Higher-education slipping, U.S. at risk, UNC chief says

By Todd Cohen

RALEIGH, N.C. —  America is shortchanging and devaluing public colleges and universities, putting the nation at risk in the global economy, the head of the University of North Carolina system says.

Americans increasingly see colleges and universities as “nothing more than factories that must demonstrate an immediate return on investment for consumers,” Tom Ross, president of the 17-campus UNC system, said in a speech to the National Public Affairs Forum of the City Club Raleigh.

But America is forgetting that the job of higher education is to prepare students to think on their own and work together, and to develop them as leaders and foster life-changing research, Ross said March 10 in the Forum’s inaugural lecture.

States are shifting costs to students and families, putting higher education out of reach for many or saddling them with debt, he said.

States also are cutting spending and losing faculty, along with their research dollars and the jobs they create, he said.

“I have come to the conclusion that America is losing her way with regard to higher education,” he said.

Eroding investment

America’s greatness is rooted in its higher education system, the best in the world, said Ross, who will step down next January after five years on the job, forced out in a move this past January by the UNC Board of Governors.

Yet enrollment is outpacing investment in higher education, which increasingly is focusing on “metrics, return on investment, and job preparation,” he said.

While America spends only two percent more on higher education in real dollars than it did 25 years ago, he said, enrollment has ballooned by over 60 percent, resulting in a 30 percent decline in spending per student.

“As a nation, we are disinvesting in higher education, and we are beginning to pay the price,” he said.

Bloomberg recently reported unemployment among college graduates had declined to 2.8 percent, he said, and it warned America was at risk of “not producing enough college graduates to meet its workforce needs.”

Falling behind

Other countries are making big investments in higher education, while the rankings of U.S. institutions decline and America’s “premier status as the place to be educated is fading,” Ross said.

What’s more, he said, the cost of higher education is rising beyond the means of many Americans.

“Growing numbers of American students can’t afford to attend college at all, and too many of those who do are burdened by significant debt,” he said. “This is a dangerous trend in my view.”

Wrong direction

In half the states, students at public universities pay more toward the cost of their education than the state does, down from only three states in which that was the case in 2000, Ross said.

“We are moving in the wrong direction,” he said. “America must educate more people if we are going to compete successfully in the global economy.”

The U.S. and North Carolina “must ensure that college remains affordable and accessibility to everyone who has the ability and desire to pursue it,” he said.

N.C. bucks trend

North Carolina, Ross said, has shown stronger support of its public universities than most other states.

In-state tuition rates for UNC campuses are in the lowest fourth among their public peer institutions in other states, with rates at many UNC campuses the lowest or next-to-lowest, he said.

As a result, he said, UNC students generally graduate with less debt than students in most other states.

Accessibility, efficiency

Keeping college affordable and accessible in the U.S. “will require renewed and sustained investment” in public systems of higher education, as well as greater operating efficiencies “without sacrificing the quality of education,” Ross said.

He said the UNC system is looking at ways to share services such as those to determine students’ residency and handle financial aid and audits. It also is looking at ways to conserve energy; streamline academics and operations; provide college e-purchasing; and make information-technology more efficient.

The UNC system, which employs 60,000 people — more than any private enterprise in the state — has eliminated hundreds of positions, and is producing 18 percent more graduates than it did five years ago while spending 15 percent less per degree, adjusting for inflation, Ross said.

“Very few businesses can boast that kind of increase in production along with that level of cost reduction,” he said.

Yet while the UNC system always can become more efficient, he said, an ongoing concern is that greater efficiency could “begin to erode the excellence” of educational opportunities campuses offer.

Spending cuts

In his four years as UNC system president, Ross said, he has managed continuing budget cuts, including $400 million in 2011, the largest cut in UNC’s history, and faces more cuts in the budget proposed this year by Gov. Pat McCrory.

With few exceptions, he said, UNC system faculty and staff have had only two salary increases, averaging about 1.5 percent, in the last six years.

“Without great faculty, you cannot be a great university,” he said.

And in their exodus to private industry and other institutions, he said, faculty often take federal research funds with them.

“This is a dangerous trend for North Carolina and one we must address,” he said.

Research dollars

While industry in the U.S. historically conducted its own research and development, Ross said, universities now account for roughly 75 percent of research in the U.S.

Public and private universities in North Carolina generate over $2 billion in research grants and contracts a year, including $1.2 billion at UNC campuses.

Those grants and contracts support over 22,000 jobs throughout the state and, over the past 10 years, have generated more than 135 spin-off companies, Ross said.

North Carolina State University alone has over 700 corporate partners, he said.

While research may be important to business, Ross said, it is even more important as a teaching tool.

“We must help people understand that today research is an integral part of teaching at both the undergraduate and graduate levels,” he said. “At its core, research is another form of hands-on learning.”

Economic impact

The UNC system enrolls 220,000 students from all 100 North Carolina counties, nearly all 50 states and numerous foreign countries, and operates with an annual budget just over $9 billion, including $2.3 billion from the state, making it the 11th-largest industry in North Carolina, Ross said.

A recent study found the UNC system creates $27.9 billion of added economic value for the state’s economy, he said, representing 6.4 percent of the state’s annual gross domestic product, or the equivalent of creating 426,000 new jobs.

Shortage of teachers

The UNC system has a responsibility to help prepare teachers for North Carolina’s schools, which face a “looming crisis” in the pool of teachers, Ross said.

Enrollment in UNC schools of education fell 12 percent last year and has plunged 27 percent over the past five years, he said.

At the same time, the state is losing veteran teachers “at an alarming rate,” he said.

“This is a recipe for disaster,” he said. “We must find effective ways to attract the best and brightest into teaching, and retain them once we invest in training them.”

Valuing higher education

The value of higher education “is not fully measured by one’s job title or earnings level,” Ross said. “Higher education has value beyond the individuals who participate in it that extends to the public at large.”

The U.S. must reverse its 25-year trend and “begin investing again in our public universities, in their faculties and students, in teaching and learning, and in research and discovery,” he said.

“I am convinced that if we increase educational attainment in North Carolina, we will have fewer people in poverty, there will be less demand for social services, fewer people will end up in our correctional system, more people will  have better health outcomes, and we will have stronger communities with more civically engaged residents,” he said. “Education is the great equalizer. It is the pathway to opportunity.”

Raising awareness

Efforts to educate policymakers about the “importance of education to the fabric of our society” must be aggressive, Ross said.

Higher education, both public and private, has driven the U.S. economy to become the strongest in the world, he said.

Higher education will prepare America’s business and community leaders, he said, to “produce the talent we need to win the economic competition we face globally,” and “preserve and protect our democracy.”

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With incentives, UNC fundraising chief’s pay could rival chancellor’s

By Todd Cohen

CHAPEL HILL, N.C. — Thanks to a deal proposed by Chancellor Carol Folt and approved this summer by the board of trustees, annual pay for David Routh, the incoming fundraising chief at the University of North Carolina at Chapel Hill, could total $494,000, or only $26,000 less than Folt’s own salary.

The annual salary for Routh, who was named Thursday and begins his job October 14 as vice chancellor for development, will total $395,000.

And if he meets goals Folt sets, Routh also could get incentive pay totaling up to 25 percent of his base pay, or nearly $99,000, bringing his annual pay to nearly $494,000.

Folt’s annual salary is $520,000, compared to $432,600 for her predecessor, Holden Thorp, UNC says.

The stakes are high for both Folt and Routh: A comprehensive fundraising campaign at UNC-CH that at one time was expected to total $3 billion has been on hold for years.

Plans to launch the campaign initially were delayed by the collapse of the economy five years ago.

They were delayed again in the spring of 2012 by the board of trustees, which reportedly rejected plans for the campaign submitted by Thorp and Matt Kupec, the former vice chancellor for advancement, saying the plans needed more work.

This summer, during the search for the new vice chancellor, the UNC-CH board of trustees approved a proposal by Folt to provide the incentive pay.

That move prompted speculation that Folt, former interim president at Dartmouth who became UNC chancellor on July 1, was courting a candidate who already was paid $500,000 or more, or wanted to be paid that amount.

Routh, a 1982 graduate of UNC-CH, has been serving as managing director for U.S. Trust/Bank of America Private Wealth Management in Raleigh and is a former director of gift planning at the university.

Thorp resigned in September 2012 in the face of a scandal involving Kupec, who had resigned days earlier after 21 years as the school’s fundraising chief.

Kupec’s annual salary totaled $349,800, UNC says.

The annual salary for Julia Sprunt Grumbles, a former corporate vice president at Turner Broadcasting who served for a year as interim vice chancellor for advancement before stepping down in early September, was $295,000.

Thorp named Grumbles to the post after he resigned but before he stepped down in June. He now is provost at Washington University in St. Louis.

UNC-CH names David Routh vice chancellor for development

By Todd Cohen

CHAPEL HILL, N.C. — David Routh, managing director for U.S. Trust/Bank of America Private Wealth Management in Raleigh and former director of gift planning at the University of North Carolina at Chapel Hill, has been named UNC’s vice chancellor for development.

The hiring of Routh, who begins work October 14, concludes a turbulent year for fundraising at the UNC triggered by a scandal involving his predecessor, Matt Kupec, that led to the resignations of Kupec and of Holden Thorp as chancellor.

After he resigned but before he stepped down in June, Thorp named Julia Sprunt Grumbles, a former corporate vice president at Turner Broadcasting, as interim vice chancellor for development. Grumbles stepped down earlier this month.

And in January, Elizabeth Dunn retired as senior associate vice chancellor for university advancement at UNC-CH. That position still is vacant.

Carol Folt, former interim president of Dartmouth who became UNC’s chancellor on July 1, announced Routh’s appointment today in an email message to the UNC community.

With a new chancellor and vice chancellor, UNC is expected to move ahead with planning for a long-delayed comprehensive campaign that at one time was expected to total $3 billion.

Routh, a UNC-CH graduate, also will be chief executive of the UNC-Chapel Hill Foundation Inc., a nonprofit that receives gifts on behalf of the University, its schools and units.

He has spent the last 17 years serving individuals, families and their charitable interests, including colleges and universities, private foundations and charitable trusts.

At UNC, Routh was director of gift planning in central development from 2006 to 2009 during the school’s last major fundraising campaign, which raised a record-high $2.38 billion over eight years.

He is vice chair of the Board of Visitors for the UNC Lineberger Comprehensive Cancer Center and chair of its Capital Campaign Planning Committee.

A native of Greensboro, Routh is a 1982 UNC-CH graduate, with bachelor’s degrees in economics and religious studies.

UNC-Chapel Hill loses interim fundraising chief

By Todd Cohen

CHAPEL HILL, N.C. — Julia Sprunt Grumbles has stepped down as interim vice chancellor for university advancement at the University of North Carolina at Chapel Hill.

The departure of Grumbles, a former corporate vice president at Turner Broadcasting, leaves the school without fundraising leadership, at least temporarily.

UNC Chancellor Carol Folt is expected this fall to name a new vice chancellor for university development.

The fundraising operation at the school has been without permanent leadership since the resignations a year ago of Holden Thorp as chancellor and of Matt Kupec as vice chancellor for university advancement in midst of a controversy involving Kupec.

That lack of leadership, in turn, has left in a state of suspension UNC’s long-delayed plans for a comprehensive campaign that at one time was expected to total $3 billion.

After Kupec resigned and Thorp announced his resignation, effective at the end of the academic year in June, he named Grumbles as interim vice chancellor for advancement and launched a search for a new vice chancellor.

Folt, a former interim president at Dartmouth who became chancellor July 1, has signaled that total compensation for the new vice chancellor for development might be exceptionally high.

This summer, in an unusual move, the board of trustees at UNC-CH approved a proposal by Folt to let the next vice chancellor for development receive incentive pay of up to 25 percent of his or her base pay by meeting goals set by Folt.

That move led to speculation that Folt might be courting a candidate who already was paid over $500,000 a year.

Underscoring that speculation was the participation by Folt earlier this year, before she took office, in the decision to dismiss search firm Witt/Kieffer from the search for Kupec’s permanent successor.

Thorp had launched that search after he announced he was resigning but before he stepped down this summer. He now is provost at Washington University in St. Louis.

Search firm Isaacson, Miller subsequently was hired to conduct the search.

Elizabeth Dunn retired in January as senior associate vice chancellor for university advancement at UNC-CH. That position still is vacant.

Incentive pay plan for UNC fundraising chief raises eyebrows

By Todd Cohen

CHAPEL HILL, N.C. — In a highly unusual move, the board of trustees at the University of North Carolina at Chapel Hill on Thursday approved a proposal by Chancellor Carol Folt to let the next vice chancellor for development receive incentive pay of up to 25 percent of his or her base pay by meeting goals set by Folt.

UNC, which is searching for a permanent fundraising chief, now can pay the new vice chancellor up to nearly $396,000 a year, based on a maximum set by General Administration for the 17-campus UNC system, according to The Herald-Sun in Durham.

That means the new vice chancellor could earn nearly $99,000 in incentive pay in addition to his or her base pay.

Speculation is that Folt may have a candidate in mind who already is paid over $500,000 a year, or wants to be paid that amount.

Incentive pay, if based on a percentage of contributions, could run counter to ethical principles for fundraising because it could give at least the appearance that, in soliciting gifts from donors, fundraising professionals might be acting in their own self-interest and also might be trying to secure a gift sooner than they otherwise would have.

Folt, former interim president at Dartmouth, succeeded Holden Thorp on July 1 after he resigned last September in the face of a controversy involving Matt Kupec, who the same week quit as vice chancellor for university advancement.

Earlier this year, before taking office but after she was hired, Folt participated in the decision to dismiss search firm Witt/Kieffer from the search for Kupec’s permanent successor.

Thorp had initiated the search after he announced his resignation but before he stepped down this summer.

Search firm Isaacson, Miller since has been hired to conduct the search.

Julia Sprunt Grumbles, former corporate vice president at Turner Broadcasting, is serving as interim vice chancellor for university advancement.

Thorp hired her after Kupec quit.

In the face of all the maneuvers over filling the University’s chief fundraising job, the plans for a long-delayed comprehensive campaign that at one time was expected to total $3 billion remain in limbo.

UNC-CH launches search for chief fundraiser

By Todd Cohen

CHAPEL HILL, N.C. — Holden Thorp, outgoing chancellor of the University of North Carolina at Chapel Hill, has named an 11-member search committee to help identify candidates to be the school’s new vice chancellor for development.

UNC-CH already is searching for a new chancellor to succeed Thorp, who announced in September he would step down at the end of the school year this June.

“With the search for the University’s next chancellor well under way, it’s important to initiative the process now to time the vice chancellor search so my successor will have an opportunity to provide input and be involved in the interview process and final selection,” Thorp says in a message to faculty and staff.

He says UNC also is “using this strategy with the search for the executive vice chancellor and provost.”

Thorp says in the message that he consulted with his predecessor, James Moeser, “who had to deal with two vacant administrative positions when he became chancellor in 2000.”

Moeser “confirmed my thinking that initiating these key searches now would help accelerate the transition process within the administration and put my successor in the best position after taking office.”

Chairing the search committee will be Lowry Caudill, a UNC-CH alumnus, member of its board of trustees, co-founder of Magellan Laboratories, and an adjunct faculty member.

Thorp announced his resignation a week after Matt Kupec, the school’s long-time vice chancellor for university advancement, quit in the face of disclosures he had taken at least 25 personal trips at the university’s expense with Tami Hansbrough, a  fundraiser at the school and the mother of its former star basketball player Tyler Hansbrough.

She and Kupec, who both are divorced, had been in a relationship.

Kupec had pushed for UNC to hire Hansbrough, who quit several days after Kupec, and Thorp knew about her hiring and about Kupec’s role in it, according to published reports.

Thorp subsequently named Julia Sprunt Grumbles, former corporate vice president at Turner Broadcasting, as interim vice chancellor for advancement.

And Elizabeth Dunn is retiring this month as senior associate vice chancellor for university advancement.

Planning for a comprehensive campaign at UNC to raise $3 billion, an effort that had been expected to begin its quiet phase next summer, remains uncertain.

Four years ago, UNC was set to launch a multi-billion-dollar campaign when the economy crashed, so the school put the campaign on hold.

Last spring,  Thorp and Kupec reportedly asked the board of trustees to approve launching the campaign’s quiet phase this past July, but the board rejected the proposal, concluding the school was not ready and needed to spend another year working on its strategy.