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Budget Cuts, Courtesy of Donor X

April 3, 2009

An anonymous donor’s gift to the University of North Carolina at Chapel Hill could be something of a Trojan horse, according to some faculty.

The donor is paying for a private consulting firm to suggest budget cutting strategies for the university, roiling some faculty who say they’re unsure whether the donor’s agenda is driving the sensitive process. Bain & Company, a 36-year-old firm with a global client base, has been retained to help Carolina trim as much as 7 percent of its $1.9 billion operating budget to deal with revenue declines and endowment losses. As a stipulation of the gift, the donor has asked to remain anonymous and has insisted the university use Bain for the project, the cost of which the university will not disclose.

Chancellor Holden Thorp said he anticipated criticism, but ultimately decided it was in the university’s best interest to take the gift.

“We realized when we did it that it was going to be difficult to have the donor remain anonymous and that people were going to have concerns about that, and we decided after weighing all the options to go ahead and accept it with that stipulation,” Thorp said Thursday. “We’re not surprised people are concerned.”

Much of the public criticism has come from faculty affiliated with the American Association of University Professors, which submitted a letter to the chancellor in February saying the lack of transparency was troublesome.

“It’s going to have all these negative impacts, so it should not be a secretive process,” said Altha Cravey, an associate professor of geography and vice president of the campus chapter of the AAUP. “If it’s going to be as painful as they’re telling us it’s going to be, it’s a slap in the face to add this secrecy on top of that.”

It is not uncommon for donors to remain anonymous, and many states do not require that university foundations disclose donor’s names. Faculty who are concerned about the hiring of Bain & Company, however, say the university should place a greater emphasis on transparency when layoffs, program cuts and benefits changes are potentially under consideration. Faculty also say they’ve been unable to independently verify whether the donor has financial, familial or other interest in Bain.

Responding to the letter from the AAUP’s state conference, Thorp attempted to assure faculty that the donor’s involvement in Bain’s hiring presents no conflicts of interest.

“The anonymous donor funding the study doesn’t work for Bain, but has used the firm before and thinks very highly of their work,” Thorp wrote.

Thorp reiterated to Inside Higher Ed Thursday that the donor has no financial stake in the Bain or any familial connection to the company, adding that he wouldn’t have accepted the gift if there were any such conflicts. Thorp added that he felt no pressure to accept Bain's suggestions to please the donor.

Joseph Templeton, Faculty Council chair at Carolina, agrees that it would be a mistake to refuse free expertise from Bain simply because the funding source is unknown. Templeton, who has met with Bain’s team, had a favorable impression.

“I think the anonymous donor truly believes that he or she is making an important and substantial contribution to the university in what now happens to be tough times. I don’t see an evil side to this,” said Templeton, a professor of chemistry. “And I think imagining that there’s some underhanded reason – that this is a way to bring about a change that the donor wants that would be inappropriate -- I don’t think so.”

Firm's Higher Ed Experience Minimal

In addition to concerns about the anonymous donor, some faculty are unsure whether Bain brings the appropriate expertise to a project that amounts to suggesting university priorities. The company lists non-profit groups among its clients on its Web site, but the very fact that it approaches problems differently than does academe has been touted by Thorp as a selling point.

Cat Warren, past president of the AAUP’s state conference, says it doesn’t make sense to use a company with such limited background in the realm of higher education.

“It’s like bringing in someone to operate on patient,and having someone say ‘Don’t worry, he’s not actually a surgeon, but he’ll bring a fresh perspective to the surgery,' " said Warren, an associate professor of English at North Carolina State University.

Bain officials could not be reached for comment Thursday.

The company’s agreement with Carolina provides, in the eyes of some, an early indication that Bain simply doesn’t understand academe.

The document, signed by Carolina’s vice chancellor for finance and administration, mandates that university employees conform with “talking points” when discussing the company.

“The University agrees that any oral communications made by University employees that reference the Bain name or Bain’s services will be consistent with talking points mutually agreed to by the University and Bain,” the contract states.

Steven Wing, an associate professor of epidemiology at Carolina, said he was troubled by the language.

“That sounds like an abridgement of free speech to me,” said Wing, outgoing vice president of the AAUP’s state conference.

Thorp said the language regarding “talking points” was intended to apply to “people speaking on behalf of the entire institution,” and it “wasn’t meant to constrain students, faculty and employees.”

Thorp, an alumnus and Carolina faculty member, was installed as president about six months ago. He served as dean of Carolina’s College of Arts and Sciences immediately prior to his appointment as president, and Thorp said his new position has forced him to make some choices – like this one – that may seem uncharacteristic.

“I think if you ask people about the way that I’ve handled most things in the administrative roles that I’ve had, it’s been pretty open,” he said. “This was not quite as open as I normally do things, but when you get in these positions sometimes you have to make difficult choices. But I’m confident it was the right choice.”

 

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