PEC Update, June 6, 2007

This PEC update responds to recent communications from the college regarding next year's class and the college's financial status, provides an update on the status of the legal appeals and the progress toward meeting the $100,000 matching gift, and suggests ways that you can continue to take action to preserve Randolph-Macon Woman's College. Our challenges to the actions of the Board of Trustees and the current administration of the college must continue – this is the only way to secure R-MWC's future.

College Update

By now you have already received the "Early Summer 2007" email newsletter from the college that explains in great detail how "wonderful the incoming class is this year" and what a "success" coeducation has been for R-MWC. You may have also seen the editorial from the May 30th News and Advance "Randolph College Has a Bright Future" that explained:

"As of April 20, Randolph College - as it will be known on July 1 - had received 1,805 applications. More than 450 of them came from men. Last year, at roughly the same time, the school had received 851 applications from women.

So the college is set to admit 57 male students in the fall. That's nearly triple the school's original goal of 20. Brenda Edson, a college spokeswoman, said men would account for nearly a third of the new class of 172 students, a number that could rise slightly before the new school year begins."

Is this really a success? We ask that you take a moment to consider the information below and judge for yourself.

Recruiting Expenses

Clearly recruiting is an expensive proposition, with costs at every turn. From buying lists of names to mail, to designing print and email campaigns, to just the bare cost of postage alone we are looking at a large expense for the college. It stands to reason that Randolph College spent quite a bit more money on recruitment this year than in previous years. Although the college's newsletter refers to "a delayed start in recruiting" numbers provided by the college to faculty in early January 2007 indicate that by December 15, 2006 the college had sent 853,170 pieces of mail (compared to 485,931 pieces by December 15, 2005). On the email front, they used an outside vendor to send 42 different group emails to targeted groups of prospects (numbering from 47 to 192,894) and received 898,991 individual hits (by comparison by December 15, 2005 they had used the same vendor to send 4 group emails to groups ranging from 7,936 to 111,775 and received 323,728 individual hits). In January the college used the FastApp program from Royall to contact tens of thousands of additional students (plans in early January called for approximately 30,000 male prospects to be contacted through this program at the very least). Clearly the college engaged in active marketing and recruitment throughout this year and contacted many more students than usual.

So how much did the college spend to send at minimum almost double the number of pieces of mail, ten times the group emails, and employ a FastApp program (which required no essay), to achieve 57 total male students and 34 percent less female students in the incoming class than last year? If the college had spent a comparable amount of funds or engaged in such an increase in recruiting programs would R-MWC have attracted a greater universe of female applicants as a woman's college?

Class Size

From The Wall Street Journal to the New York Times the mainstream media has been awash in stories of how this is "a banner year" for college recruitment. The entering college student population is at an almost high (set to peak in 2008) and first tier colleges are literally turning qualified students away. Most colleges have had a record-breaking year with their entering class size.

Randolph College currently has an entering class of 172 students, 53 of whom are male (the remaining four male students are transfers). So we are looking at a first year class of 119 women and 53 men (note that Sweet Briar currently has a class of 206 first year students lined up for next year an increase of 8 percent over last year and 36 percent since their class in 2003). This time last year R-MWC had a class of 179 women. In September 2004 R-MWC had a class of 207 first-time, first-year students – exceeding the budgeted goal of 205 students. So far, coeducation has not afforded the college an opportunity to educate more women by opening the doors to men. With the transfers in December (a loss of approximately 10% of the student body) and an unknown number of transfers this summer, the lackluster class size doesn't even meet the size of last year's class, let alone make up for the losses or provide room for growth. As we know from the college's financial presentations, they expect to eventually field a class of 350 first-year students, while as a woman's college without making any changes they predicted that R-MWC could only hope to have a class of about 195 students. What were the expectations for this year's entering class? Initially, perhaps heady with the increased application volume, the Board of Trustees spoke about an entering class this year of "250 plus" students, then "we've budgeted for a little more than 200 students" and now at 172 we have "exceeded expectations" according to the newsletter.

Really? What is going on here? Wouldn't we all like to know? Clearly the college is not educating more women. To be fair, the college has been quite open in the recent President's letter that by 2014-15 the college hopes to have 1,100 students with about 30% being male. For those of us who did the math, this means about 770 female students which the college cites as "educating more women in future years than in any of the past 20 years." If you examine the headcount for the past twenty years it appears that the word "marginally" is missing from the statement as in "educating marginally more women," since as recently as 2002 the college had a headcount of 764 students.

Regardless, the college seems very far from the 1,100 student goal, and has yet to achieve this year the "failure" of 195 students that R-MWC unchanged could be expected to bring (let alone the 235 that the R-MWC with "global honors" was predicted to enroll). This year's class is the smallest in memory, even though the number of mailings and associated marketing costs are most likely dramatically higher. Yes, the college had more applications, but at what cost and what does it matter if the students do not come? It would be refreshing for the college to provide some firm metrics – how many students did they budget for, what is the expected growth, and what exactly was the recruiting cost per student when you factor in all of the additional marketing costs (including the use of several outside consultants) and increased mailings?

Tuition Discounting

The college's newsletter is quick to point out that next year's class as of May 18 had an average tuition discount rate of "55.1 percent compared with last year's final rate of 68.5 percent." While the final rate is still unknown, the implication is that the financial aid office has been "sharpening its pencils" and really taken a hard look at tuition discounting. Has it?

First of all, let us remember that the national average tuition discount rate in 2005 (most recent data available) for first-year students was 40 percent. The college's outside expert, Dr. Lucie Lapovsky quoted a similar national average (which she indicated was around 37 percent for coed private colleges) in a public forum on campus last October. Our sister women's colleges down the road, Sweet Briar and Hollins, have tuition discount rates around this national average (high 30s/low 40s percent) and have worked diligently to reach this rate during the same years that R-MWC had a tuition discount rate in the mid to high 60s percent. Now with coeducation, our discount rate for first year students still is not down to the national average.

There is an additional factor to consider when looking at the tuition discount rate for next year's class. You may have noted that the May 2007 Alumnae Association email states that a larger percentage of students this year come from Virginia than in previous years. All Virginia residents who apply are eligible for more than $3,000 in Virginia state grant aid regardless of financial need and those with need can qualify for an additional $1,000 in grant aid or more. (An estimated $3,200 will be awarded as part of the Virginia Tuition Assistance Grant to all Virginia students for 2007-2008 who apply and attend eligible in-state colleges and up to an additional $1,000 or more (depending on state funding allocations) is available on a need basis through the Virginia College Scholarship Assistance Program to the most needy Virginia residents). How much of the difference in this year's classes' tuition discounting is due simply to this change in student demographics? If R-MWC had recruited more Virginia students would the decrease in tuition discounting for the woman's college have been the same (only across a larger class so that the college would not be losing out on the housing and fee revenue from this year's smaller class and the additional students that left the college this year?)

Have the tuition discounting policies of the college really changed? The "merit aid" matrix from previous years was present on the college's website during this past recruiting season, so it appears at least from that perspective that policies have changed very little. In the same Alumnae Association email trustee Rebecca Dixon (who left the Board this semester to personally oversee the college's recruitment activities before rejoining the Board this summer) reports that this year the college appears to have a "somewhat less needy class with fewer students qualifying for the highest merit awards." What does financial need have to do with "merit" awards? Did this year's class not meet the SAT or the GPA requirements (clearly need is not cited to qualify for "merit scholarships" on the college's website) – or does "merit scholarship" at Randolph College simply mean "tuition discount" packaged to make students feel better about their academic abilities? It is quite confusing from our perspective. Regardless, it appears that there is quite a bit more work to be done in this area if the college hopes to raise its net tuition revenue and bring tuition discounting down to the level of Sweet Briar, Hollins, or the national average. It would have been great if trustee Rebecca Dixon had left the Board while R-MWC was still a woman's college to address some of these issues directly instead of waiting until the college changed its mission to lend her expertise.

So is this "first coed class exceeding expectations"? The college mailed many more people to educate fewer women and enroll a smaller class that is still receiving discounts far in excess of national averages. So yes, it certainly met our predictions here.

Financial Status of the College

In early May all faculty received a copy of a "Financial Review" conducted by Campus Strategies, a consultant engaged by the college. A copy of this four-page report was recently posted to the Yahoo R-MWC group. It certainly makes for interesting reading.

In short, the college's own consultant concludes that:

1. Tuition discounting at the college is significantly higher than national averages of about 40 percent (with the college's domestic tuition discounting in the mid-60 percent range and international student discounts of around 80 percent).
2. The college funds a "staggering percentage" of its operating expenses with endowment spending (approximately 40 percent).
3. Operationally, the college has 8 percent less students than its peers but 30 percent more employees. It receives less than two-thirds the amount of revenue from students as its peers (see the tuition discounting problem cited above) and the college is 50 percent more dependent on gifts to fund operations than its peers.

The report calls for the college to:

1. Institute a hiring freeze, to defer salary increases, and to aggressively examine staffing and make cuts where possible;
2. Delay the Physical Education and Recreation building enhancements as "pursuit of this at the current time will send the wrong signal to SACS."; and
3. "Leverage the art collection" to realize an inflow of capital to the endowment.

You may have read recent articles in the Lynchburg News and Advance, the Richmond Times-Dispatch, the Roanoke Times, The Chronicle of Higher Education, and the New York Times concerning the probable fate of the art collection. While the administration is attempting to set up agreements to "share the art" by allowing other institutions to buy a share in certain paintings the probable success of this type of arrangement is unknown. It could very well be that the "jewels of the collection" will be sold to bolster an endowment that is currently the largest of any woman's college in Virginia and larger than all but four other private colleges in Virginia.

The Campus Strategies report raises many questions. Has the college been mismanaged for years? Could this mismanagement have led to the decision to embrace coeducation rather than any real issues with remaining a woman's college? Wouldn't it be simpler for the college to live within its means rather than sell irreplaceable art treasures? When is the college going to tell students, particularly the athletes of both sexes, that the new gym they have been sold on will remain a pipe dream for some time to come – or will another entering class simply be sold a bill of goods that the college will not honor? Given the historic dependence of the college on gift income was it wise to alienate a large percentage of alumnae donors?

Is it Too Late to Preserve R-MWC?

Many of you may feel that the college is beyond saving at this point – you are mistaken. The Campus Strategies financial review uses the same data repositories that we cited in "20 Reasons" and other documents to the trustees and confirms what we have said all along – the college has been grievously mismanaged. Where we differ from the college's consultant is that Campus Strategies accepts as fait accompli coeducation and the "leveraging" of the art collection. We continue to believe that if the management issues are addressed, Randolph-Macon Woman's College can be revitalized – without selling the art or any other "asset." There are changes that can be made to help the college operate within its means – means that include one of the largest endowments of a private college in Virginia.

Let us be very clear on this point – of the private institutions in Virginia, R-MWC's endowment is the fifth largest (surpassed only by the University of Richmond, Washington and Lee University, Regent University, and Hampton University).

At $142.8 million in 2006, R-MWC's endowment is larger than the endowments of the remaining private colleges in Virginia:

• Randolph-Macon Woman's College - $142.8 million
• Hampden-Sydney College - $125.9 million
• Randolph-Macon College - $112.2 million
• Hollins University - $109.4 million
• Roanoke College - $103.6 million
• Sweet Briar College - $93.6 million
• Emory and Henry College - $79.0 million
• Lynchburg College - $75.6 million
• Bridgewater College - $54.0 million
• Virginia Wesleyan College - $45.8 million
• Shenandoah University - $44.7 million
• Ferrum College - $39.4 million
• Mary Baldwin College - $38.0 million
• Eastern Mennonite University - $21.8 million
• Averett University - $21.5 million

If we get our college back we will have quite a bit of mismanagement to sort out and 57 male students. This is far from "the end of the world" for R-MWC. These male students can be allowed to graduate from the college (as they have been promised) but we do not need to accept any others. There will likely be natural attrition from male athletes once they learn that the new athletic facility is postponed indefinitely.  A decision to remain a woman's college will also likely result in the departure of many of the remaining male students. So all is not lost – please do not sit on the sidelines and watch the Board of Trustees take one of the largest endowments in Virginia and a priceless art collection raised by supporters of the preeminent women's college in Virginia and use them for a new coeducational college that few of us recognize. If the trust suit wins on appeal the college must prove that it cannot survive as a women's college – and with the large endowment and documented mismanagement it seems unlikely that the administration will be able to make their case to the court.

Time is running out though. Our two legal cases are still in the appeals process and our matching gift is about to expire. We need your help.

Legal Status

The Petition for Appeal for the contract case was filed April 25. The college's response was filed May 17. Both can be found on the PEC website under "Legal Pleadings." The next step is for the Supreme Court of Virginia to decide if it will consider the appeal. We do not have a date for the hearing yet; we will let you know as soon as a hearing is scheduled.

The Petition for Appeal for the charitable trust case will be filed in the Supreme Court of Virginia within the next two weeks. The college will then have 21 days to file their response. As with the contract appeal, we will then need to wait for a hearing date.

It is important to remember that the charitable trust case challenges the college's right to use its "assets" -- including the art – for purposes other than those for which they were given. Thus if we win the charitable trust suit the college cannot use any assets except for the original mission to educate "primarily women" under the name "Randolph-Macon Woman's College" in the liberal arts without first proving to a court that it is impossible, impractical, unlawful, or wasteful to continue as a woman's college. Given the documented successes of well-managed colleges in Virginia, including women's colleges like Sweet Briar and Hollins, with far smaller endowments than R-MWC and the college's own documentation that shows mismanagement at R-MWC it seems likely that the college will be unable to prove to a court that it cannot continue as a women's college. Thus, your support of the charitable trust appeal is the most visible way that you can express your desire to prevent the college from selling or otherwise encumbering the Maier Museum Collection.

We have received questions from some of you asking why we have not sought an injunction to prevent the sale of the art.  Although it may be difficult to sift through the pleadings, if you look at both the student contract and charitable trust complaints you will find that both seek relief in the form of an injunction. Appealing these suits is the best way to secure an injunction.

Thus we have been in the process of seeking injunctive relief since the filing of our first lawsuit.  If you want to help us seek an injunction to prevent the sale of the art, you can help by funding the charitable trust appeal and by contacting everyone you know to encourage them to make as much noise as possible in opposition to the sale of the art both to the trustees of the college and to the Virginia and national media.

Fundraising – Matching Gift

The $100,000 matching gift program expires on June 30. To date we have raised approximately one third of the match total from the generous gifts of more than 100 supporters. Unfortunately, we stand to lose two thirds of the gift if you do not take action today. Consider what Randolph-Macon Woman's College means to you and that the lawsuits represent one of the few remaining ways that we have a chance of preserving our alma mater. The legal objections at Wells College ended because they simply did not have the funds or the will to continue. We cannot allow the same to happen to R-MWC.

So please give today to fund the legal appeals. If every PEC supporter receiving this email sent in $100 we would raise more than $100,000 immediately and receive the benefit of the full match. All members of PEC's Board have contributed to the matching gift (in some cases multiple times) and we ask you, just as we have asked our family and friends, to donate as generously as possible before the match expires. If you are going to donate funds to PEC, please do so before June 30 so your gift can be effectively doubled to support the ongoing efforts to preserve Randolph-Macon Woman's College.

You can make your donation via PayPal through the PEC website (www.preserveeducationalchoice.org) or by sending a check made out to "Preserve Educational Choice" to:

Preserve Educational Choice, Inc.
P.O. Box 29612
Richmond, VA 23242

PEC can also accept gifts of securities and one generous donor has already taken advantage of this option. If you would like to make a gift of securities, please email us at info@preserveeducationalchoice.org.

Letters to the Editor

The most important thing each of us can do as individuals right now, besides continuing to question the strategic plan and its implementation through interaction with the college's trustees and administrators, is to write letters to the editor. For example, the Richmond Times-Dispatch is read by all of the "powers that be" in state government and the state judicial system as well as many alumnae of the college. Like most large papers, the Times-Dispatch will only run letters about an issue if it seems to have struck a chord with the readership – so the more letters the better. Even if your letter is not printed (they can only print a representative sample) the fact that you send a letter at all may make the difference in the issue receiving coverage.

There are many ways to approach the issues at the college. Some may believe that selling the art is unethical while others may be resigned to a sale but believe it should benefit a woman's college not a coed institution. Others may be more concerned about the governance structure and how the board is elected and what impact this has on oversight of controversial decisions (like changing the mission of the college). Perhaps some are relatively content with the outcome of the decision in September but take issue with the decision-making process itself and how it unfolded with the alumnae body. Some may question if women's education is being unfairly blamed for the financial outcomes of years of possible mismanagement (such as the tuition discounting and operational issues described above). There are as many perspectives on the issues as there are alumnae. There are several interesting facets to what is happening at the college from a media perspective and all of them are appropriate for letters to the editor and suggestions to individual reporters for coverage.

Final tip: for letters to the editor check their guidelines for length (no use sending them 1,000 words if they only want 250) and try to mention an article in their paper that you are responding to (like the Michael Paul Williams' article on the Maier in the Times-Dispatch – you can access links to recent articles about the college and published letters to various publications in the "Press" section of the PEC website).

If you email your letters to info@preserveeducationalchoice.org we will post the letters on our website.

Please take action today. Let your classmates, your community, and the Board of Trustees know that the fight still continues and we haven't given up on our alma mater.

Vita abundantior,

PEC Board

Gail Ballou (R-MWC '64)
Carol Curcio Lang (R-MWC '68)
Diane U. Montgomery (R-MWC '85)
Anne Yastremski (R-MWC '05)
Martha McClerkin Durnett (R-MWC '85)
Chantel Sheaks (R-MWC '91)

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