Endowed Chairs and the "Dark Matter" of Higher Education

[The Higher Education Inquirer encourages college newspapers to explore their own schools for information on endowed chairs and to share it with us.]  

More than a century ago, Thorstein Veblen and Upton Sinclair critically exposed the structure and history of US higher education. Others have followed. Yet there is still much that the public doesn't know about the higher education business. Endowed chairs and their donors are one area of "dark matter" worthy of investigation. 

The Association of American Colleges and Universities estimated in 2011 that there were approximately 10,000 endowed chairs in the United States.

The Council for Advancement and Support of Education reported in 2018 that the average endowment for a new chair position was $3 million. This suggests that there may be tens of thousands of endowed positions nationwide. 

A 2021 study by Inside Higher Ed found that there were over 8,500 endowed positions advertised on the Chronicle of Higher Education job board between 2016 and 2021.

While it may not be possible to determine the exact number of endowed chair positions in the US, it is clear that they play a significant role in supporting higher education and research.

Some highly controversial donors have been involved in funding endowed chairs, including the Sackler family, heirs to the Purdue Pharma fortune. 

Quid Pro Quo Arrangements

Determining the frequency of quid pro quo arrangements in creating endowed chairs is challenging due to the limited transparency and inconsistent reporting practices. However, several factors suggest that these arrangements may occur more often than publicly acknowledged.

Factors suggesting the prevalence of quid pro quo: 

Lack of transparency: Universities often lack clear and transparent guidelines regarding the creation and funding of endowed chairs. This lack of transparency creates fertile ground for potential quid pro quo arrangements. 

Donor influence: Donors offering significant financial contributions often have certain expectations, which may include influencing curriculum, research focus, or even faculty appointments. This can create pressure for universities to accommodate these expectations, even if they deviate from academic merit or institutional priorities. 

Competitive pressure: Universities face intense competition for funding, leading them to be more receptive to donors' demands, particularly when dealing with large sums. This creates a situation where donors can leverage their financial power to influence decisions.

Challenges in quantifying the frequency:
Subtle and indirect forms of influence: Quid pro quo arrangements can be subtle and indirect, making them difficult to identify and quantify. For instance, a donor may not explicitly demand specific research outcomes but might indirectly influence them through conversations, gifts, or other forms of pressure. 

Lack of reporting: Universities rarely disclose the details of their agreements with donors, making it difficult to assess the extent to which quid pro quo arrangements exist.

Fear of retaliation: Academics and university officials may be hesitant to come forward and report cases of quid pro quo due to fear of retaliation, further obscuring the true scope of the issue. 

 

Related links:

 
HEI Resources

The Business of Higher Education 

A People's History of Higher Education in the US?

One Fascism or Two?: The Reemergence of "Fascism(s)" in US Higher Education

 

 

The Business of Higher Education

Higher education is a multi-trillion dollar industry in the US, if you include endowments, land, and other investments.  Journalists and policy people who cover the industry are often quick to put schools and their related businesses into distinct categories, but these categories are oversimplified.  One of the biggest oversimplifications is in categorizing schools as "for-profit" and "non-profit."  

For-profit higher education has typically referred to institutions operating as profit-seeking businesses, but this ignores three centuries of history, economics, and public policy showing the intermingling of for-profit institutions and non-profit enterprises with a for-profit mentality.    

For-profit schools and the for-profit mindset are not new to US education.  While elite private religious based colleges were the first schools of higher education, proprietary training was also available during the late 1700s.  It could be argued that even then, elite colleges could not have grown without the benefits of enslaving their labor, the ultimate in greed and depravity.   

After the US Civil War, through federal legislation (the Morrill Act), state flagship universities were "granted" land stolen from indigenous nations. Private and public black colleges were also formed.  For-profit business and trade schools also sprang up in many American cities, serving a growing demand for entrepreneurs and skilled labor. Private non-profit colleges followed suit.  As early as 1892, University of Chicago started a correspondence school, a money-making strategy copied by Penn State, University of Wisconsin, and many other universities.  

Since the early 20th century, critics have complained about money rather than academics driving traditional university leadership. Thorstein Veblen's book  The Higher Learning in America (1918), was subtitled, "A Memorandum on the Conduct of Universities by Business Men."  Yale and Harvard also brought on football, which was a big money maker for the schools in the early 20th century. In the Goose-Step (1923), Upton Sinclair named names of those with wealth, power, and influence--including a number of robber barons.  

With the help of government funding, higher education grew by leaps and bounds after World War II (the GI Bill) and into the 1960s and 1970s (Pell Grants and federal loans).  State universities and community colleges grew in number.  In 1972, with the reauthorization of the Higher Education Act, proprietary schools gained access to these funds to become a larger player in US higher education.  

By the 1980s, the for-profit University of Phoenix (UoPX) became a pioneer as a mega-university, a  school of over 80,000 students with an emphasis on adult learners, convenience, and a business attitude.  For-profit schools gained legitimacy as universities like Devry and UoPX became regionally accredited and others created their own national accreditors.  In the 1980s and 90s for-profit colleges grew as they became publicly traded corporations with enormous profits and political power. 

With profit-driven schools, academic labor was faced with unbundling, where components of the traditional faculty role (e.g., curriculum design) were divided, while others (e.g., research) were eliminated.  Colleges resembled academic assembly lines rather than bastions of wisdom.  But the marginalization of academic labor was not reserved to for-profit schools.  

As this great unbundling was occurring, state flagship universities became enormous research institutions with multiple missions, many of them profit driven.  Proponents of privatization, outsourcing from for-profit companies, have said that it "helps universities save money and makes them more nimble and efficient." Moody's Dennis Gephardt, however warns that "more and more are cutting closer to the academic core." 

Since the 1980s commercialization in nonprofit and public higher education has accelerated, with universities increasingly involved in enterprises focused on generating net revenue, such as licensing of patents. Indicators of for-profit incursions into nonprofit and public higher education may include university medical centers, corporate sponsored science labs, for-profit mechanisms such as endowment money managers, for-profit fees for service, for-profit marketing, enrollment services and lead generation, privatized campus services, for-profit online program managers (OPMs), privatized housing, private student loans, student loan servicers, student loan asset backed securities, and Human Capital Contracts, also known as income share agreements.

For-profit college enrollment has been in decline since the 2010-2011 school year.  University of Phoenix and Devry are shadows of their former selves,  and two other big schools, Kaplan University and Ashford University have been transformed into arms of two state universities, Purdue University Global and University of Arizona Global Campus.   

But proprietary colleges have not been the only type of colleges in decline.  Community colleges and second tier public and private colleges also reported significant enrollment and revenue losses.  Community college enrollment, in fact, has declined in absolute numbers more than for profit colleges.  

During this decade long decline, what I have referred as the College Meltdown, for-profit mechanisms have gained even ground as government aid and institutional bonds fill in revenue gaps.  Today, US higher education marketing and advertising is ubiquitous. The Harvard Business School operates in many ways like a for-profit enterprise.  And many elite schools rely on predatory for-profit online program managers to recruit students for elite certificates, adding some pocket change to their already bulging resources.