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Study: U.S. higher education receives more from federal than state governments

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Federal spending has overtaken state spending as the main source of public funding in higher education.

Audit Criticizes College of DuPage Management

An internal audit released Tuesday by Illinois's College of DuPage found the community college invested far more in an investment pool than college policy allowed, and that this decision resulted in a loss of $2.2 million, The Chicago Tribune reported. College policies barred investing more than 5 percent of the college's money in local government funds, but DuPage officials placed 29 percent of its money in such a fund, without authorization to violate the college's policies. When that fund revealed that it had been defrauded, losing much of its investors' money, DuPage lost $2.2 million. Had the college followed its policies, it would have lost less than $400,000. Two finance officials from the university have been placed on administrative leave pending the final results of an ongoing investigation.

"These actions are utterly unacceptable," said the college's acting interim president, Joseph Collins, in a news release. "We are taking steps now to ensure this breach of trust with the taxpayer never happens again. We are addressing each of the auditor's recommendations…. In the meantime, we must continue to focus on doing our best work to serve our students and the region."

The audit is just one of a number of problems the college has been dealing with in the last year and a half. The Chicago Tribune reported that the audit was available to top administrators months ago, but was suppressed. The report resurfaced after a new Board of Trustees majority took over and President Robert Breuder was placed on leave.

Essay urges people to applaud Harvard's fund-raising success

For many institutions, a significant gift that advances the mission is an aspirational achievement, one that can impact many lives for the good, both on the campus and far beyond.

And in today’s high-stakes higher education funding model, advancement professionals are expected to find and secure these substantial and transformational gifts, working in partnership with their academic colleagues, institutional leadership and potential donors to help our institutions fulfill their missions, at least, and change the world, at best.

In 2009, the number of institutions in the United States with active fund-raising campaigns of $1 billion or more was 38. That number increased to 45 by 2015, with an additional 4 outside the U.S. To achieve these outcomes, institutions will need to secure more and more gifts of at least $1 million. In 2013 alone, 531 donations of at least $1 million and 147 contributions equal to or greater than $10 million were given to American colleges and universities, which means that yesteryear’s $1 million gift is tomorrow’s $400 million donation.

There is nothing wrong with institutions -- even those that are well endowed -- seeking the resources they need to provide world-class educations and experiences to their students today and well into the future. And now the Harvard School of Engineering and Applied Sciences is a significant step closer to achieving that goal based on John A. Paulson’s remarkable $400 million gift.

That success should be celebrated alongside the fund-raising successes of many institutions across the country. But I’ve read critiques that state Paulson should have given his gift elsewhere -- somewhere more “worthy” or more “needy.” But the reality is that donors support the causes for which they are passionate. And in that way, all gifts are worthy.

This criticism, if left unanswered, could create an environment in which donors are more reticent with their philanthropic investments or prefer to make anonymous gifts. Were that to be the case, our institutions would be the poorer -- impacting students and life-changing research.

Most major gifts are tied to a long and carefully built relationship where the donor’s vision and institution’s priorities overlap in areas in which they can, together, make a transformational impact. And I believe Paulson’s gift to the engineering college is such an investment. A successful hedge fund manager, he clearly has a strong business acumen and the ability to invest smartly.

Harvard successfully made the case for the impact his gift can make for future students and for American innovation writ large. Paulson affirmed his appreciation for his alma mater by saying, “There is no question that the support and education I received at Harvard was critical in helping me achieve success in my career. Now I feel it is important for me to do something impactful and meaningful for Harvard.”

That type of enthusiasm for advancing education should unite, not divide us. Donors are often motivated by gratitude combined with a passion for philanthropy and investing in education -- whether they be five-dollar annual contributors or alumni with greater means.

Higher education and the general public’s celebration of a $400 million gift (the ninth largest to higher education) would seem to me appropriate because we know that the impact, visibility and scale of a gift of this significance has the ability to inspire further philanthropy to academe, including at many of the institutions that have more modest endowments or level of private support. Harvard’s success does not impede the ability of other institutions to approach their alumni and potential supporters for similarly transformational gifts. In fact, it encourages it.

I challenge all of us to laud Paulson’s record-breaking contribution and then get back out there, make the case for our institutions’ experience and outcomes and ask for others to be similarly inspired to make a profound difference.

Sue Cunningham is president of the Council for Advancement and Support of Education.

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Essay criticizes the $400 million gift to Harvard

I have been a college president for over a decade now. During my career I’ve not shied away from using the bully pulpit to address a number of issues. This includes questioning obscene gifts wealthy individuals have given to obscenely wealthy universities that primarily serve an obscenely wealthy student body.

If you don’t believe me, ask Dr. Dre, whom I took to task when he donated (along with Jimmy Iovine) $70 million to the University of Southern California. In 2007, I wrestled with the celebration of John Kluge, who gave Columbia $400 million, at the time the fourth-largest single gift ever to a university. I argued that this gift was simply the perpetuation of privilege.

Eight years later, Harvard University is in the news as alumnus John Paulson donated $400 million, the largest single gift to the oldest university in the United States and richest university on the planet.

But something is different today. A chorus of people from diverse backgrounds publicly expressed consternation about this gift. Some argued that gifts to the wealthy are not charity. Some lamented that the taxpayers pay for the tax breaks for the wealthy. Others still, notably Malcolm Gladwell, highlighted pressing issues we see across the globe and questioned how anyone could make this kind of gift today.

This is good. Diverse voices are now beginning to think critically about issues of equality and wealth. Whenever I’ve raised the issues, predictable criticisms come in. They tell me I’m just a hater because my institution is a poor performer (as they compare underresourced colleges against overly resourced ones as if they are equal).

This is just like saying Slovenia performed poorly in the 2014 Winter Olympics since the U.S. won 28 medals to its 8. Yet in medals per capita they were 4th (we were 21st), and in medals per GDP they were 2nd (we were 23rd). Slovenia did more with less (just like historically black colleges).

Others ask their favorite version of the “why do we need black colleges” question in this era of resegregated K-12 schools and overwhelmingly segregated neighborhoods, where all of our taxes support public, historically black elementary, middle and high schools. And yet these same folks were silent when black Harvard students through the I Too Am Harvard campaign complained about the racism they experience daily.

Hedge fund managers defended Paulson, arguing that giving resources to the brightest Americans will have a multiplier effect for the nation. The recent survey of the Harvard graduating class of 2015 indicated that a third of them are going into their top two career choices: finance and consulting. If multiplier means personal wealth, that defense of the gift is correct.

Some praised the gift because it will support research and innovation that can benefit humanity. Of course this is true, but if we don’t address key issues like K-12 education and job prospects for all, only the wealthy will benefit from these great advances.

Other argued that the gift would also be for scholarships and financial aid. In fact, when the pushback began both Paulson and Harvard reiterated this point, noting that low-income students could attend for free. It is on this point where I realize that we have much more work to do.

Here are the facts. Harvard’s total cost annually is $62,000. Yes, that’s just the sticker price, but when more than 40 percent of your student body receives no aid at all, we’re not talking about a needy population. Just 17 percent of the student body receives Pell Grants. At my institution, Dillard University, 98 percent of my students receive some form of aid, including 80 percent receiving the Pell Grant.

The Harvard Crimson reported that in the recent freshman class, the average student comes from a family with between $125,000 and $250,000 in annual income, and 14 percent have household income above $500,000, placing them among the wealthiest in America. The median family income in New Orleans, where I work, is $35,000, and for my students is $31,000. The writers for The Crimson said it best in describing the class of 2017: “In Harvard Yard, 14 percent are the 1 percent.”

This gift increases Harvard’s endowment by a little over 1 percent. For me? It would increase it by over 500 percent. In fact, with a $400 million gift, I could use a 5 percent spending rate and pay the tuition and fees for all 1,200 Dillard students -- with money left over.

And that’s where we have to mature as a nation. Mega-gifts to the mega-rich can best be described as trendy. Everyone likes a winner and to be associated with a great brand. Harvard is so good they don’t need a tagline or branding campaign. If they did I imagine Dave Chappelle yelling, “Harvard. We’re rich, (rhyming bad word)!”

In fact, the key defense for these trendy gifts is always, “It’s his money.” I agree 100 percent. Paulson and Harvard only need to say that Harvard is his university, nurtured him, and he is blessed to do whatever he can for something he loves like family. They could simply drop the mic and move on.

This is in fact the best, most succinct and sincere answer they can and should give. Anything else is crap.

But when do the Paulsons of the nation transform the lives of people they may never meet? I tell donors when they support a Dillard student, they aren’t just supporting that student or changing their trajectory -- they have transformed generations of a family. It means a student on full scholarship doesn’t have to work two or three jobs to continue to support the family back home. It means a student can accept an unpaid Washington internship rather than cobble together summer jobs to pay tuition that is a fraction of Harvard’s.

The discussion around this new gift is encouraging. A new level of consciousness is growing. Hopefully we’ll have a new level of courage among ultrawealthy individuals, a level that allows them to share their resources with those who might not look like them or share their background or experiences.

People who, with the right investment, produce a generational multiplier effect that a gift to Harvard could never produce. This requires a transformational love, a love for those we do not know and will never meet.

Walter M. Kimbrough is the president of Dillard University.

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Clearwater Christian College Closing

Clearwater Christian College announced Friday that it will close due to myriad financial challenges. Clearwater, founded in 1966, is a small Christian college in Florida. It enrolls about 500 students, down from about 600 students a decade ago. Declining enrollment, increased debt and the lack of a sizable endowment precipitated the closing, the college said in a statement posted on its website.

“The board and administration of Clearwater Christian College thoroughly investigated a variety of short-term and long-term viability options,” read the statement. “Unfortunately the related due diligence process did not yield a resourced solution to the operational stress points of the college which could ensure completion of another academic school year.”

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Georgetown Will Sell Holdings in Coal Companies

Georgetown University announced Thursday that it will sell endowment holdings in coal companies and seek not to make such investments in the future. A statement from President John J. DeGioia said, '“The work of understanding and responding to the demands of climate change is urgent and complex. It requires our most serious attention. As a university community, we can best respond to this evolving and ongoing challenge when we embrace the tensions embedded in this work -- and the variety of perspectives that are present -- as we seek an ever deeper understanding of how to respond best in ways that contribute to the common good." The resolution adopted by the university's board stated that only an "insubstantial portion" of the $1.5 billion endowment is invested in coal companies.

GU Fossil Free, a student group that has been pushing for university to sell holdings in oil, gas and coal companies, said that the university has not gone far enough. "It is evident that the university made its decisions for mostly financial and public relations reasons. If the board had made their decision for principally moral reasons, then they would have supported full divestment," said a statement the group posted on its Facebook page.

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Chief business officers must broaden their skills and roles (essay)

The role of the chief business officer is changing (and expanding) dramatically, and current and prospective CBOs must broaden their skills and approaches, write Thomas Ayers and Karen Goldstein.

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No-Cost Degrees for Anthem Employees at College for America

Anthem Inc., a national health care company, announced Tuesday that its 55,000 employees can pursue a no-cost associate or bachelor's degree at College for America, a competency-based subsidiary of Southern New Hampshire University. The new benefit is available to any Anthem employee who works 20 hours or more per week and has been employed there for at least six months. The company's tuition reimbursement plan will cover the full price of the online degrees.

Southern New Hampshire is the first of six institutions to have received approval from the U.S. Department of Education and regional accreditors for direct-assessment academic programs, a form of competency-based education that does not rely on the credit-hour standard. Students can move at their own pace in direct-assessment degree tracks -- taking as much or as little time they need to master the required competencies.

“Anthem is committed to offering its associates a robust benefits package that goes beyond salary and health benefits,” Jose Tomas, chief human resources officer at Anthem, said in a written statement. “Our partnership with College for America has proven successful for our associates who participated in the pilot program in New Hampshire, and we want to build on that success by providing opportunities for education, development and career advancement to all our associates.”

Paul LeBlanc, Southern New Hampshire's president, said thousands of Anthem employees will benefit from the partnership.

“As an employer, Anthem is building talent and the skills needed for promotion in its workforce while associates earn an accredited degree that will help them get ahead in their life and career without taking on debt,” LeBlanc said in a written statement.

'The Big Bang Theory' Backs Student Aid at UCLA

The hit television show The Big Bang Theory is about young scientists, and the real co-creator of the show, along with many cast and crew members, has created a scholarship for science students at the University of California at Los Angeles. Already $4 million has been raised from the Chuck Lorre Family Foundation and actors such as Johnny Galecki, Jim Parsons, Kaley Cuoco-Sweeting, Simon Helberg, Kunal Nayyar and Mayim Bialik. The show has many ties to UCLA -- Bialik, who portrays Amy Farrah Fowler, earned a doctorate in neuroscience at the university, and the program’s science consultant is David Saltzberg, a professor of physics and astronomy at UCLA.

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Duquesne Increases Minimum Wage to $16 an Hour

Duquesne University announced Wednesday that it is increasing its minimum wage to $16 an hour, far above the $7.25 required by federal and state law. Last year, the university set its minimum wage at $15 an hour. In addition to the extra dollar an hour, the university announced that it will give employees whose salaries are below $34,000 a 0.5 percent raise. Further, the university is making a $500 contribution to employees' dependent-care flexible spending accounts.

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