The Waco Tribune-Herald: A long way to go on Baylor 2012 endowment goal

Article reprinted with the permission of The Waco Tribune-Herald.
By MICHAEL W. SHAPIRO
Monday May 7, 2012
Second article in a six-part series examining the progress of Baylor University's 10-year plan known as Baylor 2012, which is concluding this year.
Baylor University hit many of the lofty benchmarks laid out in the school's ambitious 10-year plan approved by regents during the at-times tumultuous presidency of Robert Sloan. But there was one glaring example where the school fell short.
Baylor 2012 set a goal for the university's endowment, which pays for scholarships and certain faculty positions, to more than triple in 10 years to $2 billion.
At the close of the 2011 fiscal year, the number stood at just more than $1 billion, according to a National Association of College and University Business Officers report.
The past decade brought a shaky economy, turnover in the president's office and clashes between separate alumni groups about the direction of the university.
Still, by mid-2011 the endowment had grown by more than $400 million for the decade, an average of 6.2 percent annual growth, despite several hits to the school's portfolio when financial markets were reeling.
Baylor's vice president of finance and administration, Reagan Ramsower, called the original target "a stretch goal."
Ramsower said that at times, particularly before the recession that started in late 2007, the $2 billion number still seemed achievable. The endowment is funded by donations and grown through investments.
A draft of Baylor's next long-range plan doesn't contain a similar endowment goal and generally is much more flexible than Baylor 2012 in terms of benchmarks.
But Ramsower said, "We do have a plan for the endowment and it's based on a forecast."
He said the school's finance officials see the endowment realistically reaching $1.8 billion in the next 10 years.
Even some ardent Baylor backers acknowledge that in the wake of the announcement of Baylor 2012, a divisive and protracted dispute between school administrators, regents and the Baylor Alumni Association caused fundraising hurdles.
"There was a lot of angst through the whole process with the (Baylor) Alumni Association and the selection of a new president," said Paul Foster, an El Paso oilman whose $3 million donation in 2006 allowed for the construction of a centralized career center on campus.
Foster said the infighting has died down for the most part, and Baylor's fundraising course appears to be on a good track thanks in part to President Ken Starr, who came to Baylor in 2010.
"I think Starr coming in was a huge catalyst to calm everything down," Foster said, adding, "I certainly am not aware of any issues with them as far as their ability to raise money."
He pointed to the recent donation by Temple business magnate Drayton McLane for an on-campus stadium as evidence of the shift.
McLane, a former regent, in the past has said the turnover in the president's office prior to Starr taking the helm put a damper on fundraising and contributed to the university not hitting its $2 billion goal.
In a February 2010 interview with the Tribune-Herald , McLane said he still thought Baylor could get its endowment to $2 billion by 2012 or 2013.
The endowment stood at $584 million around 2003. The fund surpassed the $1 billion mark in mid-2007, but then dipped below that level for several years.
On the strength of 15 percent annual growth, the fund finished fiscal year 2011 at just above $1 billion.
Ramsower said the economy is projected to move ahead slowly in the next decade. "Just like the economy, we're not maybe as ambitious (as in the past), but we're equally excited."
And in a slow-growth period, he said, it'll be of utmost importance to keep Baylor's tuition competitive and not price potential applicants out of an education.
"Now there's much more pressure to constrain growth in tuition," he said.