The Untold Story

Over the past several years, the Renew Rensselaer team has researched financial, academic, and student admissions data to understand why RPI’s financial condition and academic program rankings have weakened over time. As we investigated, we discovered additional problems. Since we were able to access data as far back as the late ’90s, we were provided with an opportunity to generate a “report card” on the Institute’s progress under The Rensselaer Plan (originally approved on May 12, 2000) and the updated version released in December 2012: The Rensselaer Plan 2024.

Presented belowand in the accompanying spreadsheets, files, and web linksare what we consider to be the most important data, facts, and findings, in three sections: Finance, Academics, and Governance. In our opinion, they reveal a history as well as present condition that is inconsistent with what has been communicated to alumni by the Institute.

Since uncovering this “Untold Story,” the Renew Rensselaer team has endeavored to engage the Board of Trustees in a serious dialogue to address our concerns, which arose from our findings. These topics included RPI’s deteriorating financial condition, underperformance in research, declining academic rankings and, just as important, lack of financial transparency, low morale among faculty and staff, divisive confrontations with students, and questionable governance practices.

We presented our findings, analysis, and recommendations for improvements to the Board via multiple written documents and two lengthy face-to-face meetings with the Chairman and other Board members. We offered our services as fundraising volunteers for the Capital Campaign provided the Board expressed willingness to reform several aspects of RPI’s governance practices; however, no support for our initiatives or recommendations was forthcoming.

Consequently, we have elected to reach out to RPI’s base of nearly 100,000 alumni and relate this untold story. We debated the decision to disclose our data, facts, and findings in a public manner. In the end, we determined that it was in the long-term best interests of the Institute to do so, outweighing any potential short-term effects. Hopefully, by doing so we will gain strong alumni support for our platform of recommended changes to Renew Rensselaer.

Our bottom line is this: it’s your decision how, when, and where you want your voice to be heard.

Finance

1. RESEARCH REVENUES; CARNEGIE CLASSIFICATION LOWERED FROM R1 TO R2

The primary strategy of both the original Rensselaer Plan and updated Rensselaer Plan 2024 is to grow research activity and, presuming success, this should lead to the Institute gaining greater prestige, drawing higher quality students, improving its rankings, and attracting greater financial resources. In dollar terms, the declared goal of The Rensselaer Plan was to increase research expenditures to $100 million within five years. The Rensselaer Plan 2024 targets annual research expenditures of $250 million.

After showing initial strong growth from $48.5 million in 2000, research revenue peaked at $98.5 million in 2013, before slowly declining to $74.7 million in 2017. Therefore, from fiscal year 2000 through fiscal year 2017, research revenue has grown at a compounded rate of only 2.6% (including inflation), from $48.5 million to $74.7 million. As a percentage of total revenue, research revenue in 2017 was lower than it was in 2000 (18.0% vs. 18.4%). The following chart displays research as a percentage of total revenue from fiscal year 1998 to 2017 (for data used in this section, see Historical Revenue, Balance Sheet, and Selected Data):

During 2016, RPI’s Carnegie Classificationa 3-tier category metric for research universitieswas lowered from the highest level of R1 to the mid-level of R2, whereas nine other schools in New York remained at R1: Columbia, Cornell, CUNY Graduate Center, NYU, Stony Brook, SUNY Albany, Syracuse, SUNY Buffalo, and Rochester.

The most revealing data are RPI’s annual research revenues, annual research expenditures, and the difference between them (see charts below). Federal funding for scientific research began to decline sharply during the 2012-2014 time period, in large part because of the expiration of The American Recovery and Reinvestment Act of 2009 “stimulus plan” (ARRA) and the “Sequester Agreement” for limiting overall Federal spending (passed after the 2010 Congressional elections). Accordingly, these shifts in spending negatively impacted the dollar amount of new Federal research grants and contracts being awarded. In 2014, RPI’s research revenues began to decline. However, RPI’s research expenditures did not contract proportionately with revenues, leading to large funding gaps over the past four years (2014-2017). It appears RPI has bridged these gaps from internal sources of funds. Furthermore, the outlook for Federal funding of STEM research, which is the source of roughly 80% of RPI’s research funding, continues to be weak (for more perspective on the ARRA, the Sequester, and the outlook for Federal funding of research, see the Boston University research article entitled “Who Picks up the Tab for Science?”).

2. LONG-TERM DEBT RATINGS DOWNGRADED MULTIPLE TIMES BY BOTH MOODY’S AND STANDARD & POOR’S

At the beginning of fiscal year 2000, Moody’s rated RPI’s long-term debt at A1; Standard & Poor’s (S&P) rated it A+. Since then, Moody’s has lowered the rating twice (from A1 to A2, and then from A2 to A3) and S&P has downgraded the rating three times (from A+ to A, followed by A to A-, and most recently, from A- to BBB+ in January 2017).

Below is a table comparing RPI’s long-term credit ratings to those of some of its peers:

UniversityStandard & Poor'sMoody's
RPIBBB+A3
Carnegie MellonAA
Case WesternAA-A1
LehighAA-Aa2
MITAAAAaa
RITA1
WPIAA1

3. HIGH DEBT LOAD, HEAVY INTEREST BURDEN, AND WEAK LIQUIDITY

In S&P’s press release announcing the downgrading of RPI’s rating to BBB+, it cited RPI’s high debt burden and low financial resources as the primary reasons. Following are some historical comparisons and related financial data:

  • Total liabilities have risen from $203.7 million in 2000 to $1.02 billion in 2017, a 400% increase. In that span, total assets have only risen from $1.15 billion to $1.47 billion, an increase of about 28%.
  • Total liabilities, as a percent of total assets, have increased from 18% in 2000 to 69% in 2017.
  • Total debt (for borrowed money) has risen from $115.5 million in 2000 to $757.6 million in 2017 (this includes bonds, bank borrowings, notes payable, and money owed under capital leases, but excludes borrowings under Federal student loan programs which are offset by student obligations).
  • Interest expense has increased from $7 million to $38 million over the same time period.
  • With operating lease payments added to interest, total debt service expense for 2017 was $45 million.
  • The Institute’s annual endowment draw (typically 5% of assets) has not covered the annual debt service expense in any of the past five years (2013-2017).
  • In recent years, RPI’s high debt service, declining research revenues, and growing pension liabilities have depleted its cash levels and available financial resources.
  • In response, RPI has reduced capital spending to levels far below the depreciation of its facilities. Over the past six years, the cumulative depreciation has exceeded capital spending by a factor of 1.8 times (see Historical Revenue, Balance Sheet, and Selected Data).

The following chart displays the Institute’s total assets and total liabilities from 2000 to 2017:

4. LEGACY DEFINED BENEFIT PENSION PLAN’S GROWTH IN LIABILITIES

RPI maintains a legacy defined benefit pension plan that covers faculty and staff, which was closed to new participants in 1993. At the end of fiscal year 1999, the plan was 97% funded. By the end of fiscal year 2001, the plan’s funding ratio was 82%, having been impacted by the large stock market declines of that year. It is important to note that a funding ratio of 80% is generally thought to be the minimum level for a plan to be considered adequately funded.

At the end of fiscal year 2008, after several years of strong market returns and just months prior to the 2008 financial crisis, the funding ratio was still only at 83%. By the end of fiscal year 2009, just after the start of the Great Recession and associated market bottom, the funding ratio stood at a mere 67%.

Since 2009, the actuarially-computed obligations of the plan have grown significantly. The calculations have been negatively impacted by both persistent low bond yieldsused as the discount rate for valuing the obligationsand updated actuarial tables reflecting increased life expectancies.

To partially offset these growing obligations, RPI contributed $125.6 million in cash to the plan over the last eight years (2010-2017). Approximately $77 million of the contributions were funded through the issuance of private long-term notes, with the balance effectively sourced from the endowment. At the end of fiscal year 2017, the plan’s funding ratio stood at 68%, and RPI had a long-term unfunded pension liability of $125 million on its balance sheet (see Defined Benefit Pension Plan Data).

5. SIGNIFICANT COST OVERRUNS FOR THE CONSTRUCTION OF EMPAC

The Curtis R. Priem Experimental Media and Performing Arts Center (EMPAC) opened on October 3, 2008 (first half of fiscal year 2009). The building was originally expected to be a $50 million project. Figures published by RPI indicate the final cost, including equipment, to be over $221 million. The primary reason for the cost overruns was the selection of the building site (a steep clay slope), coupled with an inadequately-planned foundation, one that was not suited for the soil conditions and slope. When the initial concrete foundation was fully poured, it began to slide down the steep hillside.

Construction was halted and holes were drilled in the up-slope wall of the foundation to allow for tunneling to bedrock, in which anchors were sunk to tether the foundation with steel cables. This was costly work for redesign and construction. But the largest costs were likely incurred due to the resulting delays with the remainder of the building’s construction. While it was not possible for us to determine with complete certainty, it is most likely true that the cost overruns were funded through a combination of a special donor gift, additional bond proceeds and draws from the endowment, diverting precious capital away from other uses.

6. PARTICIPATION RATE OF ALUMNI DONORS HAS DECLINED SINCE 2000

According to Council for Aid to Education (CAE) Voluntary Support of Education (VSE) data, the RPI alumni donor participation rate fell from 16.6% in 2001 to 8.6% in 2012, a 48.6% decline. An average for five comparable schools showed a decline of 31.4%. The 8.6% rate for 2012 was 41% below those same comparable schools’ average of 14.5%.

Current data shows RPI’s alumni participation rate declined from 17.0% in 2000 to 7.4% in 2017. The following chart displays the CAE data for RPI’s alumni participation rate:

7. RISE AND FALL OF GIFTS

Despite the downward trend in the alumni donor participation rate displayed above, Gifts and Bequests in dollar terms rose from 2000 to 2006. After 2006, they flattened out before sharply declining through the Great Recession. Since 2013, there has been a modest recovery.

Below is a chart of annual Gifts and Bequests, adjusted to 2017 constant-dollar values. Due to the normal fluctuation in gift-giving year-over-year, we have also presented a three-year trailing average. While it is impossible to precisely associate cause and effect, it would appear The Rensselaer Plan was supported by alumni through donations during its early years. We attribute some portion of the decline in gifts from 2006 to 2012 to the economic impacts of the Great Recession. Overall, we sense that the decline that began in 2006, coupled with the weak recovery from 2013 to 2017, reflects a mix of factors besides the recession which include, but are not limited to: high turnover of staff and leadership within the Office of Institute Advancement, the cost of EMPAC, the 2006 no confidence vote taken by the faculty, the diminishment of shared governance practices on campus, and the controversy surrounding administrative control of the Student Union.

RPI’s total of Gifts and Bequests for 2017 was $40.5 million. As a quick comparison, Union College, a much smaller school with roughly 2,200 undergraduates, raised $43.0 million. Of greater concern is the downward trend in the portion of Gifts and Bequests classified as “unrestricted,” particularly since 2015. The absence of a restriction on a gift or bequest is highly desired because it affords the Board of Trustees maximum flexibility with respect to spending decisions, thus adding to readily available financial resources. A long-term declining trend in the amount of unrestricted gifts reduces liquidity and is a negative indicator for credit ratings.

8. ENDOWMENT VALUE AND GROWTH IS SUBSTANTIALLY EXCEEDED BY COMPARABLE SCHOOLS

During the 10-year period ending in 2015, the value of RPI’s endowment grew by only 8.5%, to $677 million. According to National Association of College and University Business Officers (NACUBO) data, over that same time period, the increase for 89 colleges with endowments over $1 billion was 80% (from $219 billion to $395 billion).

The following table shows endowment gains by comparable STEM schools over the same 10-year period:

UniversityEndowment ($ millions)Growth (2005-2015)
RPI667+8.5%
MIT13,475+107%
CalTech2,199+55%
Georgia Tech1,859+98%
Case Western1,766+17%
Carnegie Mellon1,739+108%
Lehigh1,213+43%

When viewed on an endowment-per-student basis, RPI’s endowment size is low. With recent increases in undergraduate enrollment, its 2017 endowment-per-student is $85,000 (based on total enrollment) and $107,000 (based on undergraduate enrollment). By comparison, Union College has a 2017 endowment of $198,000 per undergraduate student. MIT, at the very high end, has a 2017 endowment-per-student in excess of $1.1 million (based on total enrollment) and $3 million (based on undergraduate enrollment).

There are three annual flows for an endowment: investment returns, draws for spending, and new gifts/bequests. Without more detailed information, it is impossible to discern the extent to which weakness in each of these flows is responsible for RPI’s poor relative endowment growth. What is known is that no progress has been made in achieving the goal, as stated in The Rensselaer Plan, to grow the share of the annual operating budget provided by the endowment from 10% to 20%.

As previously mentioned, the most concerning trend has been the steady decline of the amount of “unrestricted” endowment assets, from $485 million in 2008 to $164 million in 2017. This further reflects the extent to which RPI’s liquid financial resources have been diminished (see Unrestricted Endowment Assets).

9. U.S. DEPARTMENT OF EDUCATION REQUIRES BANK LETTER OF CREDIT

In March 2016, the U.S. Department of Education required RPI to post a $4 million letter of credit after failing the Department’s financial responsibility test.

As of the end of fiscal year 2017, Bank of America was continuing to provide a $20.3 million letter of credit for the benefit of the Department of Education, backstopping RPI’s obligations.

10. BOND MATURITY AND GROWTH IN UNDERGRADUATE ENROLLMENT

Another concern, stemming from our financial analysis, is the need for RPI to refinance $205 million of bonds coming due in 2020, and to do so at a reasonable interest rate. We see no viable path for RPI to repay that amount from internal cash flows, given recent operating results and the weak outlook for revenue growth from research. Success with achieving the goals of the recently launched capital campaign would bolster RPI’s financial condition and credit ratings, greatly facilitating a bond refinancing. However, this will take time and remains uncertain.

We do see positive revenue growth coming from RPI’s significant expansion of undergraduate enrollment, though it is noteworthy that both The Rensselaer Plan and The Rensselaer Plan 2024 originally targeted an undergraduate enrollment of about 5,000 students. Since 2013, undergraduate enrollment has grown by nearly 1,000 students, reaching 6,314 during fiscal year 2017 (see Student Enrollment Components), with another large class of freshmen (1,663 students) having enrolled in Fall 2017. Since 2013, growth in tuition revenue from undergraduate enrollment has helped to offset the decline in research revenues. Related to growth in undergraduate enrollment is The Arch, which we discuss in a section under Academics.

11. RPI RECEIVES FINANCIAL GRADE OF C FROM FORBES

When RPI’s financials are directly compared to the 25 most similarly sized schools ranked between 11 and 100 by US News & World Report over a five year period (FY2011-16), it becomes evident that RPI is last in every category, and is the only school with:
 
  • an overall C grade from Forbes
  • a negative average net income
  • a negative endowment change
  • an asset/liability ratio below 2x
  • an endowment/liability ratio below 1x

In the asset/liability category, 23 of the 26 schools are at 2.5x or better. Only Johns Hopkins and Georgetown come in at around 2.0x, and RPI is below 1.5x. Similarly, in the endowment/liability ratio category, RPI’s ratio is a full third below that of every other similar school (see Financial Comparison of Selected Colleges).

Academics

1. ADMISSIONS DATA (2001-2016) IN LINE WITH PEER AVERAGES

The administration and Board of Trustees often tout RPI’s significant increases in application volume and average combined SAT scores, since 2001, as evidence The Rensselaer Plan has been highly effective. We performed an analysis of the 15-year changefrom 2001 to 2016in admissions data for RPI and a peer group of 15 STEM universities (see Admissions Data). We found that the changes in RPI’s data were roughly in line with its peer group averages for changes in application volume, acceptance rate, “yield” from accepted students, and combined SAT scores for entering freshman.

Over the 15-year period, RPI’s application count grew by a factor of 3.34x, as compared to the peer average of 2.85x. Its selectivity improved (i.e. lower acceptance rate) by 23 percentage points, versus the peer average of 19 points, while its yield fell by 9 percentage points, as compared to a decline of 2 points for the peer average. For combined SAT scores, RPI’s average rose by 65 points, as compared to the rise in the peer average of 53 points.

In addition, we found research studies which indicated that most of RPI’s and the peer group’s growth in application volume from 2001 to 2016 was likely due to exogenous factors. More specifically, the demographic bulge of the millennial generation reaching college age from 1999 through 2010, the heightened competitiveness and application frenzy that ensued from it, plus the post-2008 “boom” in demand for undergraduate STEM degrees (especially for engineering, showing a 57% increase), were the driving factors for growth in applications (see the College Board Research Brief entitled “Supply and Demand in the Higher Education Market: College Admission and College Choice” and Inside Higher Ed article entitled “The STEM Enrollment Boom“).

While the preceding data indicates RPI has successfully maintained its peer position, we did not find any evidence that it has outperformed its peer group, nor become a top-choice destination for a greater share of high school seniors, as was the hope when The Rensselaer Plan was launched.

2. DECLINE IN “YIELD” FROM ACCEPTED STUDENTS

In 2001, approximately 30% of the students accepted by RPI decided to enroll. By 2016, and again in 2017, that percentagebetter known as enrollment yieldhad fallen to 20%. In contrast, top aspirant peer schools for RPI, which include MIT, CalTech, Carnegie Mellon, Cornell, Lehigh, and Johns Hopkins, have all experienced increases in their yields (see Admissions Data).

Yield is the single best indicator of the extent to which a college or university is a first choice school for students within the applicant pool. Having a yield of 20% raises the question of whether RPI is now perceived as a second or third choice school by a significant portion of its applicantsnot a first choice as The Rensselaer Plan strategy envisioned.

3. STABLE TO DECLINING STUDENT-TO-FACULTY RATIO

The Rensselaer Plan aims to increase the number of faculty members, and publications from RPI indicate that the Institute is well on its way to achieving that goal, advertising the hiring of more than 360 tenured and tenure-track faculty members since Fall 1999. However, based on the data RPI reports to the U.S. Department of Education, the number of tenured and tenure-track faculty has only increased by one faculty member between Fall 1999 and 2016, leading us to believe the cited figure of new hires represents new faculty hired to fill vacant positions rather than the creation of new positions as The Rensselaer Plan envisions. Additionally, a recent magazine article in the MIT Technology Review that was distributed by RPI staff to alumni, cites an improvement in student-to-faculty ratio from 18:1 to 13:1. This is misleading, as RPI changed the way it reports its student-to-faculty ratio in Fall 2016, shifting from its traditional method of using the equivalent total number of full-time students (undergraduate and graduate) to a new method, similar to what has recently been employed by several peer institutes, in which only full-time degree-seeking undergraduate students are included. Using the traditional method, the Fall 2016 student-to-faculty ratio should be advertised as 16:1. Calculating the Fall 2016 ratio using all full-time undergraduate students, it should be reported as 14:1. When the method of calculation is applied consistently, the implementation of The Rensselaer Plan has effected little to no improvement in the student-to-faculty ratio between Fall 1998 and Fall 2016.

In addition, based on the student and faculty populations reported in the Common Data Sets of peer institutions, we found RPI’s student-to-faculty ratio is significantly higher. The student-to-faculty ratios, computed using all students and only undergraduates, for RPI and several peer institutions are shown below:

It should be noted that while we were unable to acquire the necessary data for the period Fall 1999 to Fall 2002, we did find a bond offering statement which indicated the undergraduate ratio, in the year prior to the Rensselaer Plan’s implementation (Fall 1998), was 14:1. While there was initial improvement shown in this ratio over the next several years, reaching a low of 11:1 in 2004,  since then it has gradually returned to the current 14:1 (see Student-to-Faculty Ratio).

4. STABLE TO DECLINING OVERALL RANKINGS

RPI’s overall ranking among national universities by US News and World Report initially climbed from 49th in 2001, to 42nd in 2007. Since then, it has fluctuated in a range, hitting a low of 50th in 2012 and a high of 39th in 2017. RPI’s current ranking (2019) is 49th. The following chart shows RPI’s US News & World Report rankings from 2001:

In the 2019 Wall Street Journal rankings, RPI tied for 83rd place (up slightly from 87th in 2018 and 85th in 2017, but still down from 77th place in 2016). Comparable schools ranking higher than RPI in 2019 are MIT (2nd), CalTech (5th), Carnegie Mellon (16th), Lehigh (48th), and Georgia Tech (60th).

5. FALL IN RANKING OF GRADUATE ENGINEERING PROGRAM

The Rensselaer Plan cited RPI’s strong graduate engineering program, with a national ranking of 19th, and further stated that RPI would maintain its position of leadership in areas of traditional strength. For 2018, RPI’s graduate engineering program has fallen in its US News & World Report ranking to 41st.

6. GRADUATE SCHOOL ENROLLMENTS FALL SHORT OF GOALS

The Rensselaer Plan states: “Rensselaer will grow its research enterprise dramatically…and greatly expand doctoral programs.” In 2000, PhD enrollment was 805 students and by 2015 it had reached 831, a gain of only 26 PhD students over 15 years. The Rensselaer Plan 2024 has a targeted PhD enrollment of 1,600.

Students pursuing a Masters degree totaled 1,073 in the year 2000, and by 2015 had fallen to 278. Much of this dramatic decline is attributable to a general reduction in emphasis on the Hartford programs and the termination of the Distance Learning Program, both of which are (were) part-time programs. Yet the data for full-time students in RPI graduate programsboth PhD and Mastershas also shown a sharp decline. In 2017, full-time graduate enrollment was 1,123 students, down from 1,500 students in fiscal year 2000. The Rensselaer Plan 2024 indicates a target resident graduate population of 2,500 students.

7. DROP IN RANKING FOR RPI’S UNDERGRADUATE ENGINEERING PROGRAM

Just prior to the start of The Rensselaer Plan, RPI’s undergraduate engineering program ranked in the top 25 nationally, as stated in a bond offering document. We found an article from Vice News referencing a program rank of 14th in the year 2000. The undergraduate engineering program is currently ranked 30th by US News and World Report.

8. THE ARCH

In September 2015, the administration announced a plan for restructuring the academic calendar, requiring the rising junior class to complete an academic semester during the summer, immediately following their sophomore year. The program commenced in summer 2017, on a volunteer basis, with further ramping up scheduled for 2018 and the full requirement for 2019. Following their summer term, the juniors would then spend a semester away, either in the following fall or spring term, on a co-op assignment or engaged in other enrichment activities.

The Arch program is expected to have far-reaching implications for student life at RPI while providing a potential boost to RPI’s financial operations, since it will allow for an increase in undergraduate enrollment of roughly 800 students (equating to roughly 200 students per class year). The administration has made on-campus dormitory residency a requirement during the Arch summer semester, claiming the program is aimed at building affinity among students, their peers, and the Institute.

There have been several criticisms of the program from the RPI community, as follows:

  • Its conception was primarily financially motivated;
  • Summer semesters are too short for a full course load (six or 12 weeks vs. normal 14 weeks), creating high stress for students and faculty;
  • It may create student scheduling problems for core course requirements;
  • Too many students will require exemptions from the program, especially athletes;
  • The absence of half the junior class during the fall and spring terms will create issues for student clubs and organizations, such as a leadership vacuum for said clubs and organizations;
  • It creates housing problems for off-campus leasing of apartments and for Greek houses;
  • Half of the junior class will be required to endure four consecutive academic terms;
  • Mandatory participation may be a deterrent in application and enrollment decisions.

Governance

1. ADMINISTRATION’S RESTRUCTURING OF THE STUDENT UNION

RPI students have run and managed the Student Union for over 127 years; it is one of the few private universities in the country for which students had such responsibility and for such an extended period of time. In recent years, the administration has made several unilateral changes, reducing the scope of activities managed by the Union and shifting the reporting line and job description for the Director of the Union, a position which has traditionally reported to a board of student representatives.

Students pay an activity fee that carries with it Union membership privileges. The activity fee originated in 1912 as a self-imposed tax by students to support student organizations, activities, events, and athletics. A 36% portion of the Union’s overall annual budget funds intercollegiate athletics; however, within the last two years, the RPI administration removed the athletics budget from Union control.

In March 2016 over 1,000 students, faculty, and alumni protested after students discovered the administration had added a new administrative position with broad oversight of the Union. The Institute responded by abandoning plans for the new position, but ultimately shifted the controversial responsibilities and oversight of the Union to the Dean of Students.

This past September, the Chairman of RPI’s Board of Trustees issued a memorandum stating that the powers of the president superseded the Union Constitution; the document which has governed the Union since it was adopted by the Board in 1970. The opposition to these changes within the student body has been strong, resulting in another campus demonstration in October 2017 during Reunion & Homecoming Weekend.

Beginning in spring 2016, and most recently revived in fall 2017, over 5,500 alumni and student supporters have signed a petition addressed to the Board of Trustees, opposing these changes.

For details and numerous newspaper articles related to this issue, see the student movement’s website, savetheunion.xyz. Save the Union has also made available a full timeline of the history of the Student Union events.

2. FACULTY AND STAFF MORALE IMPACTED BY INSTITUTE LEADERSHIP

Since 2000, there has been a shift at RPI toward a top-down corporate governance model, and away from a typical university shared governance model. In 2006, the Faculty Senate held a “No Confidence” vote on the president, which nearly passed. Within a week of the vote, a stern letter was issued to the RPI Community by the Board Chairman effectively telling faculty to support the president and her plans, or make alternate career plans.

Shortly thereafter, the Faculty Senate was dissolved by the administration, ostensibly over the issue of eliminating participation by non-tenure track faculty. The Faculty Senate was not reconstituted until nearly half a decade later, and with revisions to its constitution which excluded non-tenure track faculty from membership (see The Chronicle of Higher Education’s 2014 article entitled “Behind RPI’s Highly Paid Chief, Tales of an Imperial Air and Cowed Staff“).

3. CAMPUS CLIMATE AND CULTURE OF FEAR

Many students and alumni have lamented to us the existence of a “culture of fear” on RPI’s campus stemming from the words and actions of the current administration. Student leaders have recounted incidences of being threatened and intimidated by multiple administrators simply for doing their job and acting as the voice of the students. Students (and even some alumni) have expressed concern over being cyberstalked by RPI administrators and staff on social media accounts, some of which are professional in nature. Posters critical of the administration and/or in support of a student-run Rensselaer Union have repeatedly been targeted by the administration and selectively-removed from campus, especially when prospective students and alumni are visiting, despite full adherence with the Sign Policy. Additionally, students distributing informational flyers in support of a student-run and student-managed Union faced disciplinary action when they were charged with operating a business on campus. When submitting applications to peacefully protest, students have been routinely denied. Furthermore, certain students who then engaged in a peaceful protest, were confronted with requests for interviews and/or judicial action. Organizations which routinely defend civil liberties, including the Foundation for Individual Rights in Education (FIRE) and the New York Chapter of the American Civil Liberties Union (NYCLU), have criticized RPI’s administration for its treatment of students, specifically with regards to infringing on students’ rights to free speech.

4. LOW FINANCIAL TRANSPARENCY AND MINIMAL ACCOUNTABILITY

RPI makes it difficult for alumni donors to access its “public” Annual Reports and Consolidated Financial Statements. Many major universities make their financial statements and annual reports available on their websites. RPI does not make these reports easily accessible, nor will it even provide them to alumni upon request.

While it should be noted that RPI does comply with both SEC and IRS rules for filing its reports, their limited accessibility diminishes transparency. In the Association of Fundraising Professionals’ “Donor Bill of Rights,” it states that donors have a right to an organization’s most recent financial statements.

5. LEADERSHIP ISSUES WITHIN OFFICE OF INSTITUTE ADVANCEMENT

In August 2017, The Chronicle of Higher Education published an article about the shift in the management focus and sales culture of RPI’s Office of Institute Advancement, as well as the overall leadership style of RPI’s president. According to the article, which cited 15 former employees of the advancement Office as anonymous sources, the president’s “toxic” leadership style and direction have shifted the focus away from one of building long-term financial relationships with alumni, toward a transactional sales approach emphasizing raising money “right now.” The article also noted there have been four different vice presidents heading the Advancement Office over the last decade. It cites an employee turnover rate of over 50% in the past three years.

6. EFFECTS ON STUDENTS

Students have been well aware of the deterioration in RPI’s financial condition, as well as the uncomfortable campus climate and poor communications with the administration for some time. In 2011, the Student Senate published its report on the “State of the Institute” and passed a “vote of no confidence” recommending significant changes to the governance structure of the Institute to the Board of Trustees. The Grand Marshal also published a “Letter of Student Concerns.” Then in March 2015, the editorial board of The Polytechnic spoke out about how debt levels had tripled and unrestricted net assets have decreased (see The Polytechnic’s article entitled “Uncovering Rensselaer’s Finances”). In January 2017 the Student Senate published a report on the controversy surrounding the Rensselaer Union, and recommended three areas for improvement: an active voice in the Board of Trustees, improved communication from the administration, and a student-driven hiring process for Director of the Union.

7. PERPETUAL SUCCESSION METHOD FOR SELECTION OF TRUSTEES

In accordance with its Act of Incorporation, RPI’s Trustees are selected through a process of perpetual succession. It is a method commonly used by non-profit corporations. Under this method, individual sitting Trustees screen, recruit, and invite candidates to join the Board, with a majority vote of the Board required to approve them. Typically, in order to be considered as a Trustee, a candidate is expected first to have made significant donations, or irrevocable financial pledges to the organization.

Over time, there is a risk that boards selected in this manner may become isolated, insular, and like-minded, as trustees with minority opinions become ostracized, frustrated, disinterested, and eventually, resign. We have spoken with several former RPI Trustees who resigned from RPI’s Board and who explained their resignations in these exact terms. Additionally, we spoke with the Association of Governing Boards of Universities and Colleges (AGB) and learned that over 40% of private colleges and universities that use the perpetual succession method also employ mechanisms by which one or more Trustees are directly elected by the alumni. The best example of this is Dartmouth, for which alumni elect one-third of its Trustees. Dartmouth also has an alumni donor participation rate of well over 40%.

During RPI’s long history, there has been little or no voice on the Board for the vast majority of alumni in the small- and mid-sized donor classes, which in aggregate contribute millions of dollars each year. Nor do the many dedicated fundraising volunteers and officers of the Rensselaer Alumni Association (RAA) have any input into the nomination or selection of Trustees of the Institute.