THE CALL TO ACTION
Looking ahead, Duderstadt sets down seven key markers that he says must be addressed within the coming year—three of them immediately:
1. Cancer center designation. By September 2011, the University of Kansas Hospital’s application as a national cancer center research site is to be filed with the National Cancer Institute. Success there is paramount, but the $92 million needed to see it through will be a challenge. The update calls on area philanthropic efforts to unite behind the effort.
2. Leadership coordination. The update suggests that some of the players among the area’s civic, business, foundation, research and education organizations aren’t pulling toward the three goals of 2005.
3. Overcoming resistance at the top. The report said lack of cooperation was thwarting true partnerships.
4. Lab-level cooperation. Within the next year, the report said, more needs to be done to ensure that faculty members of life-sciences organizations—the universities, the Stowers Institute, medical centers and life-sciences businesses—are working in synch with one another.
5. Filling funding gaps. The report says area philanthropies must step in to help achieve what the legislative processes in Jefferson City and Topeka won’t when it comes to funding university-level programs. That’s a tall order, given the budget difficulties facing Missouri and Kansas.
6. More formal meetings are needed between KU, MU and K-State, because only they have the combined resources to push the education initiatives forward.
7. Broken out as a separate goal, but related to university-level funding bullet point, the report calls for more effective lobbying of state governments to provide funding needed to meet the goals of Time to Get It Right. This, perhaps, could be the biggest challenge of all in the coming years.
FINANCIAL IMPEDIMENTS
The dire state of fiscal affairs in both Kansas and Missouri may prove even more intractable a problem than Kansas City’s historic inability to cooperate across state lines. The initiatives originally set forth in “Time to Get It Right” are not inexpensive, and because they are so closely linked to higher education, they rely on state governments to provide financial backing.
In the short term, Kansas in particular will have trouble doing that. When the Legislature convenes next month, lawmakers will face a looming deficit of close to $500 million in the general fund budget. In the past year alone, the state has scaled back spending on higher education by a $106 million, rolling it back to 2006 levels.
Where is additional funding going to come from to further the life-sciences push in Kansas City?
“It’s tough,” says Kent Eckles, director of government affairs for the Kansas Chamber of Commerce. “We’re going to have to look at public-private partnerships and businesses” to further the regional goals.
He cites as an example of creative thinking the sales tax that Johnson County voters adopted to finance operations at the burgeoning KU/K-State research triangle. “That’s an effort of the locals saying, ‘We want to fund this ourselves, because we recognize the economic benefits from it.” Eckles said.
Financially, things are not much better on the Missouri side, where a potential billion-dollar budget hole may have to be filled.
“Clearly, we have huge budget problems, and two things make it challenging,” said state Sen. Charlie Shields, a member of the Higher Education Committee. “One is the length of time it will take to get out of this. Most people estimate it will be 2013 or 2014 before we get back to the same amount of revenue as FY2008. That means we’ll have seen a four- to five-year period of sustained revenue downturns in the state.”
The other, he said, was that federal stabilization money would probably run out after next year, making 2012 and 2013 just as challenging “unless we see some dramatic turnaround in the economy.”
That means Missouri also will face enormous challenges putting extra money on the table for life sciences and other higher-education initiatives, potentially for years to come.
“A lot of us are working very, very hard to try to protect higher ed,” Shields said. “But realistically, if you’re writing a budget, you can’t sit here in December and start checking off items that are untouchable, as great as they may be. You have to build the budget within the context of everything else that’s in there.”
WHAT ROLE FOR PHILANTHROPY?
On the foundation front, things aren’t much better. While the financial markets have been kinder to investment portfolios since the spring, the region’s five largest foundations were hammered last year. Health foundations, among the region’s largest, were particularly hard-hit: the Missouri Health Foundation saw $403.6 million sheared from its asset base; its Kansas counterpart was down nearly $137 million.
Total assets for the two largest foundations were absolutely rocked, as well: The Ewing Marion Kauffman Foundation saw its assets cut by more than a third, from $2.4 billion to $1.5 billion; the GKCCF’s fell more than 13 percent, to $917 million.
The ship has righted somewhat with the markets this year. But whatever the financial status of non-profits, McKnight points out, the funding vacuum created on the public side can’t be filled by the region’s foundations and grant-making organizations.
“Philanthropy needs to continue to rally around the key priorities,” of Time to Get It Right, she said. “But these institutions have to work on making a compelling case that there is, in fact, the collaboration necessary to get the work done and move the region forward.”
There simply is not enough money in the regional non-profit sector, she said, to make up the difference until state budgets are back on track, particularly with the other commitments already being addressed.
“Philanthropy in Kansas City is a total of $2.15 billion, which is important,” McKnight said. “But the value of the philanthropic dollar is its ability to lead and leverage, so it comes through a different lens. Nationwide, it’s about 2.2 percent of GDP. While that’s significant, it’s not enough to sway the future. Leadership remains important, but the actual numbers are the things the institutions involved have to address.”
THE LONG VIEW
Perhaps the most encouraging development toward reaching the goals of “Time to Get It Right,” Duderstadt notes, is the recent change in leadership at all three of the key universities that must be part of the solution: MU, KU and K-State, traditional rivals in more than just sporting programs.
He notes one other triad of universities that once collaborated to transform a region’s economy: Duke, North Carolina and N.C. State, whose combined efforts nearly half a century ago produced what today is the Research Triangle of Raleigh/Durham/Chapel Hill. The resulting economic boom of that cooperation by traditional Atlantic Coast Conference rivals still reverberates across North Carolina and the Southeast U.S. today.
“And you have someone in Bernadette Gray-Little, the new chancellor at KU, who comes out of that culture” as former provost at North Carolina, Duderstadt notes. “All three of the new presidents, he said, referring as well to Gary Forsee at MU and K-State’s Kirk Schulz, “understand what this means.”
Duderstadt offers some reassurances that, despite current obstacles to progress, the trajectory is a good one for the community.
“There is a sense of momentum, but the bottom-line message is, this is not a one-, two- or even five-year agenda; this will take at least a decade, probably longer, to achieve.
“The challenge is that it’s a very broad agenda,” he said, “and it’s hard for people to find just where they fit into it. What do we do now is always important, but people have to keep the long-term prize in sight, because that’s where we have to be headed.”