Money and quality are inextricably linked among colleges in the United States; the ten U.S. institutions with the largest endowments in 2012 were nearly the same that also made up the year's ten best colleges, with schools like Harvard, Yale, Princeton, Stanford, M.I.T., and the University of Pennsylvania on both lists, according to U.S. News.
Rather than building his school's reputation through sheer accumulation, however, Bard College President Leon Botstein spends it as it comes in, Inside Higher Ed reported. As a result, the historical institution, located outside Manhattan, has campuses in five states and five countries, a range of impressive new buildings and facilities... and concerns from Moody's Investor Services, a bond credit raising business. According to Inside Higher Ed, the school only has enough cash to support the school for two weeks. On one occasion, they were forced to make a late bank payment while waiting for a $7 million donation.
"The board's responsibility is to balance those things and to make sure we can be a successful institution and that's what we discuss, where to draw the lines between fiscal strength and mission," Paul Efron, a former Goldman Sachs executive and now a member of Bard's board, told Inside Higher Ed. "The two are conflict because the mission is expensive, but look at where Bard was 20, 30 years ago versus where Bard is now. It's hard to say it hasn't accomplished a tremendous amount."
Botstein's ideologies are bold and persuasive. He believes in education as a cause and chides schools with large financial stores for being "complacent," according to Inside Higher Ed. Yet, his unyielding principles and natural charisma have allowed him to build Bard in ways other schools might deem too risky. To support its free spending, the college has a wealth of powerful donors, some without any connection to the school. According to Moody's analysis, 43 percent of Bard's operating budget came from donations, a potentially unsustainable amount.
"Clearly they have very, very strong donor support and that is what has sustained these operations over time," said Susan Fitzgerald, a senior vice president at Moody's. "However, they don't really have anything from a balance sheet perspective to fall back on."
If, however, Botstein somehow falls out of favor with donors or leaves his position, some worry that the school won't be able to support itself. Others counter that the board and the school's mission are still the strongest connection to donors. Despite her overarching concerns, even Fitzgerald admitted as much. Botstein, while also championing the efficacy of the board, saw Moody's report as an opportunity for more donor support.
"I welcome the Moody's report because it is a clarion call to our donors to provide us an endowment," Botstein said.
Perhaps, then, a more interesting college ranking would be the colleges who spend the most money per year (or the most money proportionally).
