Confusion surrounds recent exchange of financial data

In the weeks preceding October Break—following a flurry of conflicting economic statistics disseminated from different arenas of the College community—a shared sense of confusion, if not at times hostility, spread across campus. Beginning with "VC Money Facts," a letter written by Professor of English Donald Foster, select members of the faculty and administration began a somewhat public, back-and-forth debate on the true financial health of the College, leaving many unable to sort the accurate from the misleading and the facts from the falsehoods.

Though "VC Money Facts"—which dealt mainly with issues of Annual Fund giving and senior officer compensation—was written on Sept. 14, it was not until the Sept. 30 announcement of 13 staff position eliminations that the letter suddenly became a campus talking point. That week, paper copies of parts of the letter were placed anonymously in mailboxes, and the electronic version was forwarded like chain mail to and from the inboxes of students, faculty and staff.

Soon after, a response to Foster's document—written on Sept. 25 by Dean of Planning and Academic Affairs Rachel Kitzinger and Vice President for Finance and Administration Elizabeth Eismeier—was sent to Foster, the Priorities and Planning Committee, the Advisory Group on the Allocation of Faculty Resources and the Vassar Student Association (VSA) Executive Board. In the letter, Kitzinger and Eismeier point out areas where, they wrote, "we believe further information is necessary to judge the accuracy of [Foster's] statements."

Following this letter, Foster sent out three more of his own—two on Oct. 5 and one on Oct. 7; all three gave similar statistics on giving and compensation, though none addressed the issues raised in the Kitzinger-Eismeier document.

Amidst these conflicting accounts, the sense of confusion began to make its spread across campus. "I've been hearing two stories," said VSA Ferry House Representative Briana Markoff '11 at an Oct. 8 open meeting in the ALANA Center. Attendees of this meeting would soon after form the Campus Solidarity Working Group, a faction of students, faculty and staff advocating primarily for Vassar job security. "One," continued Markoff, "is that the College is in good financial health and that we're doing just fine. I've heard another story that says that's not true. I need to know."

Anastasia Hardin '10 echoed Markoff, saying, "We need transparency and more information. One thing that we all share in common is that we're getting mixed messages and we don't have clear information," she said. "We need more clear information."
Almost a week later, on Oct. 14, the Working Group held a demonstration outside Main Building to present their List of Demands, which advocates for the suspension of all further position eliminations and for "those who have lost their positions during this academic year [to] be reinstated immediately or be given jobs at the College with equal pay."

At the start of the demonstration, the confusion expressed a week earlier by Markoff and Hardin escalated to distrust and suspicion when Cathy Bradford—All Campus Dining Center Chef's Helper and Steward for the Service Employees International Union (SEIU) Local 200 United—shouted to a cheering crowd, "Cathy Hill, I would like to say to you, ‘Stop the lying,'" in reference to President of the College Catharine Bond Hill. In a later interview, when asked what was meant by her statement at the rally, Bradford explained that she was referring to "finances, losses and cuts."

"Everything [Hill] is putting out there is not adding up," continued Bradford, "and then I'm hearing from the professors that she keeps lying about this and keeps lying about that. I've heard from one of the professors, [Donald] Foster, that basically everything she's putting out there is a lie," said Bradford, explaining that such was the impression left on her from reading his letters. Though Foster made no such accusation in his letters or e-mails, many in addition to Bradford gathered from his writings that the College was in dire economic straits.

Performance in Giving

Though Foster's first letters touched on a variety of topics—such as endowment growth, financial aid, faculty research and what he called "extraordinary expenses"—his two points of concentration were on giving and senior officer compensation. For both of these issues, Foster gathered his data from the publicly accessible Internal Revenue Service (IRS) Form 990, "Return of Organization Exempt From Income Tax," a form submitted each year by non-profit organizations, including colleges and universities.

In "VC Money Facts," to compare giving—or financial donations—across the last two administrations, Foster presented two juxtaposed tables; one is labeled "Fergusson Administration"—in reference to Vassar's ninth President, Frances D. Fergusson—and the other is labeled "Hill Administration." From line 1b of the Form 990, Foster gathers that when comparing 2005-2006—Fergusson's last year as President—to 2007-2008—Hill's first—private giving has decreased by 46.6 percent. "Giving has completely collapsed," said Foster in a later interview.

Though Hill's first year did show a great loss in giving when compared to Fergusson's last, some argued that it was unfair to use a president's final year as a point of comparison, since, as Kitzinger and Eismeier wrote in their letter, "many alumnae/i and others showed their deep appreciation for her long service by extraordinary giving to the College."

Foster, however, argued that a President's first year gives even greater grounds for extraordinary giving. "You can go look at other colleges. We've had about 17 colleges in our group that have had new presidents, and I only found one other president in that group that had a decline in their first year. That's what president's do—they go out and raise money."

Ultimately, however, when the scale of time is lengthened and when Vassar's giving is compared to that of its peers, it becomes clear that, as Director of Institutional Research David Davis-Van Atta explained, "our problem doesn't appear to be in our development area."

Davis Van-Atta—who grapples with such data and data sources daily—referenced a graph shown at PowerPoint presentation for faculty on Monday, Oct. 12. The figure—shown above—is titled "Total Private Support: Vassar College and Two Reference Group Means" and shows private giving at Vassar from 1983 to 2009, as well as the average private giving of Vassar's 21 Primary Reference Schools and the Consortium on Financing Higher Education (COFHE) schools, which include peers such as Amherst, Carleton and Williams Colleges.

Davis-Van Atta compiled the Total Private Support graph for the presentation with information provided to him by the Development Office; "These are the best data that we could possibly use to measure our development function," said Davis-Van Atta, "because they're accounted according to the way that the development profession has set up national standards for accounting total private support. There's no double counting from one year to the next and it counts the right stuff," he said, explaining that the figures included private gifts and pledges, but not gifts-in-kind, which are the donations of objects—like artwork—or services rather than money.

"Another way to think of it," continued Davis Van-Atta," is that [Vice President for Development] Cathy Baer would never think of going to the Form 990 to find out how her office is doing. She knows—and she knows how each one of our peer schools is doing—because there's a very active data exchange among them that's according to a set of national standards that everybody does and everybody does overtime. That's why [this graph] is the best data. If you look at that, it's pretty difficult to come to the conclusion that Vassar has gone to the dogs with giving."

When giving is graphed overtime—as with the Total Private Support graph—fluctuations across one college's data set are expected, as often pledges are promised over several years, and major capital campaigns will cause a steep increase in giving. Vassar has been in what is called the preparatory—or "silent"—phase of its upcoming Comprehensive Campaign since 2005; the peak of the campaign will coincide with the sesquicentennial anniversary of the College in 2011.

In their letter, Kitzinger and Eismeier also gave a preliminary figure for 2008-2009 giving of $44.781 million. "The problem is," said Foster, "this figure includes pledges. It's a complete lie, and I caught her on it [at the Faculty Meeting on Wednesday, Oct. 14]. Cappy thought she was going to get away with that, because who's going to check her on it?" Foster explained that without pledges, the figure for actual giving would lie at $33.7 million.

"They put this out for the entire faculty to see, so they say ‘oh wow, Cappy's really going to town,'" continued Foster. "We're not going to town. We're back down to 1999, and we're in the fourth year of a capital campaign. They're being deceitful. They know that that is not true. I mean, I can pledge $50 million to Vassar—it doesn't mean they're going to get it. I have a very hard time not screaming, saying ‘They're lying to us.'"

Controller Donald Barton, however, explained that pledges "are always included in our total gift numbers on the financial statements," Barton said, referencing Part 1, line 1b of the Form 990. Davis-Van Atta, agreed, explaining that pledges are "not vapor money or smoke and mirrors." "We get our pledges—that's not an issue," he said.

Senior Officer Compensation

Aside from giving, Foster also researched compensation for the College's senior officers as they are reported on the Form 990; "Since July 1, 2006, even as giving has declined," Foster wrote in "VC Money Facts," "there has been an explosive increase in the budget for compensation paid to Vassar's senior officers." Comparing again 2005-2006 to 2007-2008, Foster explains that from line 25 on the Form 990 it is apparent that the senior officer budget has risen by 81.9 percent.

At the open forum hosted by senior officers on Oct. 6—and in the letter by Kitzinger and Eismeier—it was explained that individual colleges complete this line on the Form 990 differently, a point that Foster acknowledged in his Oct. 7 letter.

"In some instances at least," said Professor of Political Science Peter Stillman, who sent a response to Foster's letters to the faculty on Oct. 19, "I know that they are self-reported data where colleges have some discretion in choosing what they report or in what categories they report it."

Stillman continued, saying, "Foster accurately copied what Bates College and what Vassar pay their senior officers; but all you need do is to read the fifty or so pages of the Form 990 to discover that Bates included two senior officers, Vassar ten or more. There is variation in self-reporting, and so the numbers that Foster accurately copied are not consistent between Bates and Vassar and, in themselves, say nothing about who pays senior officers in the administration more."

Foster, however, explained that the 81.9 percent increase in reported figures for Vassar alone still indicated an increase in the overall budget for the College's senior officers. "This is the budget for our officers. We keep adding positions and things keep adding up," he said.

Much of the rise in figures reported for the senior officers' budget from 2005-2006 to 2007-2008 is accounted for by the addition of the Dean of Planning and Academic Affairs, as well as three factors that were merely not reported on the 2005-2006 form: the salary of the Controller, the cost of benefits for the reported group of senior officers and payments made to former senior officers. If one were to compare consistent figures over this two-year period, there would be a 6.3 percent increase in salary for the eight senior officers reported on the 2005-2006 form. Professor of Economics Paul Ruud explained that upon reading Foster's letters—and this administrative information in particular—he did some of his own research using another public data set called the Integrated Postsecondary Education Data System (IPEDS), a system of interrelated surveys conducted annually by the U.S. Department's National Center for Education Statistics.

"[This figure] depends on what you mean by ‘overall budget'—the overall budget is a fungible concept," said Ruud. "You can go to this IPEDS data set, and they have an ‘administrative category,' which is wider than just senior officers, and if you look at the behavior of our adminsitrative expenses—as a percentage of overall expenses—Vassar comes in pretty constantly at 19 to 20 percent year after year."
"It just doesn't move that much in this IPEDS data set," continued Ruud. "There's nothing like an 81.9 percent increase in what would be called ‘administrative expensives.' You don't see this kind of jump."

Faculty Responses

Like Ruud, many members of the faculty who have witnessed this recent exchange of e-mails have undertaken their own research or offered their own commentary on the discussion. Stillman's letter approaches Foster's material by posing five main questions in addition to a series of secondary questions in the last few paragraphs of the e-mail.
"I have some ideas about how I, or anyone, can and should be a thoughtful, skeptical and critical reader of the facts and interpretations that Don Foster has presented," wrote Stillman in his letter. "These ideas are, I think, manifestations, extensions and examples of the kind of critical thinking that we engage in as members of the Vassar faculty and undertake to educate our students to practice."

In a later interview, Stillman explained that he "was and am pretty certain that Foster's data did not support his conclusions, and especially do not support what many take to be the implications of his conclusions. I also think that the roots of Vassar's financial problems lie elsewhere than where he indicates, and so from my point of view he was leading Vassar and the discussion at Vassar down the wrong paths," Stillman said.

"I wrote the letter as a set of questions," he continued, "because I do not claim to know all the answers, or indeed to know all the questions. I am hoping to incite others to ask questions—questions of all the documents that have appeared, including mine—so that we at Vassar can have a discussion where erroneous or misleading information is at a minimum."

Some of the questions posed in Stillman's letter include the following: Does Foster present "his data in as much detail and specificity as is known and as is needed, or [are] the data chosen selectively or grouped selectively to serve the purposes of the presenter"?; "What is the motivation and purpose of Don Foster's rhetoric? Is his rhetoric believable, or doth he protest too much? Why does he utilize (or, perhaps, why does he seem to need) such extensive self-legitimating rhetoric? And, indeed, to what extent are his rhetorical statements true, and to what extent are they the opposite of the truth? To what extent do they enlighten or mislead?"

Above all, Stillman wishes that Foster do "what he has promised, which is to respond to the Kitzinger-Eismeier letter," said Stillman. "I would of course like to see him answer the questions that I raise."

Foster is in the process of drafting a response to the letter from Kitzinger and Eismeier—to date, he has addressed it most thoroughly in his Oct. 10 e-mail to faculty, in which he responds to Kitzinger and Eismeier's statement, "we encourage members of the Vassar community to ‘go to the source' and draw their own conclusions."

"Personally," said Stillman, "I suspect that Foster does not have compelling and convincing responses to the major points of the Kitzinger-Eismeier letter, but until I see his responses I cannot know."

Visiting Associate Professor of English Karen Robertson explained that in the last month the College has seen a growing dialogue around issues about which community members were once silent. "We're finally talking about this," Robertson said. "I think that the effect of the financial crisis at first was to produce a scared silence, because it all sounded so dire."
Robertson—a member of the Campus Solidarity Working Group—explained that her concerns are not so much annual giving or senior officer compensation, but rather "academic freedom, how we define the Vassar community and questions of free speech."

Robertson noted that although at times it seems as if all are engaged in the same debate, many community members share entirely different concerns. "Because there have been so many changes and so many arguments presented that are fractured and scattered, we're sort of forced to talk about many different areas, and we're all working in different arenas to bring to light the consequences of massive changes that are happening globally," said Robertson. "It's very difficult, but it's multi-pronged because the changes have been so multiple. I think that we'll probably move toward a coherent set of principles eventually."

More recently, on Oct. 26, four other professors sent a joint e-mail message to the rest of the faculty. The letter—signed by Professor of French Elisabeth Arlyck, Professor of History Rebecca Edwards, Professor of Film Sarah Kozloff and Professor of Biology Kathleen Susman—urges faculty to consider carefully how they involve students in the debate surrounding the financial crisis.

"While students have a clear role to play in this process," the professors wrote, "we must avoid the temptation to recruit students to serve our own causes. We feel that, regardless of one's motives, involving students in this manner is a break of our responsibilities to them, and to the spirit of our community."

In regards to the spread of financial data, the professors ask that "students who do wish to participate in the conversation about budget cuts have access to complete information. If data are contested, they need to understand the entire dialogue so they can (as Peter Stillman noted in his letter), exercise the skills they came here to learn, evaluate the information they are receiving and judge for themselves."

Data Complexity and the Form 990

Much of the confusion over the statistics referred to by Arlyck, Edwards, Kozloff and Susman comes from the complexity of the data iteslf. For Dean of Freshmen and Professor of Mathmatics Benjamin Lotto, "these statistics can't exist in a vaccuum—they need to be explanatory to be meaningful." After reading Foster's findings on comparitive endowment growth in particular, Lotto was inspired to do his own research on the particular subject.

Ultimately, Lotto found that when using only public data, it was difficult to effectively compare schools' endowments, given that each is a resevoir of funds affected by three separate entities—giving, investment returns and spending. Because public data—taken from the Form 990 or IPEDS data—only gives raw endowment values and does not breakdown into these three functions, it's difficult to accurately assess why one school's endowment is, say, higher than another's. "Straight endowment breaks down into three pieces," said Lotto. "So, are we spending more? Were our investment returns worse? Was funraising better? There's no way to tell from [these raw numbers.] Fundraising, for example, is affected by capital campaigns. We don't know when other schools had their campaigns. You don't know what you're comparing."

Aside from the general complexity of financial statistics like those such as endowment factors, much of the confusion has come from the fact that data have largely been cited from the IRS Form 990. "I don't know the Form 990," said Davis-Van Atta, "and there's a reason I don't know the Form 990. No one in my profession would ever think of using the 990 as a data source. It is not research-grade data, and it really from changes year to year—the IRS changes the rules on how they want to see things accounted."

Davis-Van Atta continued, explaining that the form is not meant to be used as a data source for the public or for those in higher education; "The form is made for IRS purposes, chiefly surrounding tax matters—that's their first and foremost concern. It's not comparable across schools at all," he said.

Ruud agreed, saying "The basic source of 990 data is accounting data, and the limitations of accounting data are such that you can't easily make comparisons across schools. Comparisons won't be accessible, they won't be direct and they won't be as informative as you might like."

Davis-Van Atta cited the uniformly submitted Form 1040 as an example of the nature of accounting forms as data sources. "If you wanted to know me, would you go try to find my 1040? And what I turned in on my 1040 ten years ago—is that really comparable? Can you really tell? Can you really look at trends? ‘No' is the answer to those questions. The Form 990 is not comparable across insitutions, and it's not comparable across a given institution over time."

"What's cool about the 990—and what tends to attract people to the 990—is that individual salaries are reported there," he continued. "People see that and they think ‘wow'—well, they should come talk to me first, and I wish that that would happen. If an Office of Institutional Research had been here for some time, I think we'd be in a better situation than we are in," Davis-Van Atta explained.

Role of Institutional Research

The Office of Institutional Research has in fact been at Vassar for a very short time—only since Oct. 1, 2007, after Hill hired Davis-Van Atta, who left Carleton College for the position. Since then, Davis-Van Atta has been working to establish a common set of accessible and unbiased data about the College.

"We should, if at all possible, have a common set of facts that we all work from, and that is one of the principle reasons that Institutional Research exists," noted Davis-Van Atta. "Institutional Research is not here to sing someone else's song. I'm not here to back up whatever President Hill says or be a mouthpiece for an administrative position. That is not what I'm here for, and it's not what anyone wants me to do and it's not what I'm going to do. Institutional Research lives and dies by integrity and by unbiased viewpoints on data."

One of the first things Davis-Van Atta did when the Office was created was to standardize the group of aforementioned 21 Primary Reference Schools. "The College was rife with different comparison groups that were being used in different offices—there was nothing standardized, so this is one of the things I worked on until last spring," he said. One change made to the final reference group was that Dartmouth College—which was used in several peer groups—was removed from the final version. "Dartmouth is not a good peer to Vassar on any number of key statistics, and whose much larger size in students, admissions, budgets, graduate programs, federal grant support would cause severely distorting effects in a variety of essential comparative studies," wrote Davis-Van Atta in the report that was released upon the change.

Davis-Van Atta explained that he wished more people knew about and used his Office, and he expressed regret that he didn't play a larger, clarifying role in much of the debate that was occuring between Foster and other faculty. Just recently, Davis-Van Atta finished compiling the "Vassar Factbook," which was presented to the Board of Trustees during their visit to campus from Oct. 16 to 18. The Factbook contained tables and graphs and sets of data on all areas of the College from students, to admissions, to giving, to compensation.

When asked what—after essentially inspecting the insides of the entire College—he believed was the main issue at hand with the financial health of the College, Davis Van-Atta responded by saying, "We have an issue with endowment." "That's a really important thing right now," he continued. "We had an era when we were at least with our peers and a bit above, and then it crossed around 2000, and we have never caught up since. This gap has steadily grown. It's not a good trend." Stillman echoed Davis-Van Atta's sentiments, saying that Vassar's endowment—and especially its endowment per student—has not been "sufficient for Vassar to do all the things that it wants to do," said Stillman.

Endowment growth was also a major point in Foster's "VC Money Facts," which stated that "thanks to generous giving, government largesse, tax-free earnings and generally competent financial management, Vassar's endowment has indeed grown—until the 2006-2007 academic year—but it did not grow enough, even before the crash of 2009, to sustain escalating expenses and yet fully remain competitive."

Davis-Van Atta explained that endowment performance has been a long-term problem and that "whatever happened didn't happen in the last two or three years. People should know that. It's not a problem with the new administration or with the old administration. Getting into finger pointing is a really bad idea—but understanding the fact that this exists is a good idea."

"There are three things that affect an endowment—new money, investment return and spending the endowment—so if we pick apart the three parts," said Davis-Van Atta, "we can see it's not giving and it's not investment return, it's spending." While gifts to the endowment have remained consistent, and while investment returns havefallen in line with our peers—as pictured in the "Endowment Annual Investment Returns History" graph above—the draw from our endowment has for years remained above that of other colleges. While the figure for endowment draw for 2009-10 is not yet confirmed, it will almost surely be above 7.0 percent. That said, after the 2009-10 year, the projected budgets for mulptiple scenarios are designed to bring Vassar's spending rate back to a sustainable 5 to 5.5 percent.

"For Vassar," continued Davis-Van Atta, "our chief poblem is that for a long time we've gotten used to spending rates on the endowment that are at levels that are so high that we just can't maintain them. We just have to spend less, and that right there is the real issue."