Dickinson College Homepage Dickinson Magazine This issue of the Dickinson Magazine was mailed on Monday, March 27, 2006
From This Issue
Volume 83 • Number 4
Spring 2006

Applying Business Models to Higher Education
Dickinson Achieves 3 Key Milestones
By Christine M. Dugan

In 1999 when Dickinson College President William G. Durden ’71 returned to lead his alma mater, he brought with him experience in two seemingly disparate worlds—the academic and the corporate. Ultimately, it was the merging of these two worlds that would put the small liberal-arts college on a trajectory into permanence as a top-tier, nationally ranked institution. Durden and the board of trustees knew that Dickinson’s faculty and academics were world class but, financially, the college wasn’t positioned to sustain that excellence into the 21st century. To achieve its overall goal, what the college needed was a plan—and money.

At an all-campus meeting this past January, Durden announced that the college was starting the New Year with a record endowment. Just three days later, the National Association of College and University Business Officers (NACUBO) released the results of college and university endowment growth for the year ending June 30, 2005.

Dickinson College had posted an increase of 29.8 percent in its endowment, placing it 16th among 746 institutions nationally (in the top 2.1 percent)*. Not only had the college surpassed most of its wealthier peers, it had performed better than many much larger, household-name research universities with significantly larger endowments. The market value of Dickinson’s endowment as of Dec. 31, 2005 was $266.3 million.

The second milestone occurred when applications for fall 2006 at the private college topped 5,000—only 17 of the most highly selective liberal-arts colleges reached this number in 2005. 

The last and clearest indicator of Dickinson’s financial strength occurred on Feb. 3, when Standard & Poor’s (S&P) assigned a new rating of “A” to the college—the highest in college history. Dickinson’s last rating action was in 1996, when S&P published a downgrade from A- to BBB+ on outstanding debt.

The college’s triple play began with a strategic plan, something few colleges, and even fewer liberal arts colleges, have. With a commitment to rigorous accountability and clearly defined and measurable key performance indicators in finance, operations and admissions, the plan engaged the entire college community. Everyone knew of the plan and everyone was working to implement it.

“When we say everyone contributed to Dickinson’s success, we mean everyone—our distinctive faculty, staff and students,” said Durden. Not only were these groups responsive in developing and implementing the strategic plan, they were leading players.”

“The strategic plan gave us a clear identity and laid out our leadership story,” he added. “By reaching back to our revolutionary roots and the ideas of our progressive founder, Dr. Benjamin Rush, we were able to focus on our core strengths, while venturing into innovative areas, both academically and financially. We weren’t afraid of change, and we weren’t afraid to try.”

One of Dickinson’s most recognized core strengths is its excellence in global education, a practice that Rush fully embraced and one that remains useful today. But how could Dickinson bring innovation to Rush’s other liberal-education principles and have them be relevant 223 years later?

“Dickinson is at the forefront of demonstrating the value of a liberal-arts education,” said Provost and Dean of the College Neil Weissman. “We have a faculty that recognizes the increasingly competitive environment in which we operate and mobilizes to address it. What other college responds to market pressure with an innovative major in archaeology rooted in classics? Our faculty has been critical in supporting our success, whether meeting with prospective students or creating the curricular and support context that has enabled our campus to become more diverse.”

If academics are the soul of an institution, its endowment is its heart, and Dickinson’s had dipped after years of 6 percent spending in the latter 1990s. “Growing our endowment became a priority for the college’s investment committee, and their leadership is bearing good fruit,” said Durden. “The liberal arts prepare business leaders to be agile, and our investment committee embodies this,”

For example, in 2000, Dickinson’s board made its investment committee smaller, so it could be more nimble. It also created a series of small working groups of Dickinson alumni with specific investment expertise to serve on subcommittees with investment-committee members. This approach has yielded not only financial success, it has strengthened the college’s relationships with its younger alumni, who welcome contributing advice, not just donations, to the college.

With these alumni and consultants providing guidance, the board moved into asset categories once unavailable or thought too risky for small institutions like Dickinson. “Distressed debt, hedge funds and private equity are all areas we have had success in, with the help of our ‘alumni partners’,” said Parker. “Usually, small endowments are afraid to step out of traditional asset classes and into the nontraditional, but it is the nontraditional that have added value in the last few years.”

Another goal the college and its board focused on was to re-establish Dickinson’s bond rating. Declining admissions and related liquidity issues resulted in a downgrade in 1996. The downward movement continued and, by 1999, with a first-year discount rate of 52 percent, a multimillion dollar operating budget deficit and a precarious debt-to-asset ratio, the college had to take steps to regain financial stability so it could focus on strength and permanence.

As part of getting its financial house in order, the college gave its attention to enrollment. Durden recruited Robert J. Massa from Johns Hopkins University, where he had gained national recognition by improving that institution’s market position as JHU’s dean of enrollment for 10 years. His agenda as Dickinson’s vice president for enrollment and college relations was to enroll first-year classes that would add value to a Dickinson education, were more reflective of the world and would have a lifelong affiliation with the college.

Through targeted recruitment and partnerships with urban foundations, such as the Posse Foundation, Philadelphia Futures, College Bound and Wight, he increased enrollment of underrepresented students and economically disadvantaged students. He began recruitment of international students utilizing similar strategies. International student now comprise 6 percent of Dickinson’s enrollment, up from less than 1 percent in 1999, and enrollment of students from underrepresented groups has tripled—from 5 to 15 percent.

Non-need-based “merit aid” has dropped from allocation to 20 percent of the student body to 10 percent, with further reductions planned to enable the college to focus on access for excellent students with insufficient financial resources. The college also has decreased the tuition discount rate from 52 to 34 percent.

Dickinson is now receiving almost 50 percent more applications while admitting fewer than half its applicants, increased its SAT profile by 100 points and has stabilized its gender balance at 45 percent male and 55 percent female. The college also increased alumni giving to 43 percent and went from six alumni clubs to 17 domestic and one international.

Today, reserves have been restored; operations are adding an additional $2 million annually; the discount rate is stable at 34 percent; endowment spending is down to 5.25 percent; the asset-to-debt ratio is a solid 2.4:1 and, for the year ending June 30, 2005, the college’s “net worth” increased by $56 million or 24 percent in one year. This was the result of $38 million in contributions—a record for the college—and investment returns of $31 million, also a record.

Dickinson’s efforts to strengthen its distinctive characteristics and raise its national profile are recognized by academic and business institutions around the globe.

NAFSA: Association of International Educators in its April 2003 report Internationalizing the Campus, noted, “In many respects, no college is more internationally minded than Dickinson College.” In 2004 Dickinson received a grant from the U.S. Department of Education to participate in an American Council on Education project to assess international learning and another to support the college’s involvement, along with the University of Minnesota and Georgetown and Rice universities, in studying student-learning abroad.

The Wall Street Journal named Dickinson one of the country’s “hot schools” and one of the 16 colleges and universities “poised to be players in the new landscape.” When Washington Post education writer Jay Mathews asked high-school counselors to identify colleges that deserve a higher profile because of the quality of education and the experience they provide to students, Dickinson was fourth on his list ‘with its academic standards higher than ever and an award-winning study-abroad program.”

David Kirp in his book, Shakespeare, Einstein, and the Bottom Line: The Marketing of Higher Education, cites Dickinson in one of his case studies alongside heavyweights the Massachusetts Institute of Technology, Columbia University, the University of Southern California, New York University and the University of Chicago, “‘What Benjamin Rush proudly described as his ‘petulant brat’ is defining itself as a school with ‘attitude’ and ‘spunk’,” he wrote.

“It’s the perfect combination—winning in a business world to advance education,” said Durden. “To quote Ed Sevilla’s 2004 article in University Business, where he wrote about the challenges faced by colleges and universities in balancing marketplace demands with the values of higher education, ‘The few that can, like Dickinson College and New York University, survive as winners. The rest of us lose spectacularly.’ ”

* As released by the National Association of College and University Business Officers (NACUBO) in its official survey of higher education endowments for the year ending June 30, 2005. NACUBO does not include pledges or deferred gifts in its calculations, as do Dickinson College’s financial statements. Total endowment on Dickinson’s financial statements on June 30, 2005, in accordance with generally accepted accounting standards, was $251.4 million, up from $198.3 million at the end of fiscal year 2004. Total endowment on Dec. 31, 2005 was $266.3 million.


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