Even though the University of North Carolina has always been a public university, state financial support has varied greatly over time. At the beginning the state provided no direct support. Instead, it authorized the university to charge tuition and to collect on the state's unpaid debts and escheats, the estates of people who died without legal heirs. The legislature did make a loan of $10,000 toward construction of the first building, Old East, which they eventually agreed to turn into a gift. There was no direct appropriation until 1881, and not until the 1920s did the university began to receive regular appropriations to operate the institution.
What has been consistent throughout its history is that tuition and public funds have not been sufficient to meet the need. Therefore, the university has always relied on benefactors —those people or entities that make gifts of one form or another. The practice began with eight Orange County landowners who donated some 700 acres to serve as the site for the campus and town of Chapel Hill. At the same time, donations by Benjamin Smith and Charles Gerrard of land claims received in payment for their service in the Revolutionary War eventually funded the construction of Smith Hall (now historic Playmakers Theatre) and Gerrard Hall.
The first significant cash gift was from Thomas Person, who gave Carolina 1,050 silver dollars in 1796 to complete construction of the building that now bears his name. While throughout the nineteenth century the university president and trustees traveled throughout the state to solicit donations, campus leaders did not start a formal fund-raising program until the mid-twentieth century.
Some benefactors gave in an involuntary way. The Smith lands, for example, were not university property until the United States expropriated the area from the Chickasaws through treaties in the early 1800s. Gifts that enriched the university from antebellum donors originated largely from the profits of enslaved labor, while funds from the sale of enslaved people in escheats also provided significant income before the Civil War. Others intentionally provided for the university in their wills, some of which made a significant difference in the ability of university leaders to strengthen academic programs. Two noteworthy bequests were from Mary Ruffin Smith, who bequeathed a family plantation in Chatham County to the university to support scholarships for indigent students, and Mary Lily Kenan Flagler Bingham, whose will established the Kenan Professorships.
In the early twentieth century Carolina began to build a modern research university. Leaders sought support from northern philanthropists, including Andrew Carnegie, George Peabody, and the Rockefeller family. In North Carolina a generation of industrialists made significant investments in the university, including the Hill family of Durham, the Hanes family of Winston-Salem, the Kenans, and the Moreheads. As the university expanded its medical school and health care programs in the 1950s and 1960s, families like the Linebergers and the Loves contributed to the facilities. Their gifts augmented the major investments that the people of North Carolina made through state appropriations. Some names are virtually unknown because they do not appear on the landscape. Joseph Ezekiel Pogue, an alumnus who made his fortune in petroleum exploration, left his $11 million estate to Carolina as an unrestricted endowment. It has been used in many ways over the years, including for library acquisitions, scholarships, and research.