Universities engage in knowledge transfer, policy development, and various economic initiatives, and many of these activities are publicly funded. However, the global financial crisis that started in 2008 and contributed to the global economic recession of 2008-2013 reduced state government support for public universities in the United States and lower endowment returns for private (nonprofit) universities, causing higher education institutions to tighten their budgets. How did the financial crisis and its ensuing budget impacts affect universities’ output in terms of research and commercialization? To answer this question, this paper analyzes changes in funding and output over two decades at three research universities operating in the same region, but attracting different kinds of students and different levels of research funding. We find that universities’ output was negatively affected despite the federal government’s attempts to fill the gap left by reductions in state funding with the American Recovery and Reinvestment Act stimulus program. This paper reviews the results of these developments and examines the reasons for them.