South Carolina State University's board on Wednesday declared financial exigency, potentially making it easier for the university to eliminate jobs of employees, including faculty members, the Associated Press reported. The university is $20 million in debt. The university received some good financial news Wednesday when a state board gave the university a five-year delay in repaying a $6 million loan. State leaders have repeatedly criticized the financial management of the historically black university. But its defenders have pointed to years of underfunding.
Massachusetts' nine public universities will have some of their state support tied to a funding formula based on the number of students they graduate. The state board of higher education on Tuesday voted to approve the formula and will apply $5.6 million to it in the coming fiscal year.
The board described its approach to performance funding in a news release: "It is based on a complex formula of metrics and weights developed by NCHEMS, the National Center for Higher Education Management Systems. An institution’s share of the funding will be determined in part by its five-year graduation rates, annual head count, full-time enrollment, year-over-year increases in degrees awarded, the numbers of students who reach 30 and 60 credit hours each year (with additional points awarded for low-income students who qualify for federal Pell Grants), as well as numbers and types of degrees awarded (with additional points awarded for degrees in 'priority fields' such as STEM, health, business and education). Campuses are also awarded points for 'degree productivity,' the cost of producing a degree per $100,000 in total revenue."
Community colleges in Massachusetts have received some performance funding since 2013. While the formulas are different, the board said both seek to close achievement gaps and to improve the graduation rates of underrepresented minority and low-income students.
Donations to education institutions hit $54.62 billion in 2014, a 4.9 percent increase over 2013, according to the annual "Giving USA" report. When adjusted for inflation, the increase is 3.2 percent. In total, Americans gave $358.38 billion to charity in 2014, a 7.1 percent gain.
Marian Court College, a small Roman Catholic college outside of Boston, will shut down later this month, The Daily Item reported. Denise Hammon, the president, said that “as a highly tuition-dependent education institution, Marian Court can no longer maintain our operations given declining enrollment numbers.” She said that Salem State University has agreed to enroll Marian Court's students. Marian Court was founded as a two-year institution, but just last month awarded its first bachelor's degrees. The Education Department lists enrollment as 266.
The Louisiana Legislature on Thursday approved a budget deal that is expected to avert severe cuts to the state's higher education system. The deal is based on a series of legislative maneuvers to raise revenue while allowing Governor Bobby Jindal, a Republican, to say he stuck to his pledge not to raise taxes. The New York Times reported that many legislators -- Republican and Democratic alike -- used phrases like "money laundering" and "stupid" to describe the deal. But they said they were voting for it because Governor Jindal had threatened to veto all other approaches, and lawmakers did not want to see the deep cuts to higher education.
Some 65 percent of tenured senior faculty members plan to put off retirement for various reasons, according to a new study from the TIAA-CREF Institute. But the reasons behind that figure might not be what you think. Just 16 percent of respondents said they’d like to retire by the “normal” retirement age of 67 but expected to work longer for financial reasons. A much bigger proportion of respondents -- 49 percent -- said they’d want to work past age 67 by choice.
Those findings are similar to what was observed in a similar 2013 TIAA-CREF study on faculty retirement: that faculty members were putting off retirement, but not just for financial reasons in a still-bumpy economy. Some of those choices are based on “unconfirmed assumptions,” according to the report -- either that faculty members won’t have enough money to retire or that they won’t find viable work alternatives. Female faculty members are more likely than their male colleagues to expect to retire by normal retirement age. Paul J. Yakoboski, a senior economist who co-authored the report, said universities should talk to faculty members about both the financial and psychosocial aspects of retirement so that they can make informed choices. The full report is available here.
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.
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.