RAPID CITY—Today at its regular business meeting on the campus of South Dakota School of Mines and Technology, the Board of Regents received a report on the efforts of the six public universities to raise funds from non-state sources. The Regents also approved fundraising targets for the next fiscal year.

Regents President Harvey C. Jewett, IV, of Aberdeen, noted that the requirement that the universities seek additional funding from other sources is good for South Dakota. "Whenever the universities can generate funds from external sources, they are improving the opportunities available to South Dakota students. Non-state revenues can be used to pay for scholarships, fix buildings and buy equipment, and support faculty through grants. We appreciate every dollar the universities can raise from private or federal sources," said Jewett.

In December 1997 the Regents adopted a new framework for the distribution of revenues to the state universities. The framework assures each university a base budget. It also requires that each university meet certain performance targets established by the Regents. One of the areas in which the universities have targets is in fundraising through gifts, grants and contracts, and capital fund drives.

The Regents received performance data for fiscal year 1999, which ended on June 30. During that time, the universities increased scholarship money by 26%, from $6.4 million to $8.07 million. Scholarship funds provide direct aid to students to assist them in paying for college costs. The universities also increased their grants and contracts from $17.9 million to $20.9 million. Grants and contracts provide resources for faculty and students to conduct research and carry out public service. The universities also increased the fundraising for their endowments by 76.7%. Revenues from endowments enable higher education institutions to provide services or make purchases that they would not otherwise be able to do. "The universities and their foundations have done a great job," said Jewett.

Regents Executive Director Robert T. Tad Perry said, "Under the new funding framework the Regents will set new targets each year for fundraising. We establish new targets in endowments, grants and contracts, and scholarships, using the previous fiscal year as the baseline. New targets for capital funds will be set each year, taking into consideration individual campus needs and capital fund campaigns underway. "

The new targets for all six universities in three of the pools are provided below:

• endowments: 15% over FY99 performance
• grants and contracts: 10% over FY99 performance
• scholarships: 12.5% over FY99 performance

Under the framework each university contributes to an incentive fund. If it performs to meet its goal, it wins back its contribution. If it fails to meet its target, it receives only a portion of its contribution. The amount of money that a university forfeits is redistributed to the others in proportion to the percentage by which they exceeded their targets. If any balance remains, the Regents give that to the universities for specific expenditures. In FY00 the Regents have designated those funds to be used for technology purchases.

Perry added, "The point to be made is that performance incentive funding is accomplishing what the Regents set out to do, that is, to change the behavior of the universities. They are focusing their efforts where the Regents want them to focus. In the long run this will make a stronger system."