Fiscal Prudence or Scare Tactics

President of Pacific Oaks issues memo that alludes to possible closure, setting off debate over the institution's values and management.
August 10, 2007

It wasn't the kind of memo a college's employees like to receive. Carolyn Denham, the president of Pacific Oaks College, sent the note this summer outlining plans to "stabilize" and "sustain" the college and calling for the development of a "contingency plan for a teach-out of the college" should those plans fail. The memo pledged the president's commitment to "saving the college," but much of the language suggested a crisis. There were references to a hiring freeze, problems with "unauthorized commitments" and the need for college activities to be "managed more tightly" -- all in the name of "giving us the best chance of stabilizing and sustaining the college."

Many things about the memo disturbed faculty members and alumni. But one thing seemed especially odd to them. All signs of late have been that the college was in as strong shape financially as it has ever been -- a view that the president had boasted about in other notes and that accreditors had verified. Why would a president imply that her college was in danger of going under?

The answer depends on whom you talk to. Many alumni and current and former professors believe that the president is trying to curb the idealism that has made Pacific Oaks a beloved if unusual institution. Based in Pasadena, Calif., Pacific Oaks focuses on early childhood -- training future teachers, counselors and human development professionals, in both undergraduate and master's programs. A hallmark of the Pacific Oaks tradition has been the ability of faculty members to create special outreach efforts for low-income parts of the state. If there was a poor area that lacked teachers or resources, Pacific Oaks professors might go there, set up weekend classes, recruit students and personally see it through until a cohort was trained.

As part of the process of "saving" the college, Denham has shut down the office that manages such outreach efforts and announced strict new controls on them -- barring any new enrollments in them for now. The president's critics -- who say her desire for "order" is a poor match for the college -- say that she was trying to scare the campus into going along with her agenda.

Denham, in an interview this week, acknowledged that the college is not in danger of going under and is in fact in good financial shape, running surpluses every year and watching its enrollment and endowment grow. She characterized her memo as just one of responsible contingency planning and said she wasn't trying to scare anyone. She said that it was her determination to keep the college healthy that led her to take the unpopular steps she outlined in her memo.

Pacific Oaks "is clearly a progressive college in the way things are taught," she said, "but in the way things are run, we have to be part of the world of doing things in a business-like way."

The backdrop for the debate at Pacific Oaks is fear that too many progressive colleges are endangered. Antioch University's plans to suspend operations of Antioch College have received the most attention. But in recent weeks, the New College of California has been in turmoil over probation imposed by its accreditor, faculty anger at the administration, and the president's admission that he let a student from Nepal enroll without following standard procedures, expecting the student to subsequently be able to make a large gift.

Dissent at Pacific Oaks is on the one hand hard to identify -- many faculty members are unwilling to speak, even without their names attached, saying that they fear for their jobs. But a Web site called Pacific Oaks SOS is full of documents from the college, analysis of what critics consider flaws or inconsistencies with those documents, and calls for fighting the president's agenda. Several people associated with Pacific Oaks who would not talk about their feelings about the situation said that the SOS Web site is an accurate reflection of the concerns.

In essence both sides at Pacific Oaks see the difficulties at Antioch and elsewhere as a model. Denham is clearly mindful that other idealistic colleges have died, unable to sustain themselves. The president's critics note that Antioch University's attempt to provide what it considers sound financial management of the college could lead to its downfall, and say that the lesson of Antioch is to challenge administrators who don't share a college's vision.

Elizabeth Prescott, a professor emeritus at Pacific Oaks, said she was willing to speak publicly because she is retired and in touch with many who are fearful. "The situation has puzzled everyone. We are not in a financial crisis," Prescott said. A college focused on training early childhood educators is never going to have a Harvard-sized endowment, and Prescott said that while money has always been carefully watched, the college's leaders historically have been engaged with its mission. The current board is dominated by business leaders. Previously, Prescott said, board members regularly chatted informally with professors and shared ideas. Now the situation is much more hierarchical.

"We've always had certain core values -- open communication, trust, respect, and a lot of curiosity and willingness to take certain risks," Prescott said. In contrast, the current leaders of the colleges have "a bureaucratic vision."

Denham is "trying to change the college into an institution where everything is very neat and tidy and she can control it and there are no loose ends, and that is quite different from our vision."

Faculty members freely acknowledge that some of their programs -- especially the off-campus efforts in low-income areas -- were not neat and tidy, and didn't always involve top-level administrators. The idea was that the best people to promote early childhood education may be those who already are part of a local community, may already have years of working with children, and have relationships with local parents and schools. But these people may lack a formal education or money for tuition. To Prescott and others, these efforts -- set up in communities all over California -- represent the college's commitment to a vision that all children deserve great teachers. So groups of Pacific Oaks professors would create these programs in various communities.

To many professors, the graduates of these programs represent Pacific Oaks reaching students who would never otherwise be trained as teachers or counselors -- and directly helping some of the most disadvantaged areas of the state.

In an interview, Denham said that she wasn't necessarily opposed to these programs -- just to the way they were run. As the college reviews its plans, she said, it's possible that the off-campus efforts might be restored.

But in her memo to the staff, Denham described these efforts without much reference to the idealism that has motivated them, but with frustration about the way they didn't follow procedures.

"It is a new day," Denham wrote. "No longer will Pacific Oaks allow employees to make unauthorized commitments of any kind on behalf of Pacific Oaks. This applies to any commitments, including those made to outside organizations, to students, to current employees, and to prospective employees. Unauthorized commitments have been a major source of our financial difficulties. Individuals who make commitments without appropriate authorization are subject to disciplinary action up to and including termination."

On Thursday, after she was interviewed for this article, Denham posted an update on the college's situation on the Pacific Oaks Web site. The brief update is generally much more positive than the earlier memo, and says that "there is no better place than Pacific Oaks College for the education of leaders in professions relating to children and families." But even in this note, the off-campus efforts are criticized. "These off-campus centers were being run in a way that was out of compliance with the board-approved model and that would have led to financial uncertainty," Denham writes.

In the interview, Denham spoke with pride about the college being in good shape. Enrollment of more than 1,200 is about twice what it was when she arrived as president nine years ago. Denham said she would like to see enrollment rise to 2,000. She was clear that -- even with the off-campus efforts she banned -- the college has not faced any serious financial crisis.

All of which raises the question of why she urged the employees to develop a plan that might include shutting down the college. "What you have here is an unusual board and administration," she said. With any business, "you start to run and say what's the upside and you look at contingency plans for the downside." That's all that's been happening at the college, she said.

It's all about "being realistic," she said. "So many small colleges don't make it that we are focused on making it. We are focused on it -- maybe to a fault."

But to others involved with Pacific Oaks, the talk of just being responsible doesn't ring true. When employees received a memo about planning for the event the college couldn't be saved, "we believed it," said one former faculty member. "I don't buy it," she said of Denham's argument that she is just being fiscally prudent. "It's hardly responsible to tell people the college might be shut down when that's not what she's going to do."


Back to Top