Last week I was in full finger-wagging mode at American colleges and universities, but fair's fair: on at least one very big issue they deserve kudos.
I've remarked before that .edu-land today seems to have a perception problem: working-class American families aren't aware of the fact that the cost of going to college is now priced in an extremely (and historically-unprecedented) progressive way. In other words the better off you are the more you pay, and the well-off families paying full sticker price are subsidizing everyone else. But that reality is obscured behind a fog of complex forms and jargon, so lots of families who aren't well off and who see the newspaper headlines quoting $30,000/year sticker prices never even try.
Another sign that the institutions are grasping this comes from the excellent online journal Inside Higher Ed. They report that "several elite private universities and flagship public universities have effectively eliminated loans for students from low-income backgrounds", and that the schools are making this change public.
Other top-level private colleges have in recent years made the "pricing based on ability to pay" reality much more apparent and simpler: Harvard for example eliminated any expectation of family contribution for households earning less than $60,000/year and others are following suit.
This whole trend gets a big happy salute from me for several civic reasons that are probably obvious. It also seems wise from a strictly business point of view provided of course that a given college has a healthy-enough financial base to be not overly reliant on earned income to pay the bills.
Showing posts with label university. Show all posts
Showing posts with label university. Show all posts
Wednesday, March 28, 2007
Wednesday, February 14, 2007
Non-profit dirty laundry airing in courtrooms
Updates today on two previously-mentioned pieces of non-profit sector ugliness, plus a new one. (Much of this comes courtesy of The Charity Governance Blog which despite its annoying logrolling for the proprietor and his book, is worthwhile for the relevant news provided with legally-experienced comments.)
In Wisconsin the sad case of the prosecution of the former chief financial officer of a major museum is slogging its way through the courts with still no sign of anybody else being held accountable for what was clearly a mess with multiple authors. Charity Governance sees the defendant as clearly a fall guy: "We hope he decides to force the DA's hand and fight to preserve his reputation. Although the press and others have noted that there is plenty of shared blame in the financial collapse of the Milwaukee Public Museum, to this point, others who had oversight authority over the museum simply haven’t been held accountable in any meaningful way."
Over in the Ivy League, Princeton University appears to have become at least dimly aware that whether or not they win the Robertson donor-intent lawsuit in court they have been getting their butts kicked in the media. I dunno that letters to the editor are really going to change that fact any, even if having read a couple of the pieces that the letters respond to I'd agree that the university isn't being treated entirely fairly by editorial writers. The case itself is inching along with no end in sight. Still looks from here like the university is guilty of being at least cavalier with the donor's funds over the years, and ought to settle the thing before its good name gets tarnished further.
Now this month comes the Salvation Army trying to use what is obviously a technicality to ace Greenpeace out of $33 million left in a will. The sordid details with some comments can be found here, and here, and here. Yecchh -- I'm guessing that Salvation Army staffers, volunteers and donors are not feeling all warm and fuzzy about the organization at the moment.
In Wisconsin the sad case of the prosecution of the former chief financial officer of a major museum is slogging its way through the courts with still no sign of anybody else being held accountable for what was clearly a mess with multiple authors. Charity Governance sees the defendant as clearly a fall guy: "We hope he decides to force the DA's hand and fight to preserve his reputation. Although the press and others have noted that there is plenty of shared blame in the financial collapse of the Milwaukee Public Museum, to this point, others who had oversight authority over the museum simply haven’t been held accountable in any meaningful way."
Over in the Ivy League, Princeton University appears to have become at least dimly aware that whether or not they win the Robertson donor-intent lawsuit in court they have been getting their butts kicked in the media. I dunno that letters to the editor are really going to change that fact any, even if having read a couple of the pieces that the letters respond to I'd agree that the university isn't being treated entirely fairly by editorial writers. The case itself is inching along with no end in sight. Still looks from here like the university is guilty of being at least cavalier with the donor's funds over the years, and ought to settle the thing before its good name gets tarnished further.
Now this month comes the Salvation Army trying to use what is obviously a technicality to ace Greenpeace out of $33 million left in a will. The sordid details with some comments can be found here, and here, and here. Yecchh -- I'm guessing that Salvation Army staffers, volunteers and donors are not feeling all warm and fuzzy about the organization at the moment.
Thursday, January 25, 2007
University endowments are kicking the market's butt
News coverage of an annual report on U.S. university endowments (released this week) has tended to focus on either the gaudy totals, or the related news that Princeton has decided to freeze its tuition for a year. (It turns out that while a few other endowments are larger in total, Princeton has the most endowment dollars per student.)
The Economist wants to know how American universities are managing to invest better than even hot-shot hedge-fund managers? That's not a new or unusual outcome, apparently, and the schools aren't paying successful investment managers the same level of wild salaries and bonuses that for-profit firms do. (Though a few universities do pay their investment chiefs a lot more than their professors or even presidents, which has caused some public controversies that have in turn chased away some managers.)
The Economist thinks that the big university endowments represent "capitol [that] is extremely patient....unlike pension funds, they do not have to fret about matching assets with liabilities. This means endowments can tolerate lots of volatility, which in turn allows them to make, and stick to, contrarian bets....Perhaps they can stay solvent longer than the market can stay irrational." Hence "America's endowments were among the first to look beyond the staid mix of domestic equities, bonds and cash. The idea they helped develop in the 1970s and 1980s—deemed eccentric at the time—was to break the portfolio into a mix of standard and “alternative” assets, as uncorrelated with each other as possible so as to spread risk. This strategy is sometimes referred to as “portable alpha”. Their early moves into hedge funds, venture capital, private equity, property, distressed debt and the like brought outsized profits...."
University investment managers may also have identified a couple of interesting competitive advantages: " “Whereas pension trustees are naturally risk-averse, universities are all about innovating, financially as well as intellectually,” says James Walsh, who runs Cornell's $5 billion endowment. Investment constraints are kept to a minimum. Alumni with Wall Street experience are encouraged not only to donate money but also to sit on investment committees. Many are happy to oblige. “This gives us access to minds we couldn't otherwise afford,” says Mr Walsh." "
One thing I'd like to see some data on, which would help inform the current debate about mission-related investing of foundation endowments, is how university endowment returns have been correlating with divestment decisions. The NACUBO report doesn't address that, unfortunately.
The Economist wants to know how American universities are managing to invest better than even hot-shot hedge-fund managers? That's not a new or unusual outcome, apparently, and the schools aren't paying successful investment managers the same level of wild salaries and bonuses that for-profit firms do. (Though a few universities do pay their investment chiefs a lot more than their professors or even presidents, which has caused some public controversies that have in turn chased away some managers.)
The Economist thinks that the big university endowments represent "capitol [that] is extremely patient....unlike pension funds, they do not have to fret about matching assets with liabilities. This means endowments can tolerate lots of volatility, which in turn allows them to make, and stick to, contrarian bets....Perhaps they can stay solvent longer than the market can stay irrational." Hence "America's endowments were among the first to look beyond the staid mix of domestic equities, bonds and cash. The idea they helped develop in the 1970s and 1980s—deemed eccentric at the time—was to break the portfolio into a mix of standard and “alternative” assets, as uncorrelated with each other as possible so as to spread risk. This strategy is sometimes referred to as “portable alpha”. Their early moves into hedge funds, venture capital, private equity, property, distressed debt and the like brought outsized profits...."
University investment managers may also have identified a couple of interesting competitive advantages: " “Whereas pension trustees are naturally risk-averse, universities are all about innovating, financially as well as intellectually,” says James Walsh, who runs Cornell's $5 billion endowment. Investment constraints are kept to a minimum. Alumni with Wall Street experience are encouraged not only to donate money but also to sit on investment committees. Many are happy to oblige. “This gives us access to minds we couldn't otherwise afford,” says Mr Walsh." "
One thing I'd like to see some data on, which would help inform the current debate about mission-related investing of foundation endowments, is how university endowment returns have been correlating with divestment decisions. The NACUBO report doesn't address that, unfortunately.
Monday, January 22, 2007
Women in higher education (including science)
The presidency of Harvard is something like a symbolic top of the heap in American higher education, and so the uproar that drove Lawrence Summers out of the job last year made national headlines. The authors of a new book on women in science recently made some interesting comments about that episode in the online magazine "Inside Higher Ed".
Stephen J. Ceci and Wendy M. Williams, professors at Cornell, report that "some scholars felt that they could not contribute (essays to the book) because their views were scorned, and had resulted in personal attacks against them on their campuses. If you read between the lines in several of the essays, you will detect this theme even among those who did contribute essays...." In other words, the professors re-discovered what Summers arguably should have known: that even wondering something like whether the gender imbalance in higher education might not be due to discrimination is a third rail on today's campuses. In a word, yecch.
Much more positive was the news (to me anyway) that women have in just the last decade or two become drastically more prominent at the top levels in higher education. Three Ivy League universities now have female presidents (Brown, Penn and Princeton) as do plenty of other well-known schools (hundreds of four-year colleges and universities in the U.S., according to one study). Actually Harvard's world-famous law school is now led by a woman (who is, according to the New York Times, on the short list for the university's top job). One might see progress, of a sort, in things like the female president of the University of New Hampshire being headhunted away by Temple, or the female president of the University of Colorado getting hounded from her job partly for being tonedeaf in much the same way Summers was (on a different topic). No glass ceiling here, for good and ill. (Including the ultimately tragic story of the chancellor of the University of California.)
I also did not know that women are now earning more than half of all bachelor's degrees, 43% of all master's degrees and more than a third of all doctorates in science and engineering in the U.S. If those trend lines continue up (the doctorate fraction has almost quintupled since 1966) then obviously that will filter up through academia (it's already led to sharp increases in the percentage of women employed in various scientific and engineering fields, in some cases to more than half.)
Stephen J. Ceci and Wendy M. Williams, professors at Cornell, report that "some scholars felt that they could not contribute (essays to the book) because their views were scorned, and had resulted in personal attacks against them on their campuses. If you read between the lines in several of the essays, you will detect this theme even among those who did contribute essays...." In other words, the professors re-discovered what Summers arguably should have known: that even wondering something like whether the gender imbalance in higher education might not be due to discrimination is a third rail on today's campuses. In a word, yecch.
Much more positive was the news (to me anyway) that women have in just the last decade or two become drastically more prominent at the top levels in higher education. Three Ivy League universities now have female presidents (Brown, Penn and Princeton) as do plenty of other well-known schools (hundreds of four-year colleges and universities in the U.S., according to one study). Actually Harvard's world-famous law school is now led by a woman (who is, according to the New York Times, on the short list for the university's top job). One might see progress, of a sort, in things like the female president of the University of New Hampshire being headhunted away by Temple, or the female president of the University of Colorado getting hounded from her job partly for being tonedeaf in much the same way Summers was (on a different topic). No glass ceiling here, for good and ill. (Including the ultimately tragic story of the chancellor of the University of California.)
I also did not know that women are now earning more than half of all bachelor's degrees, 43% of all master's degrees and more than a third of all doctorates in science and engineering in the U.S. If those trend lines continue up (the doctorate fraction has almost quintupled since 1966) then obviously that will filter up through academia (it's already led to sharp increases in the percentage of women employed in various scientific and engineering fields, in some cases to more than half.)
Wednesday, December 06, 2006
Donor intent showdown finally underway
Oral arguments have begun in the potentially-landmark case Robertson vs. Princeton in New Jersey state court, more than four years after the suit was first filed. The heirs of a huge 1961 gift to the university have been publicly arguing for several years now that Princeton has serially violated the donor's intent; that gift has now grown into $650 million. In addition to the separation of those funds from the university's endowment, the plaintiffs are seeking restitution for endowment proceeds which they say were spent contrary to the donor's restriction and which could total hundreds of millions more.
Of all the web-accessible news coverage describing the facts of the case, that Pittsburg Post-Gazette article linked above seems the best. The Robertson plaintiffs have established a robust website for their case which of course includes only the op-ed pieces that favor their version of the situation.
Princeton's public defense, at least, was seriously damaged early this year when the Wall Street Journal went through thousands of pages of documents released as part of the court's discovery process. The reporters found memos and emails in which Princeton officials wrote frankly of hiding fund disbursements from the Robertsons, and also found evidence of two smaller gifts which appear to have been used for purposes other than those specified by the donors. The university argues that the memos were wrong and that the officials who wrote them didn't have authority over the matter. The Journal's front-page story is not web-accessible unless you're a subscriber; if you are, it ran on February 7th and was headlined "Poisoned Ivy".
The case could have a huge legal impact on philanthropy but also might not, because Princeton's legal strategy seems to open the door to a ruling that's based on any number of things. Their approach appears to be "leave no argument unturned": they dispute the plaintiffs' standing to sue, and deny that they misused the funds, and say that anyway even if they did the original bequest was implausible (then why did they accept the gift?), and argue that in any case the public interest is better served by their version of it than the family's, and they belatedly filed a countersuit claiming that actually the Robertson endowment somehow owes Princeton $235 million, and they dispute the plaintiffs' right to a jury trial on technical grounds, and in February they announced a new fellowship named for the original Robertson donors while denying that its creation had anything to do with the Robertson endowment fallout.
Uh huh....Well I'm no lawyer and I'm not at all sure that the Robertson heirs are entirely right ethically or legally, but at a minimum Princeton has been quite careless over the years and their behavior now leaves a sour odor. Whichever way the case turns out (years from now, after several well-funded appeals) its ultimate impact should be to make both donors and non-profits take the terms of restricted gifts more seriously. Follow Yale's 1995 example with the $20 million Lee Bass gift: if the donor's restrictions are too onerous and discussion doesn't yield a workable compromise, then you gotta give back the money!
Of all the web-accessible news coverage describing the facts of the case, that Pittsburg Post-Gazette article linked above seems the best. The Robertson plaintiffs have established a robust website for their case which of course includes only the op-ed pieces that favor their version of the situation.
Princeton's public defense, at least, was seriously damaged early this year when the Wall Street Journal went through thousands of pages of documents released as part of the court's discovery process. The reporters found memos and emails in which Princeton officials wrote frankly of hiding fund disbursements from the Robertsons, and also found evidence of two smaller gifts which appear to have been used for purposes other than those specified by the donors. The university argues that the memos were wrong and that the officials who wrote them didn't have authority over the matter. The Journal's front-page story is not web-accessible unless you're a subscriber; if you are, it ran on February 7th and was headlined "Poisoned Ivy".
The case could have a huge legal impact on philanthropy but also might not, because Princeton's legal strategy seems to open the door to a ruling that's based on any number of things. Their approach appears to be "leave no argument unturned": they dispute the plaintiffs' standing to sue, and deny that they misused the funds, and say that anyway even if they did the original bequest was implausible (then why did they accept the gift?), and argue that in any case the public interest is better served by their version of it than the family's, and they belatedly filed a countersuit claiming that actually the Robertson endowment somehow owes Princeton $235 million, and they dispute the plaintiffs' right to a jury trial on technical grounds, and in February they announced a new fellowship named for the original Robertson donors while denying that its creation had anything to do with the Robertson endowment fallout.
Uh huh....Well I'm no lawyer and I'm not at all sure that the Robertson heirs are entirely right ethically or legally, but at a minimum Princeton has been quite careless over the years and their behavior now leaves a sour odor. Whichever way the case turns out (years from now, after several well-funded appeals) its ultimate impact should be to make both donors and non-profits take the terms of restricted gifts more seriously. Follow Yale's 1995 example with the $20 million Lee Bass gift: if the donor's restrictions are too onerous and discussion doesn't yield a workable compromise, then you gotta give back the money!
Sunday, November 12, 2006
How NOT to deal with a $20 million donor
The wire-service story seems clear enough:
MIAMI, Nov. 10 (UPI) -- A medical entrepreneur has withdrawn a promised $20 million donation to the planned Florida International University medical school.
Herbert Wertheim, a former optometrist [and a university board member for nearly 20 years] , said that Florida International University President Modesto Maidique hurt his feelings by saying he was getting the medical school named after him "on the cheap," the South Florida Sun-Sentinel reported. Wertheim has also resigned from the board and has asked that the name of the school be changed.
The dispute, which appears to have ended a long friendship between Wertheim and Maidique, began with a disagreement about structuring the gift. After promising a lump sum, Wertheim said he needed to change that to 26 months of installments for tax reasons and was told that a lump sum was needed to get a matching grant from the state. "Most offensive to me was your comment that I was given the naming rights of the medical school 'on the cheap,' and that you could now get $100 million for it," Wertheim wrote Maidique. "After we finished speaking, I felt hurt, empty and disappointed."
[Yea, that's not really the feeling one hopes to leave behind from a call with a longtime major donor to one's organization is it?. Methinks the rest of the university's board might soon be making President Maidique feel "hurt , empty and disappointed".]
MIAMI, Nov. 10 (UPI) -- A medical entrepreneur has withdrawn a promised $20 million donation to the planned Florida International University medical school.
Herbert Wertheim, a former optometrist [and a university board member for nearly 20 years] , said that Florida International University President Modesto Maidique hurt his feelings by saying he was getting the medical school named after him "on the cheap," the South Florida Sun-Sentinel reported. Wertheim has also resigned from the board and has asked that the name of the school be changed.
The dispute, which appears to have ended a long friendship between Wertheim and Maidique, began with a disagreement about structuring the gift. After promising a lump sum, Wertheim said he needed to change that to 26 months of installments for tax reasons and was told that a lump sum was needed to get a matching grant from the state. "Most offensive to me was your comment that I was given the naming rights of the medical school 'on the cheap,' and that you could now get $100 million for it," Wertheim wrote Maidique. "After we finished speaking, I felt hurt, empty and disappointed."
[Yea, that's not really the feeling one hopes to leave behind from a call with a longtime major donor to one's organization is it?. Methinks the rest of the university's board might soon be making President Maidique feel "hurt , empty and disappointed".]
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