This issue of Wabash Magazine celebrates the incredible generosity of the alumni and friends of our College in the Giant Steps Campaign. These are achievements worth celebrating. Indeed, if we look objectively at our accomplishments, it is appropriate to pause and marvel at what transpired over the past five years. We set an audacious goal to raise $225 million. We blew past that on the way to $250 million. And let’s not lose sight of the fact that we did all that with a pandemic and presidential leadership shift inserted unexpectedly in the middle of the process.
People ask me all the time what my view is of the impact of Giant Steps on our College. My answer is that it should inspire each of us—during a time when the national conversation about higher education is so negative—to see that Wabash is a college whose best days are ahead of it. We should be rightly proud of the lives transformed in the past, but we should be pushed to move ahead in service of the young men who will become alumni during our third century. We can and must move forward even during difficult times for colleges and universities.
While Giant Steps has had immediate and transformational impact on our campus—from new majors to opportunities for immersion learning to the beautiful Little Giant Stadium—the greater impact will be on the students, faculty, and staff who learn, live, and work at Wabash in the decades to come. To achieve the full potential of this incredible philanthropy, we must dedicate ourselves to being responsible stewards of these gifts.
Giant Steps has been the focus of our outward-facing engagement and philanthropy, but back on campus we have been working just as hard to improve our operations in ways that contribute to our long-term success and, in particular, our financial position. Perhaps the best example of that work has been our reduction of the endowment draw—the annual withdrawals we take to support the operational costs of the College.
We reduced the endowment draw to 5.5% and have held at that level for several consecutive years. This has the effect of leaving $3 million to $4 million annually invested in the endowment that previously was being spent just to run the College. Reducing spending and identifying additional revenue has been challenging work—requiring sacrifice and creativity across campus—but the payoff over the long run will be substantial.
Because the endowment is so central to the College’s financial model, we chose to identify a new partner to manage the endowment just prior to the launch of Giant Steps. Strategic Investment Group now serves as our outsourced chief investment officer (OCIO). They manage a few dozen clients with endowments totaling about $20 billion. The OCIO model allows us to combine Strategic’s expertise and investment opportunities with our unique needs as an endowment-driven institution.
The partnership between Strategic and the Board of Trustees’ Investment Policy Committee is paying off handsomely. Our recently completed review of performance showed that during the past seven years of their management, endowment returns (net of fees) have exceeded the benchmark by $14.1 million. Additional favorable returns have been generated by choosing the appropriate long-term asset allocation and then regularly rebalancing to that asset allocation through market cycles.
It’s important to share these examples of our financial stewardship as a counterbalance to the prevailing, negative discourse focused on colleges and universities in this country. Every week I read another article on higher education in the national press that causes me to say, “The picture they are painting is unrecognizable to me.”
In August, my frustration with the media portrayal of higher education reached a new high when I read a Wall Street Journal article titled, “Colleges Spend Like There’s No Tomorrow. ‘These Places Are Just Devouring Money.’” I was especially bothered by the headline given that the story examined seven public flagship universities—and not a single college.
I am grateful that the Chicago Tribune published and syndicated my critique of the Wall Street Journal piece. I invite you to read it online but will share just one bit of data I used to make the point that broad generalizations about colleges and universities often don’t apply to Wabash College.
The Wall Street Journal’s criticism of university spending was based on comparing budgets in inflation-adjusted dollars from 2002 to 2022. While some universities did have dramatic increases in their budgets, I was able to show that Wabash had no such increase. In fact, our budget slightly decreased in today’s dollars.
I don’t want to imply that holding costs constant is virtuous or the best choice for every institution. I suspect that many flagship universities are called upon to do things today that weren’t expected of them 20 years ago.
It is my hope that Giant Steps allows us to make some necessary investments in Wabash’s people, places, and programs over the coming years. And I can promise you that those investments will be made with full consideration of our responsibility as stewards of your philanthropy and the noble traditions we inherit.
Scott Feller | President