Wednesday, June 20, 2007


Antioch and Philanthropy

Antioch's demise has brought forth a great deal of ink, much of it smugly self-congratulatory, or bitter, or both.

Colleges fail for plenty of reasons, some of them idiosyncratic. Certainly Antioch's weird organizational structure (a small liberal arts residential college surrounded by revenue-generating graduate outposts hither and yon) isn't terribly common. Its sex code of the 1990's was a stupid, self-inflicted wound that richly deserved to be consigned to the ashbin of history. (What, exactly, is a “level” of intimacy, anyway? Is that like first base, second base? And isn't there such a thing as nonverbal communication? But I digress.) And it's not like rural Ohio is the first choice destination of most ambitious 18-year-olds. (That said, Oberlin, Denison, and Kenyon seem to do okay.)

Rather than focusing on those factors, though, I hope Antioch's demise at least prompts a more thoughtful (and urgent!) conversation about philanthropy in higher ed, and the place of non-elite liberal arts colleges generally.

Private colleges and universities that can't sell exclusivity or religion have a tough row to hoe. The elites have huge endowments and the value of the brand, so they'll be fine. Colleges with strong religious identities – especially in rapidly-growing faiths with strong 'us vs. them' outlooks – have something to offer (to some people) that public colleges simply can't compete with. Public colleges and universities (and especially cc's) are subsidized, and can compete on price. (The better ones put together an appealing combination of price, quality, and reputation. At some universities, football seals the deal.) Proprietaries generally pick hot occupational niches, and sell the concept of job placement.

But the smaller private liberal arts colleges that don't have the name brand of a Swarthmore or a Williams – even if they do have the price tag of a Swarthmore or a Williams – have a tough sell. Honestly, I wouldn't be surprised to see more of them go belly-up in the next few years. They're selling designer knockoffs at designer prices – a shaky business plan, at best. Were I to take charge of one, my first goal would be to move it towards a unique identity. Instead of being okay-to-pretty-good at a whole lot of things, be great at a few. I think of it as the Ithaca College model – what would otherwise be a nothing-special school has a powerful niche in music. Pick something specific and run with it. Of course, it's easier to do this at the outset, before faculty interest-group politics really kick in to prevent change.

Philanthropy is more complicated.

Working in a public institution, I've of deeply divided mind on philanthropy. Yes, it's great to get free money. I'm grateful to the donors who have made it possible for us to give scholarships to worthy students, and the time-honored practice of selling naming rights to buildings is a fairly harmless way to generate some much-needed income. (Even this has its limits, though. The “Budweiser Student Center”? Uh, no.)

But for reasons I'll admit I don't really understand, philanthropists as a breed are often loathe to pay for ongoing operating expenses, such as salaries. (Named chairs are an exception.) It's often easier to get funding for a building than to get funding for someone to work in it. Philanthropy often varies with economic cycles, drying up precisely when it's needed most. (When it comes to need, it's countercyclical in another way – the wealthiest institutions get the biggest donations. Donors like to contribute to success more than they like to rescue struggling or failing concerns. This is understandable, but staggeringly inefficient.) Worse – at least from the perspective of a public institution – any financial 'reserves' are counted against us at appropriations time, so we wind up right back where we started, only with more strings attached. Then when we've burned through the reserves, we're worse off than before, because getting back to where we started would require politically unacceptable percentage increases. Setting back the base rate hurts us indefinitely.

This is one area where I think we need to learn from the conservatives. As far back as the Goldwater campaign, some very smart conservative operatives figured out that the usual philanthropic fixation on 'seed money' is short-sighted, and that ongoing subsidies for think tanks – including salaries – were best thought of as investments. By providing ongoing operating funding for right-wing think tanks for decades, they were able to build the infrastructure of a movement. They understood that the point of a think tank isn't a think tank; it's political power.

Too often, I think, higher ed has failed to tie its philanthropic appeals to longer-term payoffs. So we get grants for 'seed money' but not for sustaining operations, leading to a constant (and wearing) churn of projects, rather than real progress along a single course. Of course, to make the appeal for long-term progress requires specifying and sticking to a single course – that's where the need for a niche (and internal discipline to avoid mission creep) comes in. Why should I give to Ithaca College? Because I care about music. Why should I give to Antioch College? Um, uh...

The most effective money is money that you can count on still being there next year and the year after that. Sustainable, regular, predictable money is money you can use for long-term expenses, like tenure-track faculty. (There's a direct relationship between boringly predictable financing and the ability to sustain diverse and cutting-edge intellectual projects. It's counterintuitive, but true. That's why good administrators are so hard to find – we need to be at least vaguely conversant in both, plus have at least adequate people skills.) Big, splashy, short-term infusions lead to project-itis. The wealthiest private schools figured this out a long time ago and established endowments exactly to even out year-to-year fluctuations. The less-wealthy private schools, the tuition-driven ones, need to start making some choices – select a reason to exist, if they want to continue to exist. The public sector needs to re-think the relationship between 'reserves' and 'appropriations,' to get away from the idea that gifts received now should result in reduced appropriations two years from now. I'm happy to see the college receive gifts, and grateful for the generosity of the donors (who would, after all, be well within their rights not to give at all, or to give elsewhere). But I think we – and legislatures -- need to be more strategic about what we do with those gifts.

If Antioch's death can spur some of those conversations, and help us get higher ed on better financial footing, than some good will have come from it. Instead of confirming positions long held, I'd like to see some new – and much-needed – lessons learned.

You are spot on about picking an identity in order to survive. But just try selling that to the faculty (especially at a faculty governed college), or administrators who don't seem to have the guts to tell it like it is (or the power to enforce it? I can't tell yet - I'm pretty new here). Because someone is going to get cut, or down-played, and no one wants to be that someone. Can you tell we've just started going through this process?

Seriously, I have a good shot at tenure here, but I don't know if we will exist in 30-40 years. And honestly, I don't know if we should exist. Tuition is ridiculous. I went to a very expensive Ivy sister school, and believe in small classes and the individual attention you can get without trying very hard at a SLAC, but I don't know if I'll push that kind of school for my daughter. Even with the tuition benefit, it might just be so expensive it won't be worth it.
This is spot on. The whole issue of philanthropic projects is crazy -- not just in higher ed, but the non-profit sector in general. Non- profits of all kinds spin their wheels to create new programs constantly, rather than continuing to run things that work, because that's how the money comes. (Or else they repackage what they are doing so someone can say, oh, it's new.) Foundations also want to be able to say, "Oh, we did THAT." So being part of a larger project is hard.
1) fyi, Stanford assesses an 8% overhead fee on all gifts. (Others do this too.) So 92% of a gift may have a lot of strings attached but the remaining 8% cannot.

2) It is not always "staggeringly inefficient" when donors "contribute to success". If you want to give a million to fund cancer research, then giving it to a star researcher who already has a lab with 10 students and a few million dollar grant is not a bad idea.
I'm surprised by the lack of defensive Ithaca grads!
Ah, but there's a lot to be said for an academically rigorous, smaller private u, particularly if they are smart with their fundraising, endowment, etc.

I spent sometime this spring at Denison as part of a lectureship series. I was very impressed in how carefully the institution selects the incoming class. It looks for a blend of racial, SES, and geographic diversity, using strategic use of financial aid. What the U is very good at is undergraduate education--so that is what it focuses on. It's not into empire building (which may have contributed to the fall of Antioch--how MANY far flung campuses can one have?), or having extensive, elaborate (and very expensive) professional schools.

There's a lot to be said for the smaller private U's actually honing their mission and doing that very well. Happy alumni are happy donors. Not every 18 year old can survive a Penn State, where you'll sit in Into to General Psych with 2,000 of your closet friends, or the cattle class I taught, Intro to US Education (1995-1996), with a mere 360+ of your closet friends.
DUR--That's CLOSEST, not CLOSET. The dyslexic prof is without coffee this morning.
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