Strategic Investment Funds: Not Just for UVa Anymore

uva_fog_smallby James A. Bacon

The University of Virginia’s controversial $2.2 billion Strategic Investment Fund is such a great idea that UVa officials are recommending it as a model for other state universities.

By adopting UVa’s approach and consolidating university reserve funds statewide, a sum that could approach $9 billion, the Commonwealth could establish an investment fund that would generate $450 million annually in extra income, UVa Rector William H. Goodwin said Monday at a Board of Visitors meeting, reports the Richmond Times-Dispatch.

Vice Rector Frank Conner also recommended the investment strategy for other Virginia public universities. “A lot of people will be calling us,” he said. “This is very creative.”

Members of the UVa board are upset by questions swirling around the creation and purpose of the fund, the existence of which was revealed publicly in a Washington Post op-ed last month by former Rector Helen Dragas before the university could manage the roll-out. Questions have arisen regarding where the money came from and why it won’t be used to dampen tuition increases rather than fund programs to enhance the university’s prestige.

Board members pushed back yesterday against outside criticism. It is “a shame we’re getting arrows in the back for being first,” said James B. Murray Jr.

Barbara J. Fried said the university needed to do more to “overcome lying sound bites.”

But the university has been slow in explaining exactly how UVa’s Strategic Investment Fund was accumulated. A month ago, the official explanation was that the money was cobbled together from $385 million in operating reserves, $620 million in “unrestricted funds and related earnings that had accumulated in [the university’s] history,” and $700 million in earnings on those funds. The university provided no detail on the $620 million in “unrestricted funds and related earnings,” and legislators have called for an accounting.

Goodwin added a bit of new detail Monday. He credited Executive Vice President Patrick D. Hogan with, as the T-D put it, “finding efficiencies in operations during the past few years that, along with investment earnings, were used to create the fund.”

Bacon’s bottom line: Let’s make one thing clear: It is great news to discover that UVa has compiled a $2.2- to $2.3-billion pot of money. That money can do a lot of good.

Apparently, UVa, like other universities, kept a lot of cash sitting around in reserves yielding very low interest rates, and Hogan deserves credit for figuring out how to tap those funds to generate a higher return in other kinds of investments. Among other things, this involved negotiating a line of credit to maintain the university’s liquidity. The payoff from this financial restructuring could be huge. If Goodwin is right and the idea could be applied to other Virginia universities, the innovation could very well revolutionize higher education finance. (The idea must be viewed with caution, however. Not all institutions have a AAA credit rating like UVa; some may not be able to leverage their balance sheets in the same way.)

But no one is criticizing the board for being creative financial stewards and investing the money well.

People have legitimate questions about where the money came from. According to UVa’s own explanation, only $385 million of the seed funding came from operating reserves. Another $620 million came from what is described as “unrestricted funds and related earnings that had accumulated in its history.”

What the hell does that mean?

Well, we learn from Goodwin that a good portion if not all of that $620 million come from operating efficiencies — cost cutting. Again, Hogan deserves kudos for the achievement. But no one is criticizing him for running a tight ship.

These are the questions that people are asking: Should UVa have used the savings from cutting costs to blunt increases in tuition and fees rather than setting them aside and accumulating $620 million? Who set up this operational fund anyway? Did the Board of Visitors ever approve the strategy of setting aside and accumulating funds from cost-cutting initiatives, a strategic decision that should be made by the board and not the administration? Did the board approve handing those monies to the University of Virginia Investment Management Co. (UVIMCO) to invest? When the board recently voted to increase tuition for incoming students by 10%, were members aware that the university had accumulated hundreds of millions of dollars, plus investment returns, from cost cutting? Did board members give consideration to the possibility that the accumulation of those funds represented a form of overcharging students and their families?

Legislators want answers, and I don’t blame them.

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19 responses to “Strategic Investment Funds: Not Just for UVa Anymore

  1. locally – the schools cannot keep money not spent on the line items items in the budget – they have to bring that money back and get it reallocated. It’s called “carry-over” money.

    If that is not what has happened for higher ed then shame on the General Assembly for ignoring an obvious loophole ripe for abuse.

    Next – if the GA does not REQUIRE explicit transparency for budget and audit of institutions that use state money – again – shame on them.

    The Feds REQUIRE explicit accounting of money for Head Start. It cannot be co-mingled with other funds and you can chalk that up to the same Fed Govt that people complain about – doing – what Va apparently does not do – and again – essentially incentivizes skullduggery … then the GA peacocks feign complete innocence when things blow up.

    Folks like Petersen – should be forthright and come out hot and strong and say – ” we made a mistake – it allowed abuse – and now we’re going to fix it with HB1 in the next GA”.

    the rest of this is just posturing and kabuki theatre for the clueless and gullible.

    OTOH – in Alumni and donors are giving money to UVA – then it’s up to them to decide how they’d like it spent.

  2. Good post and I think you captured the key questions. Thinking about the possible sources of funds, I don’t think there should be too much issue with funds that originated as unrestricted endowments, although these should still be managed with oversight and an approved use policy.

    It is in the area of “operating efficiencies” where I can envision scenarios that may be a cause for concern. For instance, if there are surpluses from the hospital side, should they be candidates to go into this fund? It can be argued then that it originates from essentially overcharging patients or that the money should properly go back into healthcare. If they come in under on construction projects, you can argue that the system can then be gamed to overstate construction costs to be able to capture the surplus.

    Perhaps there are existing explanations for all of this, I am just giving examples that come to mind.

    I note from their website that the University of Texas endowment management organization (UTIMCO) appears to keep endowment and operating funds completely separate, even though the organization manages both. Returns from operations go back into operations. That doesn’t mean UVA would need to do it this way, but it does give a much cleaner appearance.

  3. Back on April 1, 2013 I wrote:

    6/ To assure funds above tuition increases necessary to carry out its plans, Sullivan proposes the creation of an Strategic Investment Fund that will skim monies and borrowing power off the University’s normal coffers so as to place those fund outside the control of the Board of Visitors and vest the power over the monies in University administrators and faculty. (For details of the Fund see the last comment to Article “More Big Tuition Hikes ahead for UVA posted on this website on March 28, 2013).

    See baconsrebellion.com/2013/04/sullivans-plan-optimizes-uvas-institutional-self-interest

  4. Back on March 28, 2013 I wrote:

    Please note on page 99 of President Sullivan’s draft plan for the University of Virginia’s future the following statement:

    “The University will establish the Strategic Investment Fund effective July 1, 2013, to support the University’s strategic plan, scheduled for completion in fall 2013. Drawing on the fund, the University will be able to immediately build momentum for parts of the plan as soon as they are finalized. In addition, the fund will give the University the flexibility to seize opportunities as they emerge to advance its academic mission. This is especially important during this critical period in the University’s history.

    Governed by the President and the Provost, the Strategic Investment Fund will be used to support the following areas of emphasis: Selective hiring of key faculty, Start-up of new programs in high-potential areas, Collaborative projects that maximize existing synergies, Sponsored program and research opportunities, Streamlining and efficiency initiatives, Investments in the 21st-century curriculum, The seeding of innovative, paradigm-changing ideas, Development of pedagogical knowledge, methods, and processes.

    … The fund’s advisory council, including the Chief Operating Officer, faculty members, and other stakeholders, will advise the President and the Provost
    on the use of monies in the fund …

    … The Strategic Investment Fund is one element in a comprehensive University strategy to move forward from a position of strength as higher education undergoes its most profound change in half a century. Its purpose is not simply to help sustain the University during the next decade but to strengthen its distinctive qualities as it enters its third century.”

    These above provisions raise QUESTIONS –

    1. Why are these provision of President Sullivan’s draft plan for the University of Virginia’s future not an attempt to wrest control of the university’s future away from its Board of Visitors?

    And,

    2. Are they not attempt to vest that power into the University President and Provost in lieu of the Board of Visitors, effective July 1, 2013. Thus, do they not strip that power over strategic planning and implementation from Virginia’s Board of Visitors as of July 1, 2013?

    And,

    3. Does it not also establish an advisory group to advise the President and Provost on the strategic decisions guiding the universities future, effective July 1, 2013, and provide that this advisory group will include the university’s “Operating Officer, faculty members, and other stakeholders”?

    Doesn’t this not gut the current governance system of the University? It is hard to see why not. For example, the Oxford dictionary defines the verb GOVERN as follows. “Conduct the policy, actions, and affairs of (a state, organization, or people) with authority …

    James A. Bacon | March 31, 2013 at 9:05 am | Reply

    Very good point, Reed. A cynic might observe that Strategic Investment Fund = slush fund.

    reed fawell III | November 16, 2013 at 12:08 pm | Reply

    For more background on why this is happening, see article and comments (esp. last three comments) found at:

    http://www.baconsrebellion.com/2013/09/has-college-enrollment-peaked.html#comments

    SEE GENERAL THE MARCH 28 ARTICLE AT:

    baconsrebellion.com/2013/03/more-big-tuition-hikes-ahead-for-uva

    • In Terry Sullivan’s RESIGNATION SPEECH DATED JUNE 28, 2012, SHE STATED THAT:

      “Clearly we have financial challenges. Our (State’s) net financing has been steadily cut for two decades … (Our) academic mission is central. So strategic cutting and large-scale cost savings have been concentrated in non-academic areas (that) have become notably leaner and more efficient … The historic practice at UVA was that … budget cuts in the academic areas were directed by the central administration …(that) … almost inevitably lacks sufficient information to make detailed choices (so) cuts were usually applied across-the-board, the most non-strategic approach to cutting. I undertook to change this approach.”

      “In the last two years we have (also worked) to implement a new internal financial model. This is no technical accounting matter. (It) would empower deans, improve their financial incentives, and hold them accountable for the results. Each dean knows his school far better than the central administration … but the deans have had limited financial planning tools and, if they did find a way to cut costs or a creative way to raise revenue without raising tuition, there was no assurance that they would keep the savings or the revenue. (Now) we expect better financial decisions, new cost savings, and where necessary, more strategic program cuts from the new internal financial model.”

      “The budgeting changes we have already set in place this year have created transparency and accountability and dispelled the perception that politics drives the internal allocation of resources. The budget meetings that we initiated this year … (allow) the provost to work with deans on priorities for strategic investment. And often he discovers that multiple deans have … a co-investment strategy (that) will produce greater gains at lower total cost. We are making a portfolio of these “small bets” (that) cumulatively will build strength in important areas of teaching and research … No single initiative will do serious damage if it doesn’t work out.”

      “One example already under way and being expanded is the Quantitative Collaborative … Others that are well along in the planning and funding stages include: The Contemplative Sciences Center …. and our Global outreach that is broadening and deepening the connections among our international faculty, especially those who study China and Africa, across the Grounds (as helped along by my trip to China). Environmental sustainability is also a topic that excites… A new partnership with the National Fish and Wildlife Foundation (and) our widely heralded Bay Game … for study in species conservation and clean water, … one of the most important issues of this century. Many more ideas are bubbling up both from faculty and from students. These projects require new funding …and, beyond finances, there are many other innovations that I have undertaken… We greatly expanded our MLK Day celebration, We have created the 4VA telepresence consortium, We have initiated the Hoos Well program …”

      THESE WORDS IN THE ABOVE COMMENTS SUGGEST THAT THIS UVA STRATEGIC INVESTMENT FUND HAS BEEN AROUND CONCEPTUALLY AND OPERATIONALLY FOR MORE THAT FOUR YEARS.

      • INDEED THAT IT WAS AT WORK SUBSTANTIALLY BEFORE SHE WAS FORCED TO RESIGN IN JUNE OF 2012.

      • I hope you are correct; I’d like reassurance from those who know, that you are correct.

      • Ackbar –

        I believe that the real underlying cause back then in June 2012 and also today in late August 2016 is who controls the University, whether it be the Board of Visitors, or alternatively, the Administrators of the University. These issue takes of far greater significance in times of transformative change.

        • The grandest question and controversy of all is whether the taxpayers of the State of Virginia will be forced to pay for the creation of “a new Princeton at C’ville”. A new species of public university that makes it far more difficult and expensive for Virginia children to go UVA.

          Another issue is whether this model or specie of public university will set the standard for change of all first rank public institution of higher education in the United States.

          This is clearly the central goal and driving force of President Sullivan’s vision, strategy and tactics.

  5. Agree with you, Izzo, this multi-blog-posting subject is finally getting around to the key questions concerning the money — what is the SIF for, has it been funded by intentional diversions (e.g., ‘overcharges’ in the more-profitable areas or ‘savings’ on expenses budgeted but in fact avoided), has it been hidden from paying for other University needs (e.g., that big tuition hike), and did the BOV have a general understanding all along of what was going on? Dragas is a side-show.

    • Acbar –

      I agree with this comment but would add that the application and “re-purposing” of these vast sums of money, whether they go to tuition reduction or to building another new “Yoga Center”, and who make that decision, and how that decision is made, is also a very large issue within this matrix of controversies.

      Another main nub of contention are the strategies and tactics used to raise and aggregate the funds as you earlier touched upon. As well as who deploys them.

  6. ah, a little walk down memory lane: (excepted loosely from Slate)

    http://www.slate.com/articles/news_and_politics/hey_wait_a_minute/2012/06/teresa_sullivan_fired_from_uva_what_happens_when_universities_are_run_by_robber_barons_.html

    “Peter Kiernan resigned abruptly from the foundation board of the Darden School of Business at the University of Virginia – having written.. an email claiming to have engineered the dismissal of the university president, Teresa Sullivan, ousted by a surprise vote a few days earlier.
    ….
    Kiernan [had] inadvertently (hit the “reply all” button!) sent to a large group of Darden School supporters that he had plotted to convince many members of the board that Sullivan should go.

    … Kiernan wrote in the email, “Several weeks ago I was contacted by two important Virginia alums about working with [Board rector] Helen Dragas on this project, particularly from the standpoint of the search process and the strategic dynamism effort.”

    Kiernan assured his readers that Sullivan was a very nice person whom he respected. And he reassured them that sharp, trustworthy people were handling the transition process: “And you should be comforted by the fact that both the Rector and Vice Rector, Helen Dragas and Mark Kington are Darden alums,” Kiernan wrote. “Trust me, Helen has things well in hand.”
    ….
    “The Board believes that in the rapidly changing and highly pressurized external environment in both health care and in academia, the University needs to remain at the forefront of change,” Dragas wrote in her initial email announcement.

    On Monday Dragas, sensing that the university community might want some explanation for such a radical act, sent out a second message: “The Board believes this environment calls for a much faster pace of change in administrative structure, in governance, in financial resource development and in resource prioritization and allocation. We do not believe we can even maintain our current standard under a model of incremental, marginal change. The world is simply moving too fast.”

    Earlier in the statement Dragas wrote that “the board feels strongly and overwhelmingly that we need bold and proactive leadership on tackling the difficult issues that we face.”

    In a live appearance at the Rotunda, the central icon of the university, Dragas did say, “We had a philosophical difference about the vision of the future of the university.” So what were those differences? She won’t say.

    Fortunately, Kiernan’s email, leaked to newspapers on the following Tuesday, contained some clues. “The decision of the Board Of Visitors to move in another direction stems from their concern that the governance of the University was not sufficiently tuned to the dramatic changes we all face: funding, Internet, technology advances, the new economic model. These are matters for strategic dynamism rather than strategic planning.” Wait. What? “Strategic dynamism?” That struck many around the university as “strategic neologism.” Kiernan used the phrase two more times in his short email to supporters.

    Laughter ensued. It’s the catch-phrase of the year at the University of Virginia.”

    so that was then – and this is now –

    so Sullivan was canned because Dragas felt she did not have a Strategic vision ?

    but now – it’s because they created a Strategic fund?

    is there any congruence at all between Sullivan’s ouster for lacking a Strategic vision and now this “Strategic Slush Fund”?

    good gawd o’mighty – in Dragas-world – Sullivan is just no dang good… and now UVA is ruined… first by her strategic lapses then by her strategic skullduggery!!!!

    All I can say is that every now and then in the history of mankind – the right person comes along at the right time and rights a ship that is capsizing and if folks have a scintilla of gratitude and recognition in their heart of hearts – a statue of Dragas will be erected in the Rotunda….soon…

    amen. God save the Queen and the Virginia Way .

    😉

  7. Thank you, LarryG, for the trip down memory lane; thank you, ReedF, for expanding my point. You both hit on exactly what worries me. As to intent, is this merely a belated revenge by the Darden we-can-take-care-ourselves-thank-you-if-you’ll-just-give us- control-of-our-own-funds camp? Or the MOOCs-can-save-the-world-and-make-us-money-too camp? Or the Princeton-in-Charlottesville camp? Or all of the above? And as to method, the notion that a lot of this “fund” came from cost savings all around the grounds implies that these savings were not returned to the department that did the saving, or to students through reduced tuition and fees, but retained and accumulated by the university while tuition and fees remained high, is really shocking. FOIA may have helped open our eyes to this but the money games are the heart of the matter. If, as you say, Reed, “This is clearly the central goal and driving force of President Sullivan’s vision, strategy and tactics,” or of retired Pres. Reveley at W&M, what kind of educational monsters have we created here in Virginia?

    Jim, if you’re still following this conversation, I hope we can return to this in a future post

    • Acbar, thank you again for your excellent comments and insights. There is a missing piece that is I believe appropriate for this particular place, if only to lay down a complete record for future discussion. It arises out of exchanges between you and I.

      Please note my August 17, 2016 at 7:35 am comment, namely:

      Ackbar – I believe that the real underlying cause for the Dragas Sullivan controversy back in June 2012 and today in August 2016 is who controls the University – whether it be the Board of Visitors, or alternatively, the Administrators of the University. This central issue takes on far greater significance in these times of transformative change.

      Please also note my August 17, 2016 comment at 8:07 am, namely:

      (And) The grandest question and controversy of all is whether the taxpayers of Virginia will be forced to pay for the creation of “a new Princeton at Charlottesville. A new species of public university that makes it far more difficult and expensive for Virginia children to go UVA …

      (AND ALSO) whether this model of public university will set the standard for change of all first rank public institutions of higher education in the US as this is central goal and driving force of President Sullivan’s vision, strategy and tactics, (according to her statements recorded as far back as May 2012).

      THESE EARLIER COMMENTS also raise the question what exactly is Sullivan’s model or specie of public university. The one that will set the standard for change “for others to emulate,” given that achieving this goal is a “central tenant” of Sullivan’s administration of UVA.

      A good way to understand the structure and workings of such a model new public university as envisioned for UVA is to carefully read a draft document entitled:

      PRESIDENTIAL WORKING PAPERS,
      DRAFT – APRIL 7, 2013
      University of Virginia Strategic Planning Initiative
      Public University Working Group
      A DEFINING AND DIFFERENTIATED VISION FOR UVA AS A UNIQUE AND PREEMINENT PUBLIC INSTITUTION

      Yes, believe it on not, this is the title on the document found at: https://assets.documentcloud.org/documents/785804/university-of-virginia-planning-group-report.pdf

      The document comprises 11 dense, singled spaced pages. Here are some highlights edited and/or paraphrased in part for brevity but outlining the Sullivan Administration’s draft future for UVA at the time.

      Response to Change and Challenge –

      …To achieve success (today), universities (must) retain and/or establish significant management flexibility. Like executives in any major organization operating in a fast-paced and competitive environment, senior university leaders must (be able) to innovate and to mobilize sources quickly. They must start new programs and close programs that are no longer relevant without endless discussion and review. They cannot be unduly constrained by bureaucratic rules and approvals that limit creativity and responsiveness. These leaders must be given appropriate responsibility and authority, and then they should be held accountable over the intermediate and long term for the outcomes.

      Governing boards must demand strategic and operational excellence and provide strategic oversight and support, without intrusive and stifling micromanagement. Board members must be well educated with respect to the forces and challenges facing higher education and the university that they govern, and they must become a strong advocate for public higher education and for the institution that they serve.

      In short, public universities must become more nimble, professional, market – and decision-oriented, or they will quickly lose ground to private schools and for-profit educational organizations. This reality suggests a new relationship or revised partnership between the public university and the state in which it is located …

      (To deal with all these transformation forces and to insure UVA’s success in the future)… the Public University Working Group recommends … a new contract between the University and Commonwealth … Without one, the long-term ability of UVA to compete and operate effectively and efficiently will be severely compromised.

      The guiding principals behind this new contract should be:

      … 1/ A New contract with the Commonwealth

      … to change the status of the University from a state controlled and state supported entity to a state affiliated or state associated institution … The primarily implication of this change would be much greater flexibility and management discretion (that) allows senior leadership even more self-governance and decision-making flexibility. This change would not mean complete privatization; rather, the Commonwealth would withdraw from direct influence on many of the strategic decisions involved with running a major university in the 21st Century. The University leadership team would have substantial authority and responsibility, and would be accountable to the Board of Visitors for mutually agreed upon outcomes and processes. In return for this self-governance, the Commonwealth would end (its current form of appropriation to the University and replace it with following new system:)

      A cornerstone of this new model focuses on tuition. UVA should have a single base tuition rate for all students, both residents of the State and students from outside the state. This tuition should be similar to the current non-resident tuition level … the State then has the option of providing UVA with an allocation that “discounts” tuition for Virginia residents. The level of this discount could depend on (the students) ability to pay, (so) UVA is potentially accessible to all Virginians. Ideally … the State would set this discount plan for a rolling four-year period so … and so adjust the “price” of contributing to educational quality and facilitating access for all Virginia residents through this allocation.

      2/. Need for professional BOV members:
      Under this new contract … with increased discretion and authority comes tremendous responsibility, and UVA must continue the transition from primarily a state and political entity to a professionally managed organization. In addition to ensuring the very best leaders at the top of the institution (e.g., President, Provost, COO), the Board of Visitors assumes an even more critical role in oversight and monitoring of vision, goals, and strategy.… (BOV) nominees should meet a defined set of selection criteria focused on their knowledge of and experience with major issues involving higher education (i.e., industry competence), (and) their knowledge of and experience leading and governing large, complex organizations (i.e., management competence and financial skills).

      The BOV should also have initial and ongoing educational requirements that prepares them and maintains their expertise to deal with issues confronting higher education and UVA. Their selection process … (also) needs to change … to ensure a highly skilled and competent Board. The current practice of all nominations coming from the governor should be ended. One approach could (be) an independent, expert selection panel that develops and receives nominations for the Board from University stakeholders … including faculty, staff, students, and alumni (to insure that BOV members) … be seasoned experts in governing and leading a major university and complex organization in the 21st Century. The Governor (could) nominate qualified individuals … (from those chosen by stakeholders.)

      3. Attract the Best Students
      In recent years, the State and University have agreed that the undergraduate enrollment mix should be approximately 70% Virginia residents and 30% non-residents. … UVA should maintain its commitment as a public university but the enrollment mix (of in-state versus out of state) should shift to ensure the University’s status as a preeminent national and global university. This shift probably involves a larger portion of non-resident students. The best and brightest Virginians would still have special access to UVA … (but now) the tremendous benefits associated with attracting outstanding students from around the world would accrue to the Commonwealth and University.

      4. Insure access and provide opportunity
      … University leaders (also) need to develop a plan that addresses all the important goals associated with financial aid, ensuring access and competitiveness for the best students, Va residents and non-residents alike. The BOV should be directly involved in the review and approval of this plan as it will be an essential component of the overall four-year financial plan and a key (to) promoting a high-quality and diverse educational experience for whole student population, and include AccessUVA. The (state) could also allocate additional funds for financial aid for qualified Virginia residents in addition to the tuition “discount” discussed above, (and so dedicate state) funding to ensure access for students consistent with current state goals and programs. For example, additional state aid for Virginia students in STEM disciplines that may contribute to the states economic development goals … (Thus State and UVA) could work together to achieve common goals under the new contract.

      5. Commitment to public service and leadership
      …UVA should emphasize and expand academic programs and extracurricular activities with a strong public service component of ongoing value to the Charlottesville, the state, the nation, and the world … With the new funding model and increased management flexibility, these programs could be started and managed much more quickly and effectively with appropriate resources dedicated to them to ensure access and success. These programs also should have a major fundraising component.

      6. Strategic investment in new market-based initiatives –
      With greater self-governance as a new form of public university, UVA will be challenged to generate additional revenues beyond tuition from traditional residential students. Faced with likely reduced state funding, and consistent with its public mission, UVA should develop a culture and invest in the infrastructure required to encourage and support revenue-generating program innovation. All stakeholders, from senior University leaders through deans, department heads, faculty, and staff, should identify market opportunities, particularly in areas of academic strength, and then appropriate faculty and staff should develop and introduce high-quality degree and non-degree programs to meet these opportunities. With cost reductions in other areas, and a new approach to budgeting and revenue sharing, UVA should be able to offer entrepreneurial faculty and staff the venture capital required to develop and introduce these programs. Schools and departments will be able to use the revenues generated by these programs to invest in other programs and activities that are critical to the University’s academic mission, but ones that may be unable to generate direct revenues.

      These programs may be offered in Charlottesville, in other parts of the Commonwealth, and around the nation and the world. Depending on program and audience, these programs may be traditional classroom experiences, hybrid programs, and/or online programs. They may be offered independently or collaboratively with other institutions and organizations. Although UVA should be creative and responsive with these programs, it also must emphasize quality and the other values associated with a UVA program and education. At the same time, UVA should regularly review all programs to ensure sufficient demand and role in the academic mission. If they do not, UVA should revise or eliminate them. Finally, UVA should continue to enhance and expand a professional fundraising effort at all levels. With new independence for UVA, alumni, corporations, parents, and all stakeholders need take greater responsibility for investing in growth, innovation, and the long-term financial stability and health of UVA.

      7. Premier residential undergraduate education
      UVA should reaffirm its commitment to residential undergraduate education as part of the new vision and strategy. Although UVA should continue to explore and implement options involving the use of new educational technology … the essence of UVA is the residential student experience both in the classroom and through extracurricular and co-curricular activities. The new contract should enable UVA to enhance and expand these opportunities, fund them properly, and integrate them better into the life of students during their time in Charlottesville.

      Conclusion
      Now is the moment for bold, decisive, and transformative action. UVA is faced with many of the same issues confronting all of higher education, but, as a world-class public university, UVA has opportunity to lead in advocating value of higher education with a new model for excellence in public higher education. Rather than shedding its commitment as a public university, the proposed new principles allow UVA to be both public and professional, managing effectively and efficiently within the new realities of its economic and political environment. Without question, the path to this new contract with the State will require skilled planning, negotiation, communication, and execution, but University leaders should rally all relevant stakeholders to participate in and support the specific formulation and implementation of this new vision and strategy … We look forward to participating in this exciting and innovative chapter in the history of the University of Virginia.

      • In the middle of a hot lazy August no less. UVA has opened up with its new Public Relations offensive. This will be a very interesting discussion.

        Please See:
        http://pilotonline.com/opinion/columnist/guest/gerald-warburg-a-virginia-success-story/article_eb2a1c55-6e3c-5ed7-b662-e84950d395d5.html

      • So the criticism that the University is being gradually privatized is spot on. If you believe that privatizing the school is preferred, then you’ll be applauding along with Gerald Warburg. If you believe that privatizing should be a Commonwealth-wide discussion, or just plain don’t believe that American students need yet one more aspirational elite institution chasing the same handful of top students, then you’ll feel sick.

        As I read the bits about changing the make up of the BOV, it’s clear that the administration see its duty, and wants the duty of the BOV to (shift) to the institution–to serve the interests of the institution. This is hijacking their current mission, which is to serve the Commonwealth.

        Boom–big philosophical difference.

        • In Sullivan’s June 18 2012 “resignation speech, she declared that since stepping down 8 days earlier (on June 10):

          “The current reaction by the faculty, staff, and students on and off Grounds, and among the donors and alumni to my impending departure, is not something I have stirred up. I have made no public statement. I have done my best to keep the lowest possible profile. I have fulfilled previous commitments at the White House and elsewhere in Washington, and I have visited with friends in another state. I have not even responded to the innumerable people who have reached out to me personally and demonstrated their love for this great institution …”

          I have often wondered about those “previous commitments at the White House and elsewhere in Washington.”

          I also wonder what roll Virginia’s current governor has been playing in recent events at UVA, given his obligation to look after the interests of Virginians.

  8. Interesting. This editorial is all about using the Strategic Investment Fund to self-fund (or you could say boot strap) research, which the University of Michigan does extensively. Teresa Sullivan was a provost at Michigan. They may have even brought her in to do exactly this.

    This raises another point. I always thought what made UVA relatively unique compared to other state universities was the level of attention given to undergraduates across the board (not just in honors programs and emphasized programs like engineering). If the SIF is focused on research, it would not appear to directly benefit the undergraduate experience.

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