something to work with. It is not something that will happen overnight."
Hill agreed. "With a not terribly large endowment, it will take a while before there's spendable cash built up," he said. "Say someone endows a chair in chemistry. We would see the university follow through by hiring a person for that position when there are sufficient funds to pay that annual salary or a major portion of it. So they have to wait a time for that. The same with student fellowships.
Hill said that from his perspective, Bucks for Brains is working according to plan except it is taking longer.
"The entire effort is to encourage external giving, to put funds aside so that the universities can generate funds well into the future without ever spending the corpus," he said.
"Universities that are well endowed do not require as much from the state, perhaps in the future, to support them in specific areas of science and research. The general rationale is to build their capacity so they don't have to rely on state or federal grants because when a grant ends it's over and you may have to end a program. This is a way to provide a long-term funding stream.
"We're not there yet. We've not generated enough money yet to generate a lot of activity, though I've asked the universities to start telling us what they see in outcomes. I think it's a good strategy. Kentucky showed you could raise a lot of external funds by providing a state-level incentive to do so."
Painter pointed out that the Cline gift put Marshall over the halfway mark in fundraising. Peterson noted that WVU has reached 54 percent of its goal.
"I think the Great Recession, as we now call it, did have an impact on giving early on," Peterson said. "I think it's picking up. It looked good in the fiscal year that ended June 30 and it looks good going forward. Over the long term it's looking very positive for us. We're very excited about it because the funding is now beginning to generate some real dollars for research investment. We anticipate that will continue, so that's pretty exciting."
Contact writer George Hohmann at firstname.lastname@example.org or 304-348-4836.