Tulane University losing $15-$20 million a year

[tpstulane]

Cowen leaving Fitts with a budget nightmare
http://www.nola.com/education/index.ssf ... cart_river

Tulane University has hired the Huron Education consulting firm to increase university revenues, develop a new budgeting system and cut the school's annual deficit of $15-20 million, according to an announcement by university President Michael Fitts.

In a message to the Tulane community, posted Jan. 13 on a new website dedicated to the restructuring effort, Fitts wrote that the decision to hire Huron "underscores our commitment to being good stewards of the university's resources and ensures that we are using them wisely." Tulane's endowment ranks far below that of its peer universities. To help redesign the school's budget model, Fitts has appointed two internal steering committees, one tasked with operational review, the other with budgetary review.

[jonathanjoseph]

Cowen leaving Fitts with a budget nightmare
http://www.nola.com/education/index.ssf ... cart_river

Tulane University has hired the Huron Education consulting firm to increase university revenues, develop a new budgeting system and cut the school's annual deficit of $15-20 million, according to an announcement by university President Michael Fitts.

In a message to the Tulane community, posted Jan. 13 on a new website dedicated to the restructuring effort, Fitts wrote that the decision to hire Huron "underscores our commitment to being good stewards of the university's resources and ensures that we are using them wisely."

What a freakin joke. They hired a consultancy to help them figure out how to "increase revenues"?!??! How about cutting costs? Tulane University still circling the drain, and Scott Cowen still getting paid $1M/year to go on vacation.

Hiring consultants is short hand for "we want to be able to blame someone else for this mess that we aren't going to fix".

[jonathanjoseph]

LOL from a quick look at the Huron website:

More than a dozen higher education leaders joined a recent roundtable discussion convened by Huron Education to talk about technological innovation and other trends affecting higher education. Six key topics emerged that illustrate the complexities facing institutions, including tuition pricing, the roles and expectation of faculty, inculcating an innovative mindset at universities, and the state of “denial” on many campuses about the speed and size of change that is likely to buffet higher education.

[JerseyWave]

If Tulane made an effort 15 years ago to get into a BCS conference, the Athletic Department would be $20 million in the green and able to feed money into the general university budget.

[mbawavefan12]

Cowen leaving Fitts with a budget nightmare
http://www.nola.com/education/index.ssf ... cart_river

Tulane University has hired the Huron Education consulting firm to increase university revenues, develop a new budgeting system and cut the school's annual deficit of $15-20 million, according to an announcement by university President Michael Fitts.

In a message to the Tulane community, posted Jan. 13 on a new website dedicated to the restructuring effort, Fitts wrote that the decision to hire Huron "underscores our commitment to being good stewards of the university's resources and ensures that we are using them wisely." Tulane's endowment ranks far below that of its peer universities. To help redesign the school's budget model, Fitts has appointed two internal steering committees, one tasked with operational review, the other with budgetary review.

Yet Cowen was just recognized as one of 8 great leaders in Louisiana, no media calls him out and they name the front of Gibson after him. Making me crazy.

The big question is whether the solution is investment, austerity or a hybrid model. Just cutting costs will not solve the problem IMO. You need to develop technology education options and athletics while cutting/scaling back programs that are unproductive. Certainly running the school as a liberal arts school with 60/40 ratio is not sustainable. I just don;t know how sustainable it is to have people pay $150k for a history degree at a school like TU (nothing against history degrees).

[jonathanjoseph]

If Tulane made an effort 15 years ago to get into a BCS conference, the Athletic Department would be $20 million in the green and able to feed money into the general university budget.

Instead, they said that conference realignment was like shuffling deck chairs on the Titanic and that Tulane "would be fine either way", so that we are not in a P5 is intentional and Cowen's strategic decision. Thankfully, he's taken credit for screwing this up by throwing himself parades and awarding himself a $1M/year paid vacation.

[jonathanjoseph]

Cowen leaving Fitts with a budget nightmare
http://www.nola.com/education/index.ssf ... cart_river

Tulane University has hired the Huron Education consulting firm to increase university revenues, develop a new budgeting system and cut the school's annual deficit of $15-20 million, according to an announcement by university President Michael Fitts.

In a message to the Tulane community, posted Jan. 13 on a new website dedicated to the restructuring effort, Fitts wrote that the decision to hire Huron "underscores our commitment to being good stewards of the university's resources and ensures that we are using them wisely." Tulane's endowment ranks far below that of its peer universities. To help redesign the school's budget model, Fitts has appointed two internal steering committees, one tasked with operational review, the other with budgetary review.

Yet Cowen was just recognized as one of 8 great leaders in Louisiana, no media calls him out and they name the front of Gibson after him. Making me crazy.

The big question is whether the solution is investment, austerity or a hybrid model. Just cutting costs will not solve the problem IMO. You need to develop technology education options and athletics while cutting/scaling back programs that are unproductive. Certainly running the school as a liberal arts school with 60/40 ratio is not sustainable. I just don;t know how sustainable it is to have people pay $150k for a history degree at a school like TU (nothing against history degrees).

LOL. Cowen said Tulane's technology policy was that we'd be "a fast follower" while Stanford and Harvard and MIT were all building out their technology infrastructure. So yet another strategic policy failure by Cowen. But hey, don't bother him while he's on vacation with any of this negativity.

And as the Huron people will gladly tell Fitts, it is absolutely not sustainable to have people pay $150K for a history degree (there is plenty of acknowledgement of this on their website).

[Dr. Rosenrosen]

It's not sustainable to have people pay $150K for most degrees.

But I'd really like to see what TU's endowment was in 1998.

[Dr. Rosenrosen]

According to my search it looks like the endowment was approx. $600MM in 1998 vs. 1.1B today.

Granted, there have been two market crashes since 2000 but this doesn't seem to be that impressive after factoring in contributions/additions. Am I wrong?

[jonathanjoseph]

It's not sustainable to have people pay $150K for most degrees.

But I'd really like to see what TU's endowment was in 1998.

The endowment in 1998 was $600M.

That means Tulane's endowment would probably be worth more today had the whole thing been stuck in a DJIA index fund for the past 15 years. But I bet some Cowen cronies have pocketed some nice management fees for the honor of not making a market return for the University.

[jonathanjoseph]

According to my search it looks like the endowment was approx. $600MM in 1998 vs. 1.1B today.

Granted, there have been two market crashes since 2000 but this doesn't seem to be that impressive after factoring in contributions/additions. Am I wrong?

Nope. Not impressive at all.

[jonathanjoseph]

For reference, looks like Harvard's endowment increased from about $12B in 1998 to $36B today.

http://www.hmc.harvard.edu/investment-m ... story.html

[MicMan]

Tulane's embarrassingly small endowment is rooted in the decision under Eammon Kelly's watch NOT to invest in equities, which historically earn 12% annually. Not sure when that Nobel-level brilliance was discarded. Oh yeah -- AFTER the big market runup. Consultants, reports and committees -- classic bureaucratic nonsense and faith in throwing good money after bad, which is why TU is where it is. Wait 'til the federal loan spigot is turned off, Tulane will be hosting classes by candlelight.

I hope and pray in perpetuity that some scandal is uncovered in Cowen's tenure, it may be the only way to root out the last of the bozos and shitheads that have run Tulane into the ground.

[jonathanjoseph]

Tulane's embarrassingly small endowment is rooted in the decision under Eammon Kelly's watch NOT to invest in equities, which historically earn 12% annually. Not sure when that Nobel-level brilliance was discarded. Oh yeah -- AFTER the big market runup. Consultants, reports and committees -- classic bureaucratic nonsense and faith in throwing good money after bad, which is why TU is where it is. Wait 'til the federal loan spigot is turned off, Tulane will be hosting classes by candlelight.

I hope and pray in perpetuity that some scandal is uncovered in Cowen's tenure, it may be the only way to root out the last of the bozos and shitheads that have run Tulane into the ground.

Tulane didn't have outside professional money managers in charge of the endowment until 2008. That's scandalous all by itself.

There are so many scandalous things that Scott Cowen has gotten away with to date that it blows the mind. The challenge isn't finding scandalous issues, the challenge is finding the media/alumni/stakeholders who want to do something about it rather than watch Tulane get driven deeper and deeper into the ground.

And yes, I do believe that Tulane's financial future is in serious danger.

[Dr. Rosenrosen]

I, too, think Tulane could be in deep trouble moving forward. The school is losing $15-20MM/year, is no longer ranked among the elite and the cost of attendance has risen to unsustainable levels. And that's to say nothing of Tulane's disastrous moves re: athletics and engineering/comp sci under the Cowen regime.

Maybe Fitts will be successful raising $1B and shoring up the school's finances, but it's going to be a very tall order.

[jonathanjoseph]

I, too, think Tulane could be in deep trouble moving forward. The school is losing $15-20MM/year, is no longer ranked among the elite and the cost of attendance has risen to unsustainable levels. And that's to say nothing of Tulane's disastrous moves re: athletics and engineering/comp sci under the Cowen regime.

Maybe Fitts will be successful raising $1B and shoring up the school's finances, but it's going to be a very tall order.

So the University has a negative rating from Moodys and is hemorrhaging cash even after DOUBLING tuition and this is all as an education bubble sets to burst.

Everyone and anyone else would fire the executive that put an institution in such a position. At Tulane, it earns you parades and a $1M/year paid vacation.

[Dr. Rosenrosen]

I don't understand it either. How is Cowen so revered by the Board/alumni/students?

But I think the primary reason for the deficit is that Cowen went on a building spree after Katrina (new dorms/libraries etc.) and as a result left the new regime holding the bag. Hence, a $1B fundraising campaign.

[jonathanjoseph]

I don't understand it either. How is Cowen so revered by the Board/alumni/students?

But I think the primary reason for the deficit is that Cowen went on a building spree after Katrina (new dorms/libraries etc.) and as a result left the new regime holding the bag. Hence, a $1B fundraising campaign.

I don't even think that explains it. Didn't he take on debt in order to build those buildings? Don't we also have way more debt on the balance sheet? The $1B campaign is to grow the endowment in order to get closer to our "peers".

Every single day Tulane alumni should look at themselves in the mirror and say "shame on me for what I've allowed to happen to Tulane University".

[Dr. Rosenrosen]

I'm saying the reason for the deficit might be (partially) due to the debt service after the building spree post-Katrina.

If Tulane is losing $20MM/year, it's no wonder Fitts is trying to raise $1B. Granted, growing the endowment is very, very important but Tulane needs cash.

[MicMan]

Surprised this wasn't a front page screamer. The biggest employer in the biggest city in the state admits that despite decades of accepting hundreds of millions of dollars in federal aid it's operationally insolvent, and has utterly no clue how to run its business. On Wall Street the CEO and cronies would be the target of a federal investigation, key members of the board replaced, and the corporation put on external oversight.

[jonathanjoseph]

I'm saying the reason for the deficit might be (partially) due to the debt service after the building spree post-Katrina.

If Tulane is losing $20MM/year, it's no wonder Fitts is trying to raise $1B. Granted, growing the endowment is very, very important but Tulane needs cash.

Maybe that's it, not sure. Either way, the smart universities were investing in digital assets, Cowen was investing in the physical assets that have a very uncertain value in the future, like libraries and dorms.

[jonathanjoseph]

Surprised this wasn't a front page screamer. The biggest employer in the biggest city in the state admits that despite decades of accepting hundreds of millions of dollars in federal aid it's operationally insolvent, and has utterly no clue how to run its business. On Wall Street the CEO and cronies would be the target of a federal investigation, key members of the board replaced, and the corporation put on external oversight.

Absolutely. Because this is a story that makes Cowen look like an incompetent boob, it will be swept under the table and not mentioned. Why is this the case?

[mbawavefan12]

I, too, think Tulane could be in deep trouble moving forward. The school is losing $15-20MM/year, is no longer ranked among the elite and the cost of attendance has risen to unsustainable levels. And that's to say nothing of Tulane's disastrous moves re: athletics and engineering/comp sci under the Cowen regime.

Maybe Fitts will be successful raising $1B and shoring up the school's finances, but it's going to be a very tall order.

So the University has a negative rating from Moodys and is hemorrhaging cash even after DOUBLING tuition and this is all as an education bubble sets to burst.

Everyone and anyone else would fire the executive that put an institution in such a position. At Tulane, it earns you parades and a $1M/year paid vacation.

Cowen Circle

[jonathanjoseph]

I, too, think Tulane could be in deep trouble moving forward. The school is losing $15-20MM/year, is no longer ranked among the elite and the cost of attendance has risen to unsustainable levels. And that's to say nothing of Tulane's disastrous moves re: athletics and engineering/comp sci under the Cowen regime.

Maybe Fitts will be successful raising $1B and shoring up the school's finances, but it's going to be a very tall order.

So the University has a negative rating from Moodys and is hemorrhaging cash even after DOUBLING tuition and this is all as an education bubble sets to burst.

Everyone and anyone else would fire the executive that put an institution in such a position. At Tulane, it earns you parades and a $1M/year paid vacation.

Cowen Circle

As a result of Cowen, Tulane is Circling the drain? Yes.

[Aberzombie1892]

http://tulane.edu/tef/upload/Annual-Report-2014.pdf

While we can sit around and circle jerk about the past, I think it would be more productive to look at future, and that document puts some things in perspective. For example, the med school is not sustainable as the endowment is set up now, as 31% of the endowment supported the med school this past fiscal year. Yes, I'm fully aware that Tulane started as a med school, and yes, I am aware that Tulane would lose its AAU status without the med school, but those two facts don't make the med school sustainable without serious restructuring.

To put it in perspective, the next three highest areas of support are the General University (13%), the School of Liberal Arts (12%), and the Freeman School (11%).

For giggles, Athletics was supported by 1% (tied with the School of Social work and barely beating Architecture and Public Health). Hell, the law school was supported by 6%.