This report discusses the trend of private funding to state universities, examines the importance of this area of financial support, and analyses the financial challenge confronting the nation's state and land-grant universities. Examples of what private investment does for the school are provided as is an argument supporting the need for continued private support of public universities. It is noted that, although state tax appropriations for higher education in fiscal 1989 represented a 5.8 percent increase over the previous fiscal year, the contributions of the states to the maintenance of the major public network of higher education are not keeping pace with the needs of the times. The gap between expenditures and revenue sources and the increasing role of voluntary support is examined, and specific observations are made concerning private sources including corporations, foundations, alumni and individuals, and community and civic groups. Finally, examples from 11 universities are provided of the growth and potential of private support. (GLR)