Our Little Five Billion

UVa President James Ryan

by James A. Bacon

University fund-raisers are like presidential elections — as soon as one campaign ends, another one starts. Here in the Old Dominion, the University of Virginia is in the midst of a $5 billion boodle-building campaign. Meanwhile, Virginia Tech is raising $1.5 billion, the College of William & Mary $1 billion, Virginia Commonwealth University $750 million, and George Mason University $500 million. That’s pretty serious dough. For purposes of comparison: Harvard, the wealthiest institution of higher education in the country (and probably the world), raised $9.6 billion in its last five-year campaign.

It never ceases to fascinate me how higher ed, which obsesses over issues of racial and socio-economic equity, has become such an engine of elitism. Donors get tax write-offs for their contributions, and public university endowments pay no taxes on income. (The 2017 federal tax law imposes a 1.4% excise tax on private-institution endowments worth $500,000 or more per student.) Here in Virginia, public university endowments also are exempt from the Freedom of Information Act. Sweet deal — tax breaks out the  wazoo, and freedom from public scrutiny! All to benefit whom? Faculty, administrators and, disproportionately, the children of the well-to-do.

Not surprisingly, university administrators cast their pitches for mo’ money as benefiting students and the public — more financial aid, more enriching education, more research, and, of course, as UVa President James E. Ryan, puts it, a “fearless search for truth.”

You can’t spend $5 billion without doing some good for somebody. But it bothers me that almost no one ever pushes back. No one ever questions the fund-raising goals. No one asks if the money could be spent to better effect elsewhere. There are rare exceptions — listen to Malcolm Gladwell’s podcast, “My Little Hundred Million.” But you never hear such voices in Virginia.

The most prestigious institutions have the wealthiest alumni, who, after making oodles of money, express their love and gratitude by “giving back” to the institution to whom they owe so much. In this process, subsidized by the tax code, great societal wealth is bestowed upon institutions that cater to students who (a) disproportionately come from affluent backgrounds, and (b) given their social connections, cognitive skills, and education at a prestigious institution, are far more likely than other Americans to have fantastic careers and make loads of money.

Not only do the vast majority of philanthropic dollars go to prestigious schools serving affluent students, they incur what economists call “the law of diminishing returns” in which each additional unit of input (whether land, labor or capital) delivers diminished value.

You can’t find a more perfect illustration of the law of diminishing returns than spending some time with UVa’s strategic plan. Here’s how UVa proposes to spend its alumni-funded, tax-subsidized boodle:

  1. SuccessUVa. More money for financial aid for low- and middle-class students; for academic advising and career advising; and for “support [students] need to thrive on Grounds” such as a new Health and Wellness Center, a new Contemplative Sciences Center to foster “resilience, and a new Multicultural Student Center.
  2. Citizen-Leaders for the 21st Century. More money to establish residential communities where students have “a meaningful opportunity to live and learn together in a diverse and inclusive community” and in a globally connected world.
  3. Third-Century Faculty Initiative. More money to recruit “the very best researchers, teachers and mentors,” and, it goes without saying, promoting diversity. Also, more money to recruit talented and diverse doctoral students and post-doctoral fellows.
  4. Pathways to Research Preeminence. More money to invest in research infrastructure, a Catalyst Fund to seed new research, and advance five priority areas: Democracy, Environmental Resilience & Sustainability, Precision Medicine, the Brain & Neuroscience, and Digital Technology.
  5. Cultivating Staff Success. More money to recruit “a talented and fulfilled University staff.” “We will … build on existing leadership programs and develop robust careers paths across the University.”
  6. Good Neighbor Program. More money to work with community partners, advance sustainability goals, and launch the Center for the Redress of Inequity to “model how public research universities can help reduce racial and socioeconomic inequities in our local communities.”
  7. Bachelor’s Completion and Certificate Programs. More money for the School of Continuing and Professional Studies to make bachelor’s-completion programs more accessible to adults.
  8. Open Grounds at Emmet-Ivy. More money for converting a 14-acre site to create three interrelated “nexuses” — creativity, democracy, and discovery — that promote cross-disciplinary endeavors.
  9. School of Data Science. More money to establish a School of Data Science, a “school without walls” to “leverage the power of data across all disciplines.”
  10. Broadening our Horizons. Extend business, engineering and data-science educational programs to Northern Virginia.

Talk about diminishing returns — my case rests!

In fairness, some of these initiatives may offer genuine value. I like the idea of a School of Data Science. The future will be data-driven, and the world will need more data-savvy college graduates. And it makes sense to build ties with Northern Virginia, Virginia’s most economically dynamic region.

Other ideas are potentially beneficial, depending… More money for research is probably a good thing, as long as it isn’t subsidized by under-graduate students. (Unfortunately, university accounting is too opaque to know if that’s the case or not.) More money to recruit more prestigious faculty members is potentially beneficial, but only if the faculty are recruited to teach something resembling full course loads as opposed to engaging in their own writing and research. More money from scholarships is worthy, although not if it provides window dressing for continued exploitative increases in tuition, fees, room, and board.

Some proposals have very low marginal utility. The strategic plan pays continual obeisance to “diversity,” as if that were not already a priority at UVa. However, I question the value of diversity indoctrination that makes students hyper-race conscious, inculcates African-American students and other minorities with a victimhood mentality (ironically, while UVa dis-favors Asian students in admissions), and makes students fearful of committing “micro-aggressions.” That seems a recipe for making it more difficult for students of diverse racial backgrounds to interact easily and form inter-racial friendships. If your goal as a philanthropist is not to promote African-American self-segregation in multi-cultural student centers but to educate blacks in preparation for entering mainstream work and society, who could doubt that Norfolk State University or Virginia State University could accomplish a lot more with an extra billion dollars or so than UVa could?

Finally, some initiatives could be best characterized as having dis-utility — spending more money to cause actual harm. For instance, the idea of liberal-progressive UVa faculty members disseminating their liberal-progressive public policy proposals to local Virginia governments is downright terrifying!

The vision for UVa’s strategic plan may please alumni of a left-of-center political persuasion. But to alumni of a conservative or libertarian bent, the plan is money largely pissed into the Rivanna River. Mr. Jefferson’s university is duping alumni out of $5 billion — and reaping tax subsidies as well — to advance goals that are antithetical to the values of many of us.

One statement Ryan made did make sense (at least in the abstract): “We must reimagine what will be expected of universities in 2030.” Very true. But given the way Ryan is reimagining higher education, conservative and libertarian alumni should ask themselves if they can do more good for the world by giving their money to almost anyone else. Consider instead a donation to Partners for Affordability and Public Trust.

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17 responses to “Our Little Five Billion

  1. A lesson in UVA’s grand hypocrisy:

    “… an assumption exists that teachers don’t need differentiation if they are teaching a group of students who test on the same readiness level. These kinds of classes, called leveled or tracked, are when more advanced students are clustered together in one class, more “typical” students in another, and students who struggle academically in another. It is not unusual for high schools to have as many as four or five tracks.

    “There are at least two problems with this assumption,” Tomlinson said. “First, there is really no such thing as a homogenous class. Every classroom is a mix of students with varying readiness levels, interests and preferred approaches to learning, and backgrounds.”

    Students who test similarly in one subject may not in another, and in fact, their strengths may vary significantly across components of the same subject. Also, students who test similarly have a wide variety of interests, talents, maturity levels, personalities and experiences. Differentiated instruction is a way of thinking about teaching any and every class, according to Tomlinson.

    The second myth Tomlinson works to dispel is that tracking is best for all students.

    She says that students who are put in lower-track classes are generally sentenced to a low-quality education, and that is frequently a sentence that predicts struggles throughout adult life. Students who are in “middle” tracks often come to see themselves as “just average” – not worth of particular note, and not likely to do anything particularly interesting or important in their lives. Students in advanced tracks often have the strongest teachers in a school and the richest learning experiences the school offers. But they, too, lose a great deal when their classmates are restricted to very high achievers. School can become a competition that has to be “won.”

    “Stress resulting from academic pressures can become quite toxic,” Tomlinson said. “These students frequently lack opportunity to hear from, understand the perspectives of, and form bonds with people who are representative of the diverse world in which we live.” End Quote: For more see, https://news.virginia.edu/content/renowned-educator-and-scholar-carol-tomlinson-defined-new-way-teaching

    The grand lesson here that UVA pushes is that what is good for you, is not good for me. But I am going to shove it down your throat anyway, and dress it up in a clever disguise, despite all the failures that have followed in its wake, and why I will never follow the rules that I demand of you. Why? It makes me look far more important and virtuous than I am.

    • Regarding the toxic stress of testing — I guess that explains why China, Korea, Japan, France and other countries that rely upon high-stakes testing churn out so many stupid high school students. I guess that explains why, when those stupid students come to the United States, such students become such miserable failures. Yeah, right.

      • “tracking” is an issue. It depends on how “tracking” is done. Tracking that ends up dooming the kid to THAT track is wrong.

        There is institutional bias in “tracking” in that it’s easier to keep a kid in the initial track than it is for that kid to move up to other tracks and that’s especially true of kids who start out -“behind”. Kids of College-educated parents usually start out well-prepared but kids of parents who are not well-educated will not – even if they are the same IQ-wise. They will continue to under-perform until they get specialized help to help them achieve what they are innately capable of .

        It’s just “easier” for the schools to group kids in “ability groups” but that’s NOT the best thing for the kids.

        “tracking” and “grouping” is fairly common in almost all schools though it’s done informally because formal tracking is considered wrong.

        College-educated parents push hard for their kids to excell AND for the school to offer the programs and resources that enable them to do so.

        Non-college educated parents are pretty much clueless as to engendering ambition in their own kids much less presurring the schools to provide the resources their kids need to advance to what they are actually capable of.

        Bottom line, well-educated parents prevail when push comes to shove. No principal is going to survive if they devote resources to the at-risk kids – at the expense of programs for the kids of the well-educated.

        Has virtually nothing to do with race and everything to do with class.

    • First of all, I don’t understand how this comment relates to the posting about donations. Second, I don’t see any hypocrisy in the statement by the UVa. faculty member and I do not perceive the “grand lesson” that Reed seems to have perceived. To me, she is saying (1) teachers need to discern the different talents, abilities, and ways of learning of each student and tailor his/her teaching, as much as possible, to each child and (2) educational tracking is, at least, not helpful to students, and, at worst, is harmful. One could disagree with this last assertion and there is probably research supporting both sides, but I did not feel that it was being shoved down my throat.

      • Dick – “First of all, I don’t understand how this comment relates to the posting about donations. Second, I don’t see any hypocrisy in the statement by the UVa. faculty member and I do not perceive the “grand lesson” that Reed seems to have perceived.”

        Dick, I understand and appreciate your puzzlement over seemingly disconnected comments. Expect an effort at clarification soon. Many seemingly unconnected but suspicious events have run through a number of threads that link many of the last few dozen posts on this blogs. Often, like a hunter, one must be patient before standing up in the blind. Like with ducks, sometimes its better to wait for threads and noise to play out – congregate, congeal, and prove themselves – before standing up.

        Still, in Virginia, it is remarkable later events so often prove earlier suspicions. The games Virginia politicians and special interests play run in well worn ruts woven deep over centuries into the fabric of Virginia’s political and social culture, despite the players many changing disguises and identities.

  2. Ugh. Anyone want to guess how little of the $75M destined to help first generation Wahoos will be distributed vs how much will be socked away as investment?
    I sure hope that the $100M belonging to Walentas has been hard at work prior to landing at UVA. Lot of money to pull out of GDP.

  3. It is curious to me that a conservative, libertarian leaning blog would get upset about private gifts to a university. After all, this is not public money, but money freely given by alumni and other patrons of the university. In such a case, if the donors did not specifically stipulate how their donations were to be used, the university has the right to use them in anyway it chooses. (So what if those professors hired with this money do more research than teaching? It is not tax money and the research they do may benefit the university and, in turn, Virginia residents.) The university’s strategic plan is its guide to the donors how the funds will be used. In many cases, these donations will decrease the need for public, taxpayer funds, e.g. financial assistance, development of a School of Data Science, etc.

    If some alumni do not agree with the direction of the university or with the uses their donations will be put to (the strategic plan), they do not have to give a dime.

    A major drawback of donations and endowments is that the rich get richer. I agree that a big chunk of that money being raised by UVa. could probably have been of greater marginal value if given to Norfolk State or Virginia State (although both those institutions have had their problems managing the public funds they do get). In fact, any of the other smaller, overlooked sister schools of UVa., such as Longwood, Radford, Mary Washington, and UVa. Wise, need the money more than UVa.

    Another potential danger with donations is that the donors may expect, and receive, disproportionate influence over the policies of these public higher ed institutions (see Koch brothers, George Mason University). Presidents and Boards of Visitors must guard against such an occurrence.

    Finally, in case there is any misunderstanding, I agree that higher ed financing and accounting is awfully opaque and more transparency is needed.

    • Dick, I have never disputed the right of individuals to donate their money to whomever they want. I hope that’s clear. I do suggest that conservatives and libertarians might want to re-think their donations to UVa, considering the uses to which that money will be put. And I make the observation that, for all the jaw-jaw about “equity,” tax subsidies for contributions and endowments are being used to benefit administrators, elite faculty, and student bodies that are disproportionately affluent.

      • Jim says, “contributions and endowments are being used to benefit administrators, elite faculty, and student bodies that are disproportionately affluent.”

        Jim’s comment is key, an exceedingly important comment.

        So is Dick’s as to vast disparity between institutions, the rich getting vastly richer, while those who really need help that could make a vast difference for kids in really in need, are too often forgotten, or ignored altogether.

        Obviously a lot vanity is at play in giving to elite universities. For instance, showing your peers who has greater virtue and money. Surely also as to elite research universities there are lots of quid pro quo exchanged, including those seeking to gain favor on university research in numerous ways, however implicit and unstated. We would be foolish to think otherwise.

        Plus there is giving by those seeking favored treatment by elite universities on admissions decisions for their kids advantage for this year or in the future.

  4. @Dick Hall-Sizemore, my frustration with UVA all pivots around its failure to stick to its original mission to proved an affordable, excellent education for the citizens of Virginia. I note that the mission has been revised to back into strategic plan: “It serves the Commonwealth of Virginia, the
    nation, and the world by developing responsible citizen leaders and professionals; advancing, preserving, and disseminating knowledge; and providing world-class patient care.” As alum, it is grand to be degreed by an institution with world class something, but chasing these aspirations creates a bottomless bucket of funding appetite and nary a metric by which success can be measured. How will we know if $5B was enough, if $100M made an impact, and will UVA come to General Assembly with hand extended for a raise? Are we graduating students who are better off than when they arrived? If you haven’t actually listened to the Gladwell piece, please do http://revisionisthistory.com/episodes/06-my-little-hundred-million

    • You can be assured that UVa will come to the General Assembly with its hand raised for more money. When I was at DPB, it was a saying that higher ed is never satisfied.

      As for the “original mission” of UVa., a lot of us always understood that Thomas Jefferson founded UVa because his kids couldn’t get into William and Mary.

      Regarding the Gladwell podcast, I am not a podcast person. But because you and Jim have so highly recommended it and my daughter has in the past commented that she thought I would enjoy Gladwell, I will probably get it a shot.

    • OK–listened to it. I agree with most of his points. In fact, “the rich get richer” was one of problems I noted about donations.

      As admirable as Harry Rowan’s gift to Glasboro State College was, I have to differ with Gladwell on that being sort of revolutionary in philanthropy. there are two other, earlier incidences (that I know of) of rich guys giving to “weak link” institutions:

      1. In 1925 and later on his death, J.B. Duke set up an endowment of $107 million (about $1.5 billion in today’s money) primarily to support four colleges: Trinity College (now Duke University), Furman College, Davidson College, and Johnson C. Smith University. Trinity College (Duke) got the most. All four institutions, as well as several charitable organizations, are still benefiting from the Duke Endowment.
      2. In 1969, the finances of the University of Richmond were at such a low point that the trustees were considering either closing the institution or turning it over to the state. Enter E. Claiborne Robins, Sr. with a gift of $50 million, the largest single gift to an institution of higher ed up to that time.

  5. Thanks for your willingness to listen, I found it a very good articulation of my poorly defined sense of misgiving about universities with gigantic endowments, gigantic capital campaigns, and gigantic spending. @Dick Sizemore-Hall, certainly there are other examples of weak-link givers, I think Gladwell had to pick one to make the case. An undersung and exciting gift I recall is Helen Dragas giving $1.5M in 2008, divided among 3 MUNICIPALITIES(!) targeted to improving their homelessness programs (rather than buildings). No one does that. For me, the most profound moment was when the Stanford pres admitted that there was amount that he would turn away as too much, unnecessary.
    One of the great ways the US stands apart from other countries is its private sector provides support in areas which, in other nations, are supported by tax dollars run through state bureaucracies. We rely (largely) on philanthropy to sustain our arts, many human services, to preserve our historical institutions. In exchange, we cede control over how giving is allocated. There are highly paid development/advancement professionals whose job it is to shepherd the gifts toward need. I don’t give a FF what Harvard (private) does with its fortune, but I do care what public universities do with donor dollars as an accompaniment to vast taxpayer support. I have trouble understanding why UVA can’t let VT be the commonwealth’s premier engineering school, and why VT can’t let UVA be the premier liberal arts u. And why UVA wants to compete with Harvard.

  6. Lift – Your commentary above is excellent. Its last sentence, both comment and question, hits a big nail squarely on its head:

    “I have trouble understanding why UVA can’t let VT be the commonwealth’s premier engineering school, and why VT can’t let UVA be the premier liberal arts u. And why UVA wants to compete with Harvard?”

    The answer is that the administrators, senior faculty, and their allies in private industry, who run UVA, are far more concerned about using UVA to enrich themselves, and to use UVA to increase their own status, than they are in teaching students, especially undergraduate students. Teaching undergraduate students they find far too demeaning and unprofitable for themselves, particularly so long as they can successfully divert UVA’s undergraduate tuition to directly benefit themselves, instead of using those funds to benefit undergraduates and their families who pay the bills.

    We have explained this UVA strategy and its tactics time and again on this blog. Its truth is beyond dispute. It has been plain to see since Rector Dragas in June, 2012 made public Teresa Sullivan’s Memo to her dated May 3th, 2012. This famous memo outlined Sullivan’s vision for UVA’s future, one that Sullivan successfully implemented in all its major parts. Therein, back in early May, 2012 Sullivan made plain her by then ongoing strategy and tactics, and her intent to continue that strategy and tactics, namely:

    1. Focus most all her energies on driving up UVA’s ratings (defined by USN&WR)

    2. Accomplish item 1 above by doing away with most all undergraduate 1s and 2 year courses, particularly undergraduate foundational survey courses that were critical to teaching the humanities at UVA, and

    3. As item 2 was accomplished, Sullivan would replace these terminated undergraduate survey courses with STEM courses, and other advanced courses, that were taught to undergraduates by mostly graduate and post doc students, and adjunct professors, in lieu of tenure, and tenure track professors. And thus:

    4. As item 3 was accomplished, UVA would free up UVA’s tenured professors from teaching undergraduate students to almost exclusively doing their own research so as to keep those professors happy, and so as to given them the opportunity to make money for themselves and for UVA administrators, and UVA business allies, off of that research.

    All this of course would result in a massive explosion of costs to the university, so as to to enrich administrators and select faculty despite the exploding costs of these research programs that would paid by and spread onto others, including undergraduates and their parents.

    All this is made expressly clear in Sullivan’s May 3rd 2o12 memo to Dragas.

    • Bingo. The problem can be categorized as “arms race/inmates running the asylum/cat chasing its tail.” Let me point out that here is nothing nefarious in these strategic plans or the ambitions of higher ed administrators, they are grand, inspirational and natural inclinations. But unchecked, there is no limit to the escalation. We must ask these institutions: why do you exist, who is your primary constituency, and how do keep them at the center of your mission? This is why Boards of Visitors matter in Virginia; they are the last defense as a filter for the aspirations of every administrator who wants to more funding, a better reputation, and perhaps a stepping stone to an even better institution of HE.
      Has anyone read Ryan’s strategic plan? Yikes.

  7. Lift –

    I agree with this comment and your questions that follow it, namely:

    “Let me point out that here is nothing nefarious in these strategic plans or the ambitions of higher ed administrators, they are grand, inspirational and natural inclinations. But unchecked, there is no limit to the escalation …”

    If my comments often appear to the contrary, it is because the questions you ask are never asked publicly by those in power power, responsibility, and obligation. And if asked, they are never seriously answered with facts, proofs, or hint of transparency by those running these public institutions with deep obligations to students, their parents, taxpayers, and American society generally.

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