Scientific and Engineering Research Facilities at Colleges and Universities: 1998

Chapter 5
Sources of Funds for S&E Research Facilities Projects


Highlights top

Introduction top

Research-performing institutions have spent several billion dollars on new science and engineering construction and repair/renovation projects in each biennial period surveyed. This chapter examines how research-performing higher education institutions financed S&E capital projects between 1990 and 1997.

Institutional respondents were asked to report sources of funds for S&E construction and repair/renovation projects costing over $100,000. Possible funding sources included the Federal Government, State or local governments, and such institutional sources as private donations, institutional funds, tax-exempt bonds, debt financing, and other sources. (See Item 5 of the survey in Appendix C [PDF].)

Considerable diversity in the source of Federal, State, and local funds for S&E construction and repair/renovation projects is possible. Federal funding, for instance, can include specific facilities support programs administered by the National Institutes of Health (NIH). Federal funding also might include nonpeer-reviewed projects that are specified individually through Congressional legislation rather than specific agency programs. Overlap between the funding categories is possible. For example, indirect costs included as institutional funds can come from Federal, State, and local governments, as well as from industry.

The dollar and relative contributions from the different sources of funds to construction and repair/renovation projects are presented in two ways in the tables. The first section of each table presents the three major sources of funds: Federal Government, State and local governments, and total internal sources. Total internal sources is the sum of all the financial resources an institution can commit to construction and repair/renovation projects—private donations, institutional funds, tax-exempt bonds, other debt financing, and other miscellaneous sources. The second section of each table presents these internal sources separately, with their dollar and relative contributions shown as a proportion of total internal sources.

Because of the support that State governments provide to public higher education, the control of the institution becomes relevant to discussions of the funding of capital projects involving S&E research facilities. Therefore, this chapter distinguishes between public and private institutions: 365 or 55 percent of the research-performing institutions are publicly controlled and 295 or 45 percent of the institutions are privately controlled.

This year, for the first time, institutions were asked to identify the indirect costs recovered from Federal grants and/or contracts that were included in "institutional funds,"if institutional funds were a source of funds for any S&E research facilities construction or repair/renovation projects costing over $100,000.

Findings top

Sources of Funds for the Construction of S&E Research Facilities top

Construction starts at research-performing colleges and universities totaled $3.1 billion in fiscal years 1996 and 1997. Construction funds came primarily from institutions’ internal sources. All told, institutions provided $1.9 billion or 60 percent of all funds used in new construction (table 5-1a). The majority of these funds (93 percent) came from three internal sources: private donations ($597 million), institutional funds ($593 million), and tax-exempt bonds ($553 million) (table 5-1b).

Table 5-1. Trends in the sources of funds for construction of science and engineering research facilities: 1990-97
Table 5-1 (Spreadsheet format)

The amount of funds committed to new construction projects in 1996 and 1997 ($3.1 billion) is substantially lower than the amount committed in 1990 and 1991 ($3.5 billion). Between 1990–91 and the current survey, the dollar and relative contributions changed as follows:

The dollar contributions in four of the five individual internal sources of funds changed as well:

Changes in the relative contribution from each internal source mirrored the changes in the dollar contributions described previously.

Between the last survey period (1994–95) and the current one, there were no substantial changes in the dollar or relative contributions from the Federal Government for new construction projects. However, funds from State and local governments declined by $279 million (from $1,246 million to $967 million), while their relative contribution declined from 43 to 31 percent of all construction funds. Funds from internal sources increased by $417 million (from $1,456 million to $1,873 million), while their relative contribution increased from 50 to 60 percent of all construction funds. This growth stemmed primarily from changes in three internal sources:

Sources of Funds for the Construction of S&E Research Facilities at Public Institutions top

Public, research-performing institutions committed a total of $2 billion from all sources to the construction of new S&E research facilities in 1996 and 1997. State and local governments were the largest source of these funds ($940 million or 47 percent of total funds). The second largest source of funds came from institutions’ internal sources ($847 million or 43 percent of total public construction funds) (table 5-2). The majority of these funds (92 percent) came from three sources: private donations ($267 million), tax-exempt bonds ($260 million), and institutional funds ($249 million) (table 5-2).

Table 5-2. Trends in the sources of funds for the construction of science and engineering research facilities at public institutions by institution type: 1990-97
Table 5-2 (Spreadsheet format)

Between 1990 and 1991 and the current survey period, the amount of funds public institutions committed to new construction projects declined by $411 million (from $2.4 billion to $2.0 billion in constant dollars). While the dollar contribution from State and local governments did not change substantially during this time period, the dollar contribution from the Federal Government declined by $260 million (from $461 million to $201 million). At the same time, the Federal Government’s relative contribution declined from 19 to 10 percent of all new construction funds. In addition, the relative contribution by State and local governments increased from 40 to 47 percent of all construction funds.

Although the total amount of funds committed to new construction projects at public institutions did not change between the last survey period (1994–95) and the current one, the contributions from all three sources did:

In the current survey period, the different types of public, research-performing institutions funded the construction of new S&E research facilities from the different sources as follows:


Sources of Funds for the Construction of S&E Research Facilities at Private Institutions top

Private, research-performing institutions committed a total of $1.1 billion to the construction of new S&E research facilities in 1996 and 1997. Unlike public colleges and universities, which relied most heavily on funds from State and local governments (table 5-2), private institutions derived most of their construction funds from internal sources ($1.0 billion or 91 percent of total private construction funds) (table 5-3a). The majority of these funds (94 percent) came from three sources: institutional funds ($344 million), private donations ($329 million), and tax-exempt bonds ($293 million) (table 5-3b). Funds from State and local governments accounted for only 2 percent ($26 million) of all S&E construction funds committed by private institutions.

Table 5-3. Trends in the sources of funds for the construction of science and engineering research facilities at private institutions by institution type: 1990-97
Table 5-3 (Spreadsheet format)

There were few substantial changes in the amount of funds in constant dollars that private, research-performing institutions committed to new S&E construction projects between the current survey period and all prior ones. However, the relative contribution from State and local governments and from internal sources changed between 1990 and 1991 and the current survey period as did the dollar contribution from State and local governments:

In the current survey period, the different types of private, research-performing institutions committed funds to the construction of new S&E research facilities as follows:


Sources of Funds for the Repair/Renovation of S&E Research Facilities top

Repair/renovation starts for projects costing over $100,000 at research-performing colleges and universities totaled $1.3 billion in fiscal years 1996 and 1997. The main source of repair/renovation funds came from the combined pool of internal sources. Institutions provided $866 million or 65 percent of all funds used in new repair/renovation projects (table 5-4a). The majority of these funds (83 percent) came from two internal sources: institutional funds ($579 million) and private donations ($141 million) (table 5-4b).

Table 5-4. Trends in the sources of funds for the repair/renovation of science and engineering research facilities: 1990-97
Table 5-4 (Spreadsheet format)

Between 1990–91 and the current survey period, the amount of funds that research-performing institutions committed to new repair/renovation projects increased by $344 million (from $981 million to $1,325 million). During this time period, the dollar and relative contributions from State and local governments did not change, while the contributions from the Federal Government and from internal sources changed as follows:

Changes also occurred between the first survey period and the current one in institutions’ contribution of funds to S&E facilities repair/renovation projects from two internal sources:

Between the last survey period (1994–95) and the current one, the amount of funds research-performing institutions committed to new repair/renovation projects increased by $209 million (from $1,116 million to $1,325 million). Funds from internal sources increased by $147 million (from $719 million to $866 million), while the Federal Government’s and State and local governments’ dollar contributions did not change substantially.

Three internal sources showed substantial changes in their dollar contributions between 1994–95 and the current survey period:

Despite these changes, other debt sources was the only internal source whose relative contribution changed substantially. Its relative contribution declined from 12 to 4 percent of all institutional repair/renovation funds.

In both time periods, internal sources accounted for almost two thirds of all repair/renovation funds, the contribution from State and local governments accounted for approximately a quarter of all funds, and the contribution from the Federal Government remained near 10 percent.

Sources of Funds for the Repair/Renovation of S&E Research Facilities at Public Institutions top

Public, research-performing institutions committed $670 million to S&E repair/renovation projects costing over $100,000 in 1996 and 1997. State and local governments were the largest source of these funds ($328 million or 49 percent). Internal sources ranked second ($269 million or 40 percent of total funds) (table 5-5a). Two thirds of these funds (67 percent) came from institutional funds ($180 million) (table 5-5b).

Table 5-5. Trends in the sources of funds for the repair/renovation of science and engineering research facilities at public institutions by institution type: 1990-97
Table 5-5 (Spreadsheet format)

Between 1990–91 and the current survey period, the amount of funds public institutions committed to new repair/renovation projects increased by $136 million (from $534 million to $670 million). Funds from the Federal Government and internal sources changed substantially between these time periods:

Similar changes occurred between the last survey period (1994–95) and the current one. The total amount of funds public institutions committed to new repair/renovation projects increased by $147 million (from $523 million to $670 million). Funds from the Federal Government and internal sources increased by $31 million and $55 million, respectively, but there were no changes in their relative contributions.

In the current survey period, different types of public, research-performing institutions funded S&E facilities repair/renovation projects as follows:


Sources of Funds for the Repair/Renovation of S&E Research Facilities at Private Institutions top

Private, research-performing institutions committed a total of $655 million to S&E repair/renovation projects costing over $100,000 in 1996 and 1997. Unlike public colleges and universities, which relied most heavily on funds from State and local governments, private institutions derived most of their repair/renovation funds from internal sources ($597 million or 91 percent of total repair/renovation funds) (table 5-6a). The majority of these funds (84 percent) came from two sources: institutional funds ($399 million) and private donations ($102 million) (table 5-6b). Funds from State and local governments account for only 1 percent ($10 million) of all S&E repair/renovation funds committed by private institutions.

Table 5-6. Trends in the sources of funds for the repair/renovation of science and engineering research facilities at private institutions by institution type: 1990-97
Table 5-6 (Spreadsheet format)

The amount of funds private, research-performing institutions committed to new S&E repair/renovation projects between 1990 and 1991 and the current survey period increased by $208 million (from $447 million to $655 million). In addition, changes occurred in the contributions from the different funding sources:

Between the last survey period (1994–95) and the current one, the mix of funds committed to S&E repair/renovation projects changed as follows:

In the current survey period, different types of private, research-performing institutions funded new S&E facilities repair/renovation projects as follows:


Amount of Indirect Costs Recovered from Federal Grants Committed to Construction and Repair/Renovation Projects top

The institutions in the sample were asked if they could identify the amount of indirect costs they recovered from Federal grants and/or contracts included in institutional funds for projects costing over $100,000. Of the 236 institutions that used institutional funds for construction and/or repair/renovation projects, 69 institutions reported they could identify the amount of Federal indirect costs they recovered. The following discussion is limited to these 69 institutions.

Overall, these institutions used more than twice as many Federal funds recovered from indirect costs to fund repair/renovation projects ($19 million) than they did to fund construction projects ($9 million). These sums represent 3.3 percent of institutional funds allocated to repair/renovation and 1.5 percent of institutional funds allocated to construction (table 5-7).

Table 5-7. Indirect costs recovered from Federal grants and/or contracts included in institutional funds for science and engineering construction and repair/renovation: 1996-97
Table 5-7 (Spreadsheet format)

Doctorate-granting institutions were the only institutions to use Federal funds recovered from indirect costs for construction. The top 100 institutions used $3 million, which accounted for 0.6 percent of the institutional funds they allocated to construction. Other doctorate-granting institutions used $6 million in Federal funds recovered from indirect costs for construction, which accounted for 14.0 percent of the institutional funds they allocated to construction.

All three types of institutions used Federal funds recovered from indirect costs for repair/renovation projects. The top 100 institutions used $9 million, which accounted for 2.0 percent of the institutional funds they allocated to repair/renovation projects, while the nondoctorate-granting institutions used $1 million, or 9.1 percent of their institutional funds allocated to repair/renovation projects. Other doctorate-granting institutions used $10 million in Federal funds recovered from indirect costs, which accounted for 8.5 percent of the institutional funds they allocated to repair/renovation projects costing over $100,000.

Summary of Major Sources of Funds top

Table 5-8 summarizes the major sources of funds for S&E construction and repair/renovation projects by institution type and sector. Both types of public, doctorate-granting institutions received the largest portion of their S&E construction and repair/renovation funds from State and local governments. Public, nondoctorate-granting institutions also received a large portion of their S&E repair/renovation funds from State and local governments, but the major source of their construction funds came from internal sources (55 percent). The single largest source of these funds (59 percent) came from tax-exempt bonds.

Table 5-8. Major sources of funds for construction and repair/renovation of science and engineering research facilities at public and private instutions: 1996-97
Table 5-8 (Spreadsheet format)

By contrast, all types of private institutions derived over 80 percent of both their S&E construction and S&E repair/renovation funds from internal sources. Overall, institutional funds were the largest single source of these funds for construction (34 percent of all internal sources) and for repair/renovation (67 percent of all internal sources). However, the largest internal source of funds varied by institution type:



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