The space between nonprofit and for-profit higher education gets a little more crowded today.
University Ventures Fund, a $100 million investment partnership founded by a quartet of veterans of the for-profit and nonprofit education sectors, is the latest entrant in a market that aims to use private capital to expand the reach and impact of traditional colleges and universities.
The fund, whose two biggest investors are the German media conglomerate Bertelsmann AG and the University of Texas Investment Management Company, is focused on stimulating "innovation from within the academy," rather than competing with it from the outside, David Figuli, a lawyer and partner in University Ventures, said in an interview Monday.
The projects will include helping institutions expand the scale of their academic programs, re-engineer how they deliver instruction, and better measure student outcomes; the first two investments, also announced today, will be creating a curriculum through Brandman University aimed at improving the educational outcomes of Hispanic students, and a company that helps universities in Britain and elsewhere in Europe deliver their courses online.
"Most of the attempts to bring about innovation in higher education have come from people trying to buy their way in," Figuli said, citing the many takeovers of traditional institutions by for-profit colleges over the last decade (quite a few of which he helped engineer). "Our way is to find good ideas within the existing institutions and fund those."
Figuli, a former general counsel for the South Dakota and Montana university systems, said he and his partners don't buy the critiques of traditional postsecondary institutions as unimaginative or fearful of change. "I've been in higher education for 30-some years, and most of the nonprofit institutions I've worked with have been frustrated by the fact that they're capital-constrained. They usually have a rich bank of ideas, but most get left on the boardroom floor. Because they know there are funding limitations, they never think about taking big ideas forward. We think we can help them do that." (Figuli's colleagues are Ryan Craig, Daniel Pianko and Gregg Rosenthal.)
Much of the growth in higher education came from for-profit colleges "converting" (essentially taking over) struggling or failing nonprofit institutions -- a practice that has been chilled in the last two years by scrutiny from accreditors -- or from companies like 2tor, Embanet-Compass, Bisk, Academic Partnerships, Learning House and Deltak that help traditional colleges take their academic programs online.
In the last few years, though, a new strain of entities has emerged. These use private (often investor-provided) capital to work with existing institutions to create entirely new institutions or enterprises; foremost among them is Altius Education's Ivy Bridge College (in tandem with Tiffin University), but others include Fidelis Education, which is designed to help former military service members make their way to selective colleges and universities.
Much of that activity has focused on online education, but while virtually all of University Ventures' projects -- a half-dozen or so, which it will finance either contractually or through joint ventures -- will seek to capitalize in some way on technology-enabled innovations, they will "not primarily be online," Figuli said. "To the extent we're trying to remodel higher education, you have to remodel it at the core of the institution, which is still primarily on-ground."
The project at Brandman reflects that focus, he said. Brandman, which is part of the nonprofit Chapman University System, operates both online and on 26 campuses, most of which are in California and in areas with large Latino populations. The fund's "multimillion-dollar" investment -- Figuli declined to be more specific than that -- will help Brandman create a suite of bilingual degree programs and student support services that are specifically designed to meet the language and cultural needs of the United States' fastest-growing, but educationally lagging, population.
Its other initial investment will be in distance education. University Ventures has created Higher Education Online, which will, like 2tor and the other American companies mentioned earlier, work with leading European universities to build, market and deliver their academic programs online not only in their home countries but across the continent. The company will begin in Britain, which in the last two years has revamped its system for funding universities and students' educations.
Figuli said he could not disclose the names of the partner institutions yet, but said: "think the top 20, top 30 institutions." The European venture has at least one prominent name attached to it already: Sir Graeme Davies, a former vice chancellor of the Universities of Liverpool and London, heads its advisory board.
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