Moody's downgrades Valpo's bond rating

[vu84v2]

valpopal - I think you are confusing ethical behavior with a perspective that all stakeholders must be satisfied/happy for an action to be ethical. Valpo is doing something that you, some others in the university, and a group of art associations (the latter of whom should have no consideration in decisions made by Valpo) disagree with. That does not make it unethical. Further, I ,as an alum and donor, would argue that not applying resources that are clearly not within the mission of the university to advance the mission of the university is unethical.

[valpopal]

valpopal - I think you are confusing ethical behavior with a perspective that all stakeholders must be satisfied/happy for an action to be ethical. Valpo is doing something that you, some others in the university, and a group of art associations (the latter of whom should have no consideration in decisions made by Valpo) disagree with. That does not make it unethical. Further, I ,as an alum and donor, would argue that not applying resources that are clearly not within the mission of the university to advance the mission of the university is unethical.

I believe you are the one who is undermining ethical behavior to justify your viewpoint. According to your logic in a previous comment ("If someone offers a million dollars more than other prospective buyers or the estimated market price and they want to hang it in their house where almost no one can see it, that is not Valpo's problem"), you conclude Valparaiso University would not be in violation of its commitment to "the highest standard of ethical behavior" and has no obligation to its donors who purchased the paintings specifically for the public good by displaying it in a museum, nor would you see that as a betrayal of Valparaiso University's stated mission to "maintain a high level of public trust and respect." Therefore, by your same logic, it also would be all right for Valpo to sell a world renown painting for the highest price to a prospective buyer who has indicated a desire to deface, damage, or destroy the artwork upon purchase because that "is not Valpo's problem." 

[vu84v2]

valpopal - While that is not a realistic scenario, we can agree that selling paintings to someone who would destroy them would be unethical.

The problem with statements like "highest standard of ethical behavior" and "maintain a high level of public trust" is that those phrases have wildly differing definitions across the range of stakeholders. Indeed, people who feel wronged choose aspirational, but fairly ambiguous, statements like these to justify their cause. One could make darn near any argument and use those phrases as justification.

Your arguments regarding ethical behavior don't hold a lot of water when you bring in the perspective of donors. What you are effectively arguing is that donors should donate more money for capital projects because the university should not sell the paintings or should sell the paintings at a lower price to someone whom the art community approves. Since the amount of money needed is the same regardless, the net effect would be (since the art can be sold) that the donors for capital projects (i.e., dorms) are expected to fund the art.

[valpopal]

valpopal - While that is not a realistic scenario, we can agree that selling the painting to someone who would destroy it would be unethical.

The problem with statements like "highest standard of ethical behavior" and "maintain a high level of public trust" is that those phrases have wildly differing definitions across the range of stakeholders. Indeed, people who feel wronged choose aspirational, but fairly ambiguous, statements like these to justify their cause. One could make darn near any argument and use those phrases as justification.

So selling the painting to a prospective buyer with intent to deface or destroy the artwork would be unethical. But selling a world renown painting donors hoped would be used for the public good to an individual intending to permanently prevent public viewing would be ethical. Seems to me you have an inconsistency here. Ethics are principles based upon fundamental truths and not so pliable. That is why upholding "the highest standards of ethical behavior" can be damned inconvenient at times. As for the problem with those phrases: they are from Valparaiso University's "Mission and Values Statement on a Commitment to Ethical Behavior." I think you might want to address VU with your criticism: "One could make darn near any argument and use those phrases as justification." 

[vu84v2]

valpopal - An organization looking to hold itself to the "highest standards of ethical behavior" is a worthy vision. The problem in universities (and some other types of organizations) is that when a hard business decision needs to be made the stakeholders who disagree with the decision just run and point to that statement and say "you're not being consistent with that statement." I do think that Valpo is an ethnical organization...I just recognize that there are hard business-oriented decisions that must be made and that there are many other stakeholders besides those who place nearly infinite value in art that is not associated with the university mission.

[valpopal]

art that is not associated with the university mission.

This notion that "art is not associated with the university mission" is countered by the very history of Valparaiso University. Numerous presidents of the university have praised art as a core resource in the education of students. You can look up the words and actions, including budgetary, of Kretzmann, Huegli, Schnabel, Harre, and Heckler, among others. Only Pres. Padilla has thought otherwise. Huegli initiated an official "Director of Art Galleries and Collections" and a "Visual Arts Council" in 1972 and in 1974 renamed the Sloan Committee overseeing acquisitions to the "University Museum Council." Not only did those presidents support the establishment of a collection of art for the university, but they also saw to the construction of the museum in the 1990s as an anchor for the Arts Center located on campus directly across from the chapel and viewed as a hub of liberal arts education. As well, an ongoing VU Cultural Arts Committee, created in 1974 and continuing today, has funded arts annually specifically to advance the education mission. Prior to the building of the museum, exhibits of the art collection were held in all of the educational centers for assistance in the instruction of students: including Moellering Library, Christ College, Neils Science Center, Lebien School of Nursing, as well as the Chapel, the Union, and the Law School.

Indeed, the original Sloan endowment that gave birth to the university's art collection was established "to expand and use the Collection educationally," according to a brief history authored and published in 1995 upon the museum's dedication by professor emeritus of Geography and one-time (1973-1979) Vice President of Academic Affairs John Strietelmeier. As he wrote: "Music, the theatre, painting, sculpture—these are not merely the ornaments of life; they are the marks of our humanity. the carriers of civilization. The new Center for the Arts, which we are formally dedicating this weekend, is a bold, strong assertion of this University's continuing commitment to these arts. And the inclusion in that building of gallery space for the Valparaiso University Museum of Art is for many of us a special joy, for it is the fulfillment of a promise made almost half a century ago when the University was given the nucleus of its present extensive collection of works by American artists." He also included in his opening sentences a purpose for compiling that history of the role art has played in education at Valparaiso University: "Colleges and universities have notoriously short memories. A student generation passes through in somewhat less than four years: and, at least in my day, there was a turnover of thirty or more faculty members every year. How, then, can we be expected to remember...."

Anyone who believes "art is not associated with the university mission" is an outlier in the history of Valparaiso University and speaks contrary to the facts included within it.     

[vu72]

This notion that "art is not associated with the university mission" is countered by the very history of Valparaiso University. Numerous presidents of the university have praised art as a core resource in the education of students. You can look up the words and actions, including budgetary, of Kretzmann, Huegli, Schnabel, Harre, and Heckler, among others. Only Pres. Padilla has thought otherwise

The Brauer Museum boasts a collection of more than 5,000 works of art from the mid-19th century to the present. Also included are world religious art and Midwestern regional art. The collection comprises paintings, sculptures, drawings, prints, and photographs.

Somehow the sale of three pieces out of over 5000, will somehow make "art as a core resource in the education of students", reduced to an unrecognizable shadow of its former status on campus.

[usc4valpo]

valpopal - nothing truly unethical is going on with the sale. The sale is going through hearing, the sale will happen and we can move on to keep Valparaiso University afloat.

Besides, this O'Keefe painting honestly looks like something from a South park episode...

[valpopal]

Somehow the sale of three pieces out of over 5000, will somehow make "art as a core resource in the education of students", reduced to an unrecognizable shadow of its former status on campus.

Of course, why didn't I think of this. After all, I remember how the Chicago Bulls had enough other players to field a team after Michael Jordan left.

[valpopal]

valpopal - nothing truly unethical is going on with the sale. The sale is going through hearing, the sale will happen and we can move on to keep Valparaiso University afloat.
Besides, this O'Keefe painting honestly looks like something from a South park episode...

Thanks so much for the assurance. Whew! And here I was foolishly listening to the multitude of experts in the field and those specializing in ethics at the university when I could have gotten a guarantee "nothing truly unethical is going on" from someone whose art knowledge extends to misspelling the painter's name and comparing a world-renowned masterpiece modern work to a South Park episode. I'm convinced now. 

[usc4valpo]

The artwork and masterpieces of Matt Stone and Trey Parker, including producing one of the greatest broadway musicals ever produced,  have had a larger global cultural influence than the artwork being sold at Valparaiso University.

[vu72]

I am leaving at the end of the year for a better job.

I'm sure you will be much happier and perhaps the University will be better off with a faculty member proud to be part of a prestigious institution like Valpo.

[valpopal]

The artwork and masterpieces of Matt Stone and Trey Parker, including producing one of the greatest broadway musicals ever produced,  have had a larger global cultural influence than the artwork being sold at Valparaiso University.

Yes, and they rightfully have created a $1-billion empire for their wonderful popular work, which I enjoy as well. However, as Valpo students have been taught every semester during the university's history, one should be able to distinguish between different types of art—popular, fine, applied, etc. Danielle Steel was the most popular novelist of the 20th century and #1 on the all-time New York Times bestseller lists top 50, selling nearly a billion copies of her books. Hemingway doesn't appear until #32 and Faulkner doesn't appear at all. Yet, both Hemingway and Faulkner are the Nobel Prize winners.

[usc4valpo]

wow, some cold statement here from 22 and 72. valpo22, I hope all goes well with you and appreciated the discussions.

[David81]

I haven't checked in here in a while. I think this particular vein of bickering over the art sale is a pointless red herring debate at this point. Surely the art is kind of a null issue, since nobody has any illusions that the university cares or can afford anybody or anything of quality. The paintings should be sold to a more worthy institution.

The bigger conversation is that the uni adminstrators hired a consulting firm (the RPK Group which did the cuts at West Virginia University: https: //www.thenation.com/article/society/wvu-cuts-higher-education/ "The Evisceration of a PUblic Unviersity"), so everybody awaits their report in the early Spring to see what the university will probably hack away next. If the RPK's track record in destroying universities and their reputations is anything to go by, then VU Board and Administration is probably going to use these (expensive) 'consultants' as the third-party justification to keep raising teaching loads, paying dirt, cutting programs and offerings, lowering standards and student experience, and generally hollowing out the value of the Valparaiso name and degree. The university is circling round the toilet bowl, and I am leaving at the end of the year for a better job.

Although I am unhappy about the planned sale of the art, I agree with valpo22's characterization of the retention of this particular consultant as a much bigger deal. Anger and turmoil are the norm at West Virginia University, and what remains when the smoke clears will be a sharply diminished flagship university in a state that sorely needs to up its educational game. West Virginia is experiencing a brain drain of talented young people who seek brighter futures elsewhere, and stripping down WVU will only exacerbate that problem.

As applied to a private university like VU, the danger is that VU will follow advice that ultimately diminishes the qualitative value of a VU degree, robs the university of its unique qualities, and makes it a Plan C or D destination for talented new faculty (the bloodletting during the pandemic already made it a Plan B destination, I'm afraid).

I have long observed that if a university needs a big consulting firm to help it engage in big-picture assessments of its mission and future, then it really doesn't know what its mission is and thus has little sense of what its future should be. This is not a problem unique to VU. Rather, we're just the latest to spend gobs of money on what we should already know and understand on our own.

Even though we've had our disagreements on this board over what the University should be doing, collectively we have a much better sense of the school's strengths and weaknesses than a bunch of consultants coming in with their canned predispositions and templated views of higher education. Furthermore, while VU pleads poverty in terms of faculty salaries, pillages its own art museum of its most valuable and distinct works to build dorms, etc., be assured that these consultants will be paid s**tloads of money, the kind of cash that most faculty would drool to earn.

This decision does not reflect positively on VU's Central Administration and Board of Trustees.

[VU2022]

The discussion here about VU's morals, ethics, and situation has been a fascinating read. As a former graduate student at IU, I figured I would jump in with my admitted jaded opinion. Other than the enrollment problem, VU is hardly unique with regards to the other issues in higher education such as faculty treatment and pay, the gutting of programs, and the diminishing the value of a degree. Higher ed as a whole is rotting from the inside out for a variety of reasons. The things that I saw at IU are very similar to a lot of the issues people have discussed in this thread, so I've described my experience below to put some things in perspective about how this is not just a valpo problem but a higher ed problem at its core.

I got to IU after the graduate student strikes. The atmosphere was one of chaos due to the university scrambling to defeat a graduate student unionization effort and to cope with a graduate student shortage because of the strike and lack of domestic students attending graduate school. Unlike at valpo, graduate students do the majority of the teaching at big 10's like IU, so dealing with the grad student shortage and threat of strikes was quite a dire issue for the core function of the university. Instead of addressing the root causes of the problem (an overreliance on graduate students to teach undergraduates, awful treatment and pay), the university decided to recruit undergraduates to teach the other undergraduates in exchange for tuition remission! So now, students take out loans and pay ever increasing amounts of money to sit in 500 person lecture halls, and then be taught recitation and have their work graded by other people in the exact same boat. Speaking of the 500 person lecture hall classes, you would think that at least the lecture component would be taught by a professor, right? WRONG! These classes are taught in many cases by lecturers, since the university can pay them less and more easily replace them. There has been a concerted push to reduce the amount of professors and replace them with lecturers for the above reasons.

Okay, so if you are a student at one of these large institutions and get past the first two years of introductory classes with the lecturers and undergraduates/graduates teaching you, at least you will finally receive a great education from well renowned experts in your field of study, right? Maybe. Because universities like IU are R1 institutions, the faculty members are more focused on their research than they are on teaching students. Bad behavior among tenured faculty at these R1 schools goes completely unpunished. I had a professor in one of my graduate chemistry courses show up to teach class completely plastered, unable to speak coherently or stand up straight. He would also go missing for weeks at a time, and wouldn't show up to work at all. Other faculty members had to step up and teach both the graduate class I was in, and the class of undergraduates he was teaching. The students in his research lab were left without a mentor, and several of his students dropped out of grad school. Nothing was done about it, and when grad students complained about it, they were just told to deal with it. He is still a faculty member at IU. The combination of removing faculty for lecturers, continuing to retain bad faculty, undergraduates holding the office hours and recitation, and the overall attitude at the university mean that students are getting a worse education for the money they put forth. I left the Ph.D program at IU this May after one year, and it was one of the best decisions I have ever made in my life.

This same thing is happening at a lot of the schools across the country, and I think that Valpo has a problem with trying to emulate what these other schools are doing because they believe it will help them stay competitive in the tough higher ed market. The administration is in danger of losing sight about what makes valpo special: The small size, classes taught by professors who want to be there and want to teach, and the positive connection with faculty. While I am a Padilla fan and do think that some of the faculty complaints, especially about the art sale, are overblown, I think that the VU administration has adopted an arrogant and dismissive attitude toward the faculty that is uncalled for. Yes, a lot of other schools have that attitude, but it doesn't make it right and makes the existing problems so much worse. Its the same idea with the solutions the consultants have previously put forth and will likely give valpo. They will point to other schools that are doing "better" since they cut faculty pay, eliminated majors, increased their reliance on lecturers, increased teaching loads, and increased class sizes. But is the grass really greener at those schools, and is that what success should look like? I think not, and I think adapting all those measures, especially at a small school with enrollment problems like valpo, will do a lot of damage. The solution Valpo needs is quite obvious and simple: Heavily emphasize recruitment to get bodies in the seats. All of the less obvious and hard decisions such as eliminating some majors have already been done, so I really don't know why we are paying consultants when the only other answers they will give are awful for the reasons above. This post ended up a lot longer than I thought it would be, but I feel that it all needs to be said and I hope I didn't bore you all with a wall of text.
Valpo22, I wish you the best of luck at your new institution, and I hope wherever it is you are ending up at will respect you and treat you well.

[VULB#62]

My simplistic view: Generally, I characterize Valpo as a private, liberal arts with some additional schools of focus, 2,500-3,000 student institution that heavily attracts students from the central and upper midwest, but also, because of its religious association, also attracts students nationally as well as internationally.  It's endowment falls within the $200M-$400M window. Its sticker price is kinda on the high end for where it is located.  Is that fair?

At least according to postings on this board, Valpo is in trouble and is looking for a remedy. One strategy is hire a high-powered consultant that has dealt with large schools like WVU.  As David has mentioned, these guys come with templates and canned predispositions.

But there's gotta be institutions that parallel, within reason, the Valpo profile I characterized above and are kicking butt. Who are they? Why are they swimming successfully against the current? Can we pick their minds directly rather than through a consultant's filter? Is that something that can occur in higher education?

For smirks and giggles let's assume, say, Davidson is one of those excelling schools. Why not do formal visits to Davidson as well as BLANK and BLANK colleges and explore with them their strategies that have resulted in resilience in the face of current trends?  All institutions are at risk.   Cooperation benefits all  - the rising tide floats all boats idea.

My parallel rationale:  I coached HS football in another life (actually a few lives ago).  When I thought I needed to adopt a new offense or defense to better compete,  I researched college programs that were very successful under similar circumstances (e.g., smallest school in the league, lower talent level) at their level, and I visited with those programs in the spring in order to learn how they did it, and I learned a helluva lot in those visits and was able to make positive changes as a result.

IMO, no matter how much experience one has, there are people who have done it better. Those sources need to be sought out and tapped. Directly. Personally. Not blindly through a third party.

[usc4valpo]

In my39 years in industry, for the most part hiring a consultant is a lazy and ineffective way to solve problems, not to mention you tend to lose trust and lower morality of your employees. If Valpo has a competent board and a president, they can figure this out.

Regarding 22's comments and frustration, this certainly is happening beyond Valparaiso, as Drake faculty are taking pay cut and dealing with a lower enrollment.

This art sale needed to be solve to compete gang.

[valpo95]

It would be wise to dial back the outrage, and look at the facts as we know them.

1) We DO NOT know how much the consultants are getting paid, so it is wrong to speculate that they are unnecessarily costly. I'm sure they are expensive, yet VU is and has been in very difficult financial circumstances. VU has been operating under a structural deficit for many years. The Moody bond rating report says it in black and white.

2) The faculty and administration (whatever their expertise) has not yet been able to turn the corner on this. So, it seems reasonable to me to consult with experts who might be able to offer assistance.

3) West Virginia Univ. is a trainwreck for many reasons. I have a former student of mine who is a department chair there, and recently got some additional insight. There is a Wall Street Journal article from this summer that details some of their problems. Some interesting parallels: One of the big issues is their president (Gordon Gee) planned on big growth which did not occur. In 2014, Gee said their enrollment of full-time and part time students (which was 33,000) should grow to 40,000 and spent something like $800M on upgraded facilities between 2012 and 2018. As of the fall of 2022, they had 27,500 full-time and part-time students - basically WVU spent money it didn't have, and now the bill is due. This happened in West Virginia, a state where high school graduate numbers have been in a long-term decline. Mark Heckler could similarly forecast growth and spending at VU under similar circumstances, and the student numbers at VU have been in similar decline.

4) I have no personal experience with rpk Group. However, they have worked with Gallaudet, St. John's, St. Thomas, UVA, Kansas, St. Bonaventure, Missouri, Texas, George Washington and many others. Seems like they might have some insights worth hearing about. Naturally, it is up to the VU administration and board to decide what to do with those recommendations. 

[crusadermoe]

Okay I could not stay away until Christmas.  Davidson had a $700+ million endowment already several years ago.  That size is over twice ours.  And they have a very wealthy "old money" consistency of parents and alumni that has been solid for a long time.  Probably some tobacco money.

The much closer parallels to Valpo are Bradley, Drake and Evansville in terms of endowment, midwestern location, and risks of deep discounting of tuition. The structural problems at Bradley and Drake are very similar, especially at Bradley. I have posted Bradley budget links and you can google those two words easily.  The threats are high in our size category.

Like Bradley and Drake, Butler is an obvious comp in size and midwest location, but maybe the pharmacy school injects strong cash and maybe butler has a stronger parent/alumni base in terms of wealth. They are also in a dynamic growing city, located well for student life off campus.

[usc4valpo]

valpo22, I agree consulting groups to solve problems is usually unnecessary and a lazy solution, but your response regarding the education of the personnel of the consulting group was incredibly pompous. The attitude that someone with a doctorate is required to solve a university issues is crapola. I have worked with some Ph. D's who were effective in their work, and some that have no reason to be in the workforce. Several years ago I was training graduate students and a post doctorate engineering students at a university in the midwest, and I can why the post doc student is a post doc student - there is no way he could contribute or lead properly in industry.

Also, there are faculty at Valpo that will have more self-centered views beyond the overall good of the university. This has been addressed before on this board. So far, nothing has been fixed,  so unfortuately and likely with little success they have to take an alternative strategy and get outside help.

I will say  this - sometimes having someone external to the situation brings fresh ideas.

[VULB#62]

Okay I could not stay away until Christmas.  Davidson had a $700+ million endowment already several years ago.  That size is over twice ours.  And they have a very wealthy "old money" consistency of parents and alumni that has been solid for a long time.  Probably some tobacco money.

The much closer parallels to Valpo are Bradley, Drake and Evansville in terms of endowment, midwestern location, and risks of deep discounting of tuition. The structural problems at Bradley and Drake are very similar, especially at Bradley. I have posted Bradley budget links and you can google those two words easily.  The threats are high in our size category.

Like Bradley and Drake, Butler is an obvious comp in size and midwest location, but maybe the pharmacy school injects strong cash and maybe butler has a stronger parent/alumni base in terms of wealth. They are also in a dynamic growing city, located well for student life off campus.

Moe, I threw Davidson out there although I knew their endowment exceeded my general Valpo profile, but in all other respects it met, in my mind, the characteristics of a similar-sized, private school that is successfully "swimming against current."  I am not interested in schools that are, like Valpo, being pulled along by the current. From what I have been reading, Bradley, Drake and E'ville are in the same boat as Valpo — you don't learn how to reverse your course from schools who are struggling just as much as yours in the same direction. TBH, I don't know any other specific schools who are successfully swimming against the current, so I added BLANK and BLANK — that would be up to the Valpo administration to research and contact.

[crusadermoe]

Naturally RPK will be charged with financial recommendations and only secondarily at product nuances.  But to have any credibility, they certainly use some consultants whose careers were educators.

If you plan to stay in your historic mission of a residential bachelors degree that offers both arts and science emphases, you need to cut a major emphasis or add a LOT of revenue.  Hopefully one charge to RPK is to evaluate assets which could be sold and the recommend investments from new sustained revenue. You can't keep owning a lake house if you are underwater every year in your family budget. or maybe you can if your credit cards have high limits? 

How fast does it need to be sold?  They have to consolidate in terms of land. Could we convert the cavernous library or union into  high rent apartments and/or turn a large section of the huge campus into a retirement complex? That's where the growth is.

[KreitzerSTL]

I'm not saying that BAs in biology or MAs in marketing are bad or dumb people as suchy - but by definition you are choosing as your consultants people who do not know the processes of the very thing they have been hired to analyzing. It is like deciding to hire in 'consultants' to streamline a bakery's operations, but hiring a dentist whose only familiarity with it is having once eaten some of the type of the baked goods it produces.

I would have thought PhDs would be better with analogies. RPK seems to be more like someone who went to dental school but has been advising bakeries for many years.

https://rpkgroup.com/clients/

Not saying these are good consultants or bad consultants, but they were hired by the Gates Foundation. I don't think the Gates Foundation is hiring dental school dropouts.

[vu72]

I certainly don't have an opinion of the consultants chosen one way or another.  The proposed ideas, including talking to other similar institutions about how they have faced their challenges, assumes we have a President and Board who, as suggested by the analysis of the backgrounds of some of the consultant's principals, don't have any managerial experience, let alone in higher education.  Without digging too deep into the Board members experiences, let me just post part of President Padilla's bio:

President Padilla joined Valpo as the culmination of a long and successful career in higher education. He served as vice president, university counsel, and secretary of the University of Colorado System. Previously he served 15 years in senior leadership roles at DePaul University in Chicago, the most recent as vice president, general counsel, and secretary.


So a guy with this background wouldn't think to check around with the loads of people he knows and respects but rather, in some sort of panic mode, goes directly to a consulting firm who will rip Valpo off and provide cookie cutter answers?  I think not.