Part of this is the nature of the program: While some parts of Kenan-Flagler, such as executive training or graduate programs, generate a profit, undergraduate business does not. To grow a program that does not generate any revenue, the business school will have to search for funding elsewhere — specifically, from private donors.
Many elements mentioned in the desired expansion of the undergraduate business program, such as faculty salaries, are paid for with funds from the school's endowment. Millar said Kenan-Flagler has a smaller endowment in comparison to other highly ranked business schools across the nation.
According to Kenan-Flagler’s most recent annual report, endowment for the school had a market value of $163 million. For the same year, Duke University’s Fuqua School of Business reported an endowment upwards of $260 million. Kenan-Flagler also fell behind such public peers as the University of Florida’s Warrington College of Business, The University of Texas at Austin’s McCombs School of Business and the Wisconsin School of Business at the University of Wisconsin-Madison.
“If you compare our endowment to those of our public peers — it’s almost not fair to compare us to some of our private peers — we are way behind,” Millar said.
Doug Shackelford, dean of the business school, said that more private funding is needed to fully realize the goal of expanding undergraduate business at Kenan-Flagler.
“The fee can only be used for certain purposes … It can’t be used for additional faculty that we need, and it can’t be used for facilities,” Shackelford said.
But Shackelford said the fee does not cover all of the money the school is going to need.
The undergraduate business fee is just one initiative to raise the money, completely separate from private fundraising. Unsurprisingly, the former has had mixed reactions from students.
“It was frustrating to hear that I would be retroactively charged for pursuing my specific major,” said Lauren Toney, a sophomore business major in her first semester at the business school. “My hard work should be enough to give me these opportunities, I shouldn’t have to pay for them as well.”
Sophomore David Wong is more understanding of the financial situation of the business school and said he’s willing to pay the fee, as it will ultimately benefit himself and other students.
“It’s actually really important toward providing the funding we need,” said Wong, a sophomore business major who is also a member of the Dean’s Advancement Council.
On the council, Wong works to foster what he calls “a culture of student philanthropy,” and he understands the need for more funds for the business school — from the new fee and from donations, hopefully from alumni.
“We go here for four years, and it’s like, good to give back to the school,” Wong said. “Especially because we’re lagging behind our rivals.”
Jonathon King, president of UNC Management Company, which manages the University's endowment, pointed out that public schools like Kenan-Flagler may face more of a challenge when attempting to grow their endowment than private schools.
“Private universities have been raising money for endowments and other purposes for hundreds of years … and it’s built into the culture of their institutions,” said King, who has been working in endowment investing for over ten years. “And public universities are now realizing that they need to build that in.”
Despite the challenge, Shackelford has a vision that every qualified student will have the opportunity to study business if they would like to.
“(The recently implemented fee) doesn’t fix the problem, but it gives us a big step,” Shackelford said. “The school’s been a great school; it will remain a great school.”